Pentagon Deputy Leader Backs Air Force Criticism of Lockheed

Deputy Defense Secretary Ashton Carter said he agreed with recent Air Force criticism of Lockheed Martin Corp. (LMT) for its management of the F-35 Joint Strike Fighter.

“I’m with him 100 percent,” Carter said today of Air Force Major General Christopher Bogdan, the deputy head of the F-35 program office, who this week called its relationship with Lockheed “the worst I’ve ever seen.”

While supporting the F-35 as “the centerpiece of tactical air modernization,” Carter, the Defense Department’s second- ranking official, said, “We have to control costs there.”

“To do that, we need a government-industry team that can work together,” Carter said in a speech to the Air Force Association meeting near Washington. ‘

Carter’s comments add Defense Department backing to the Air Force assessment that Bethesda, Maryland-based Lockheed Martin has been a poor partner in managing the costs of the F-35, the Pentagon’s most expensive weapons system.

General Mark Welsh, the new Air Force chief of staff, said yesterday that “there’s some repair work that needs to be done” in mending the Lockheed partnership.

“We tell it straight,” Carter added today.

Lockheed spokesman Michael Rein issued a statement Sept. 17 saying the company will “remain committed to continuing our work to solve program challenges and build on the momentum and success we’ve achieved during the past couple of years.”

The first four F-35 contracts, for 63 planes, exceeded their combined target cost by $1 billion, according to congressional auditors. Negotiations on a fifth contract have been stalled for months.

Lockheed, the world’s biggest defense contractor, fell 11 cents to $91.67 at 11:24 a.m. in New York trading after rising 13 percent this year.

To contact the reporter on this story: David Lerman in Washington at dlerman1@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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