Lockheed Martin has reached a preliminary agreement with the U.S. Department of Defense to produce and support at least 850 F-35 Lightning II fighter jets over the next 10 years, they said on October 22. UNN reports this, citing Reuters.
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The Pentagon said the defense contractor would independently finance at least $7 billion in initiatives supporting the F-35 program.
The F-35, built using stealth technology that allows it to avoid detection by the enemy, is considered the most advanced fighter jet in the world and is the backbone of Lockheed’s aeronautics division, which accounts for about 40% of its quarterly revenue.
Under the agreement with the Pentagon, Lockheed aims to maintain annual production at 156 aircraft.
The agreement is not an order but is considered a preliminarily agreed long-term contract.
"If multiyear authorization is provided in the coming months, the F-35 Joint Program Office and Lockheed Martin will work toward finalizing the contract terms, pricing, and schedule through the formal award of a contract," the company said.
The agreement also covers international orders for the F-35, as well as initial spare parts and modification kits, according to a statement from Lockheed, based in Arlington, U.S.
"We have fundamentally changed our approach to stabilizing the American defense industrial base to ensure rapid and large-scale production," said U.S. Deputy Secretary of Defense Michael Duffy.
"This agreement with Lockheed Martin proves it. By aligning financial incentives with actual performance, we ensure that our military is equipped with the lethal capabilities necessary to fight and win," he said.
Lockheed and its colleagues across the United States have benefited from increased global defense spending amid ongoing geopolitical conflicts, the publication notes.
According to Lockheed’s estimates, the agreement will support 317,000 jobs in the United States and generate nearly $79 billion in annual economic activity over the next decade. It also expects the arrangement to reduce production costs and ease supply-chain constraints, from raw materials to finished parts.