Renzi’s Party Says Cut to Italy F-35 Order Should Be Significant

Italian Prime Minister Matteo Renzi’s political party said cuts to the government’s order of Lockheed Martin Corp. (LMT) F-35 fighter jets need to be significant to ensure more defense spending stays with domestic contractors.

An analysis of the costs and risks “argues for a significant reduction in the outline of the deal with Lockheed Martin for the F-35 program,” lawmaker Gian Piero Scanu said on behalf of Renzi’s Democratic Party in written recommendations for parliament’s Defense Commission. Scanu cited a public backlash against the F-35, reports of technical problems and concerns the order won’t create enough employment in Italy.

The report adds to calls for what would be the second adjustment to the program after a cut in 2012 reduced Italy’s order to 90 jets from 131. Defense Minister Roberta Pinotti is reviewing the broader military budget in a bid to find 3 billion euros ($4 billion) of savings over three years. Earlier this week, Renzi said cuts would be made, without giving details.

“We will continue our international programs,” Renzi said in a March 16 interview televised on TG5, referring to the F-35. “We will continue to be strong in aerospace. But that program will be revised.”

The Lockheed program is the U.S. military’s costliest weapons system and is being realized in partnership with nations including Italy, the U.K. and Australia. Subcontractors on the F-35 include Northrop Grumman Corp., BAE Systems Plc and United Technologies Corp.’s Pratt & Whitney military engine unit. Finmeccanica SpA, Italy’s top military contractor, is supplying parts.

In the report, Scanu said the program fails to guarantee concessions for small- and medium-sized Italian businesses and can’t be counted on to create enough permanent jobs. The lawmaker suggested strengthening Italy’s ties to the Eurofighter Typhoon of European Aeronautic, Defence & Space Co.

The F-35 jet developed cracks in testing of the fighter’s durability and wasn’t sufficiently reliable in training flights last year, the Pentagon’s chief tester said a report in January.

To contact the reporter on this story: Andrew Frye in Rome at afrye@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net James Kraus, John Simpson

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