How Lockheed Martin's Grand Plan for the F-35 Fell Apart

[unhappycamper]

http://www.fool.com/investing/general/2016/03/18/how-lockheed-martins-grand-plan-for-the-f-35-fell.aspx



The Pentagon's next-generation fighter jet might not be "common" at all.

How Lockheed Martin's Grand Plan for the F-35 Fell Apart
Rich Smith
Mar 18, 2016 at 10:13AM

Once upon a time, there was an F-22 Raptor. It was a good plane -- some even called it "the most capable air superiority combat jet in the world" -- but it cost a lot.

At a sticker price of $412 million per plane , the U.S. Air Force couldn't afford to buy a lot of F-22s. So, to ensure it had a good quantity of fighter jets, as well as a few of good quality, the Air Force proposed a "high-low" solution. On the high end, it would buy a handful of ultra-expensive F-22s to ensure air dominance. On the low end, to boost its numbers and ensure its ability to carry a lot of bombs into combat, it would buy a whole mess of F-35 Lightning II fighter jets -- projected to cost just $35 million each. (Lockheed Martin (NYSE:LMT), which builds both planes, was happy to oblige on both ends).

That was the plan. Instead, the F-35 fighter jet is turning out to be the most expensive fighter jet ever built, and is expected to ultimately cost taxpayers as much as $1.5 trillion.

How did we get it so wrong?
The story of Air Force's monumental miscalculation of the F-35's true cost is one that will go down in the history books -- and indeed, is already considered an historical fact. But the thing is, it was a miscalculation, and not an intentional misdirection.

[exboyfil]

1. Eisenhower quote

"Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some 50 miles of concrete highway. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This, I repeat, is the best way of life to be found on the road. the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron."


Note he says 500,000 bushels of wheat per fighter. The F-35 is 32 million bushels of wheat per fighter (wheat at $5/bushel)