Industrials | National Investor Network

Lockheed Martin ’s F-35 Profit Margins Slip Following Termination of Low-Cost Manufacturing in Turkey

Written by Jeffrey Richmond | Mar 3, 2020 5:22:03 PM

The Lockheed Martin F-35 Lightning II’s profitability could suffer due to the program losing access to less expensive parts suppliers in Turkey.

Ankara was booted from the Joint Strike Fighter program in July 2019 after the country decided to buy the Russian-made Almaz-Antey S-400 Triumf surface-to-air missile battery. This is in direct contradiction to the stealthy F-35 program.

Greg Ulmer, vice-president of Lockheed Martin’s F-35 program said, “There are many cases where we just went back to a previous or the original supplier.” 

For example, he noted that the Dutch company Fokker Emo’s electrical wiring work is being returned to the Netherlands, and new suppliers have been found for all the Turkish-produced parts.

Ulmer acknowledges the process of repatriating work to more expensive regions could hurt the F-35’s profit margins.