The F-35 program has hit another snag, this time not an expensive production mishap or overrun, but the strength of the dollar itself.
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The F-35 program has a new, unexpected enemy — the strong dollar
"We've had some of our customers come up and raise the concern that this may potentially hurt their buys," said Babione.
An F-35A Lightning II team parks the aircraft for the first time at Mountain Home Air Force Base, Idaho, Feb. 8, 2016.
At Lockheed Martin's 2017 Media Day, Jeff Babione, general manager of the F-35 program, laid out the "blueprint for affordability," or the defense giant's plan to bring down the cost of the Joint Strike Fighter to below $85 million in the coming batches.
But therein lies a problem.
With about half of the F-35s Lockheed Martin intends to build in the next five years heading out to foreign countries, even in house belt-tightening and big initial investments to help ramp up to economies of scale can't offset the strong dollar.
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Asked by a Wall Street Journal reporter if the dollar's high exchange rate with foreign currencies is a problem for the most expensive weapons system in the history of the world, Babione said, "I think it is."
"We've had some of our customers come up and raise the concern that this may potentially hurt their buys," said Babione, who noted that some elements of production cannot move outside of the country to help mitigate costs for foreign buyers.
"We have some 1,700 suppliers in seven countries around the world. Many of the countries that are buying the F-35 produce parts for the F-35," said Babione. But still, Babione concluded that currency exchange rates not withstanding, the best tactic is just to get the F-35's price down, period.
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