Does Lockheed Martin mislead stock analysts when commenting on F-35 test progress? #Military

Yesterday, Lockheed Martin CEO Robert Stevens told stock market analysts that, for 2011, the company proposes to double the number of F-35 test flights performed in 2010.

This may be a surprise to the F-35 program because they are still trying to pick themselves up from more development delays. These delays have cost Lockheed Martin more than $11.5B pulled from jet purchases by a U.S. Department of Defense that pretended surprise of trouble.

A proclamation of doubling test flights might not be especially interesting since the software block development is way behind. Everything this aircraft does in development testing depends on the right software version to match the needed test point.

Without stocks–and interest in them–a company like Lockheed Martin can not exist. The F-35 program troubles have required some creative explanations to stock market analysts that hype the value of Lockheed Martin stocks to investors.

In May of 2008, when having to explain F-35 program schedule slips to stock market analysts, Stevens said, “Watch this space. We are committed to flying the STOVL mission by the end of this year and we will be scored as to whether we do or don’t do it.” At the time the F-35 program had already stated a delayed plan to start “build down” tests to a vertical landing in the first quarter of 2009.

The STOVL variant of the F-35 would not complete its first vertical landing until almost 2 years after Stevens May 2008 claim.

While some that claim the test program is “on track”–with just a few minor inconveniences–a little history brings things into a less positive light. This was the proposed flight test plan back in 2007. Look at the U.S. fiscal year setup. If Stevens does pull off his claim of doubling fight tests for this calendar year, it will still be two-thirds of that proposed for fiscal year 2010 back in 2007; and a whole lot less than the historical reference for fiscal year 2011.

More history? The people that sold this con to us known as the F-35, claimed that its goal was to be a model procurement program.

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3 thoughts on “Does Lockheed Martin mislead stock analysts when commenting on F-35 test progress? #Military

  1. FWIW, I actually shorted LMT stock @ $105, but covered too soon at around $96.

    I haven’t played it since then.

    Either way, I would wish LM success and a viable business model and practical defense manufacturer (regardless of any dreamy stock price produced by any one assumed product line).

  2. What it comes down to, for me, is how many jets Lockheed will have on the ramp (as a fraction of the size of the test fleet originally proposed) and how much money-per-basing-mode each variant airframe will be allocated (again vs. the original plan) vs. how much problem solving will (or can) actually occur while fixes are in-process at the component engineering level.

    Numbers + Cash = achieveable flight test goals, ‘all other things being equal’ (no STOVL variant structural vs. envelope point compromises in basic airframe performance clearance…).

    Since they aren’t going to announce that (for fear someone would deduce how much LM could afford to ‘privately invest’ on a given flight test budget amount) we are in a bit of a fix for guessing how honest the game is being played.

    Not least because the only compareable, real, tactical aircraft programs (by which to set standards) are also effectively sourced to the same company in the F-16 and F-22.

    Particularly on the Raptor, we have to look at the ‘hardware limited’ capability restrictions in all but the final 87 of the Block 30-35 airframes of the F-22 force and do a big sanity check on any promises that system improvements can be activated or enhanced by purely software revision in the F-35.

    Indeed, I have to wonder if we are looking at a scenario where:

    1. Lack of capability via software functionality is invented to force acceptance of a downgraded -physical- capability, that never met spec to begin with.

    In this, the F-22 was supposed to be a goldplate design where no cheating was allowed while the ‘CAIV’ F-35 shows signs of exactly such _deiberate_ design compromise in it’s PDR/CDR lies about airframe weight and the loss of such key produceability plusups as Quickmate (which also could have theoretically meant a mix and match replacement scenario for ‘broken’ wings, centerbodies, forward fuselages etc.. All very bad for a company who wants to sell an -excess- of airframes based on a ‘traditional’ production model).

    2. If similar ‘hardware limitation’ (processor speeds, mission computer memory, bus speeds or cooling come to mind) as the real problem with the F-35 is associated with secret Inspector Gadget modes (HPM as EA) that are essential in turning a Wildcat into a Mustang.

    Or if it’s really more a case of ‘better to install later commercial systems, as they become available’ rather than overbuild a baseline architecture. As an admission that the civilian computer architecture world now leads the military one in terms of setting capability bars.

    If accepting a downgraded mission capability in terms of full envelope clearance, weapons loadouts or some tactical modes is something that could be fixed, incrementally, via the ‘spiral’ process then that’s one thing.

    If it means that X# of first-build airframes (Eric’s ‘mistake jets’) cannot be modified, regardless, then that’s another. Which is not necessarily the same as saying it’s a program-killing either:or. It just depends on which mode capabilities are forever lost and how rapidly the mistake jets become unsuitable, even for training.

    I think there is a HUGE amount of politics going on here. To use the Raptor Helmet Sight limitation as an example, I find it simply amazing that such a basic system capability, critical to even the baseline A2A mission achievement and one which the Israelis say they can add to any Mirage III or F-5E in a heartbeat for less than 500K per jet, is somehow truly ‘unsuitable’ for adoption on the Raptor until 3.2 or later. And then only on about half the jets.

    If true, this amounts to treason on a grand scale and someone should be shot for it because JHMCS is in fact on just about every other U.S. platform out there.

    Again, this is such an essential capability to keep the aircraft from having to point it’s nose at a target when dogfighting with all of two 90` HOBS missiles.

