Lockheed Martin has entered an initial production and sustainment agreement with the US Department of Defense for at least 850 F-35 Lightning II fighter jets over the next 10 years, the parties said on Thursday.
The defense contractor will self-fund at least $7 billion in initiatives supporting the F-35 program, the department said in a statement. The Pentagon, which US President Donald Trump refers to as the Department of War, described the arrangement as a major shift in how the country builds weapons.
Terms of the F-35 production agreement
The F-35, which uses stealth technology to avoid enemy detection, is widely regarded as the world’s most advanced fighter jet. Lockheed’s aeronautics division, which builds the aircraft, accounts for close to 40% of the company’s quarterly revenue.
Under the deal, Lockheed aims to keep annual production at 156 aircraft. The agreement is not an order, but it is counted as a prearranged long-term contract. The company said that if the department grants multi-year authority in the coming months, the F-35 Joint Program Office and Lockheed will work to finalise contract terms, pricing and schedules through a formal award.
Economic impact and supply-chain goals
The agreement also covers international orders for the F-35, along with initial spare parts and modification kits, the Arlington-based company said.
Under Secretary of Defense Michael Duffey said the department had changed how it stabilises the American defense industrial base. “This agreement with Lockheed Martin proves it,” he said, adding that aligning financial incentives with performance would keep warfighters equipped.
Lockheed estimates the deal will support 317,000 US jobs and generate nearly $79 billion in annual economic activity over the next decade. The company also expects the arrangement to lower production costs and ease supply-chain constraints, from raw materials to finished parts.
