Lockheed Martin Corporation's F-35 Fighter Jet Catches Fire -- in a Bad Way

At $100 million per copy, the Air Force can't afford to have too many more Lockheed Martin F-35s go up in smoke.

Jun 24, 2014 at 2:04PM

The first Lockheed Martin F-35 fighter jet arrived at Eglin AFB in 2011. Photo: Wikimedia Commons

With 104 F-35 Joint Strike Fighter jets delivered to-date, but a goal of selling more than 5,000 of the birds eventually, Lockheed Martin (NYSE:LMT) has been hoping the F-35 would "catch fire." Just not like this.

U.S. Naval Institute (USNI) News reported last night that an F-35A fighter jet at Eglin Air Force Base in Florida caught fire -- literally -- when attempting to take off on a training mission Monday. According to USNI, while the pilot was able to escape the burning plane, the $100 million-fighter jet was "severely damaged" and even "possibly destroyed."

What's that smell?
So far, the Air Force is saying only that there was "a fire in the back end of the aircraft" -- where the engine is -- but is not speculating on what caused it. According to the Los Angeles Times, "[A]ll F-35 flight operations for the Air Force at Eglin have been temporarily suspended as the military investigates the cause of the incident."

What is clear is that the news out of Florida constitutes a significant PR snafu for Lockheed -- and potentially a setback to a program that's expected to eventually produce upward of $1 trillion in revenues for Lockheed Martin.

To make those potential revenues actual, Lockheed Martin must spend more time building new aircraft, and less time helping the Air Force fix problems with the aircraft it's already bought and paid for. And with nearly 40% of all potential worldwide sales of the aircraft expected to come from international customers, getting revenues flowing will also require Lockheed to maintain enthusiasm for the plane among potential buyers.

Who's to blame?
This may become increasingly difficult, given recent events. After all, this isn't the first time things have gone wrong with the F-35 -- or even just the first time something has gone wrong with the plane's engine.

Two weeks ago, a malfunction involving oil valves aboard a Marine Corps F-35B while in flight caused the Pentagon to order mandatory inspections of the nation's entire fleet of F-35s (of all variants), suspending flights until inspections could be completed. (Similar issues were subsequently revealed on two other F-35s). As with this week's fire incident, the culprit then appeared to be Lockheed partner United Technologies (NYSE:UTX), which built the oil flow management system that underwent inspection earlier this month, and is also responsible for building the plane's F135 engine as a whole.

Hope springs eternal
Not all developments with the F-35 are bad, of course. For example, right about the same time firemen were hosing down Lockheed's burning plane, Bloomberg was reporting Monday that upgrades for the F-35, intended to keep the plane modern as technology advances are getting cheaper.

Through 2016, the Pentagon had estimated it would cost $2.57 billion to fix issues with, and make upgrades to planes already purchased. Now, the Pentagon is telling Congress that these costs could be as little as $1.65 billion -- 36% lower than previously assumed.

Of course, the Pentagon crunched these numbers before learning about its fire in Florida. If Lockheed doesn't get a handle on its quality-control problems soon, those savings could still go up in smoke.

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Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

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Everything else is details. 

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