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.

Take advantage of this little-known tax "loophole"
Every F-35 built costs U.S. taxpayers roughly $100 million. But this is just one way that recent tax increases have affected taxpayers. With the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "The IRS Is Daring You to Make This Investment Now!," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers