The aircraft engine unit of United Technologies (NYSE:UTX) continues to have issues with its supply chain, according to a new Pentagon report, causing most of the engines ordered for the F-35 Joint Strike Fighter to be delivered late in 2019.
UTX subsidiary Pratt & Whitney delivered 128 F-35 engines late in 2019, according to a report from the Pentagon's F-35 program office obtained by Bloomberg, with eight arriving on time and 14 coming in ahead of schedule. That tardy rate of 85% for the year is in line with 2018 figures, and up substantially from previous years.
The report blamed the delays on "issues with parts and suppliers," which the Pentagon is monitoring closely. Pratt & Whitney, according to the report, is working closely with its supply chain, and "has made some progress but more progress is needed to meet the monthly schedule."
The delays come at a pivotal moment for the F-35 and its lead contractor, Lockheed Martin (NYSE:LMT), as the Department of Defense is nearing a decision as to whether to move ahead into full-rate production on the plane. The F-35, despite a number of development and production stumbles, is expected to be a trillion-dollar program for Lockheed and its subcontractors, but defense officials are eager to eliminate glitches before moving ahead with expanded production.
Of the 93 engines in the recently completed 11th low-rate production block, 90 arrived an average of 41 days late, according to the report.
United Technologies, which later this year is expected to merge its aerospace business with Raytheon to form a new defense titan, is facing pressure from all sides as it tries to get the complex engine out the door.
The company is both trying to speed deliveries of key components from suppliers while at the same time bringing down costs. Bloomberg reported in January that the Pentagon is investigating why Pratt & Whitney was only able to deliver 3% cost savings on a recently signed new low-rate F-35 production deal, while Lockheed Martin brought down its costs by about 15%.