    While even for a pure BVR ‘interceptor’ style tactical system, it is crucial in helping the pilot maintain multiship (detached support = BVR section spreads) orientation and cross check on sensor locks. Because his radar sees farther than his HUD will usefully display aspect as vector state (the helmet allows both, more naturally, when the targets may be spread across as much as 120` of AON…).

    In theory, an HMCS could also be used to cue a pre-SAR SDB, especially with a seeker, on targetboxes containing popup mudthreats. It should be a cheap and dirty mod.

    Yet the HMCS is not going into a jet that was supposedly built with a massive spare computer capacity. Why?

    My guess would be either that there are existing, underoptimized computer architectures in the F-22 which are NOT overbuilt to provide sufficient spare capacity (breach of contract) or that, in order to provide impetus for the F-35, the Raptor is being purposefully underdeveloped (contractor fraud).

    Neither of which would occur if the procurement system political influences didn’t permit or even encourage it.

    And if over half of these, _in existence_, uber-jets are now not subject to ‘spiral’ improvements, then it says an awful lot about how much we can trust LMTAS to do the right job on el-cheapo F-35 in a ‘later, later…’ approach.

    Which is where the Viper pulls into the gate because LM Ft. Worth is still GD Ft. Worth in terms of business model (sell them until -we say- they aren’t broke) as far as I’m concerned.

    And General Dynamics pulled the exact same crap with the underdeveloped block standards and ‘MSIP’ refits (which never happened until CCIP essentially stripped and rebuilt the jets from the ground up, under UP/CUPID/STAR) for the F-16 fleet.

    The Blk.1-10 F-16A was little more than an FSD jet with some basic RHAWS and even beyond the deep stall AOA limiter and F100-PW-100 slam-surge issues, they all frankly -sucked- in terms of maintainability and reliability.

    Requiring an almost total system layout and component redesign before the fuel, ECS, AMAD and avionics cooling was both pullable enough to be fixed and long enough lasting to be economical between pulls.

    It took until the Blk.15 OCU to get a really working F-16A fleet and until about halfway through Blk.30 to get a sufficiently improved radar, with the right engine and inlet, to be justified as an ‘improvement’, in the C (it also took about 30 years longer than it should to get a working PGM delivery capability, we were dropping LGB _with a helmet sight_ off of YF-16s using ATLIS-II, late in the 70s, comparitively, the Blk.50 spent 10 years without Sniper as little more than a C.30 HUD bomber…).

    THAT kind of crap (building junk to force the direct purchase of ‘improved’ replacments) as a commercial sales tactic has to be avoided.

    At the same time, I fully expect the USAF transitional window and tactics model standup to take about 5-7 years -after- service entry to field a truly useful, family of systems integrated, mission capability, even if the F-35A is all that they say it is.

    AAR where, EA for how long on which threats, basic BFM/DACM level functional tactics for 4-missile sections, how?
    All this leads to an understanding of how many off-limits areas will be suddenly reachable when you have loft capability for standoff glide weapons.

    A lot of which can be simmed, based on projections.

    But if the projections are flawed or simply never attempted due to cheap, ‘hardware limited’, design flaws, it really helps if you have actual flight hours to prove out an alternative, both with the existing system and as a within-block improvement train of ECPs.

    Certainly both the pilots and the maintainers need some hands’-on time.

    Which is to say that Block 0 to Block 5 airframes NOW (within 2-3 years) may buy us some necessary improvements before we are stuck with more ‘mistake jets’ in .10 and .15.

    But only if we move towards an aggressive DOT&E mode which lets the FWS tactics people at Nellis and the schoolhouse/operational setups at Eglin/Hill work hand in hand.

    And that requires a basic acknowledgement of how much is ‘working’ on the jet as is, right now, to give us at least 90 airframes (I don’t believe you need 59 per unit).

    If it was truly ‘just software’ that was involved, I could see Lockheeds logic in wanting to ramp the line and start issuing jets to the users to build confidence and get some ‘we like it!’ inertia on their side. It would also open up the international program options, assuming you did something similar to the Luftwaffe school at Holloman.

    Because those jets are going to get ridden hard and put away wet developing an experience base and won’t be worth anything within a decade.

    The ultimate question then becomes how many more flight tests are necessary to get a stable system configuration with something approaching the required CPFH/MMH:FH/MTBF to jumpstart that process?

    I doubt if either LMTAS or the Services is ready to be that honest in providing a check list of necessary component systems that must be replaced or upgraded, installed and validated in the SDD fleet ‘as it stands’.

    So that we see _progress_ and not just meaningless flight test number crunching.

    Better fuel pumps and resolved EHA cooling issues come to mind here. Non mode-vs.-code specific admissions of ‘software or hardware limited’ underachievements in the avionics do too.

    And all the while, we have to look at the Pak-FA and J-20 and ask ourselves: 2012 + 10 = 2022. 2016 + 10 = 2026. 2018 + 10 = 2028.

    How long do we want to play the game of ‘our fight test plus service standup plus inventory build beats your flight test plus service standup plus inventory build’ in terms of getting a useful fleet life out of an airframe which we might otherwise expect a 20-25 year service life?

    ‘Except that’ threat parity or overmatch makes the platform tactically obsolescent before it is mechanically worn out.

    Is 10 years of service worth 127 million each? Such smacks of purely commercial interests as a rush to planned obsolescence to me…