The Lockheed Martin (LMT -0.13%) F-35 "Lightning II," "joint strike," "stealth fighter" jet may hold the record for the longest-named fighter in history. With a price tag that stretches well past $1 trillion, it's certainly the fighter with the most "zeros" on the checks written to buy it.
Because this jet is expected to account for as much as half the revenue Lockheed Martin makes during the next few decades, it's a program hugely important to the defense giant. But here's the problem: The F-35 is afflicted with an engine that's been called "overweight and underpowered" (and occasionally flammable), packs a gun that may not be combat-ready before 2019, and sports aerodynamics so clunky it's been nicknamed the plane that "can't turn, can't climb, can't run."
The U.S. Navy has suggested it may largely sit out the F-35, and wait for something better to come along to replace its fleet of aging F/A-18s. But not the U.S. Marine Corps. At the USMC, they're totally in the tank for the F-35B stealth fighter.
Why Marines l-l-love the F-35B
In an interview covered by BreakingDefense.com last week, Marine Corps Deputy Commandant for Aviation Lt. Gen. Jon Davis advocated for continuation of the F-35 program. Arguing that he has seen "absolutely nothing" to shake his confidence in the plane, Gen. Davis reiterated the Marines' intention to buy 353 F-35B (short take-off and vertical landing, or STOVL) aircraft, along with a smaller batch of F-35C (carrier variant) fighters.
The U.S. Navy is expected to buy a further 260 F-35Cs, but may reduce its buy. The Air Force would then buy the rest of the planned 2,443 F-35 run -- about 1,750 fighter jets, in conventional F-35A configuration.
What makes Gen. Davis so optimistic about the F-35? Citing recent initial operating capability (IOC) tests conducted by USMC pilots, the General sent up a flight of four F-35B stealth fighters to take on nine fighter jets playing the role of "enemy aircraft." While not divulging specific details of the tests, he said the mock engagement "went very poorly for the bad guys."
In further tests, Gen. Davis praised the F-35B's performance on mock Close Air Support (CAS) missions, deploying Joint Direct Attack Munitions (JDAMs) and GBU-12s smart bombs to attack targets. Summarizing the results, the General declared, "no airplane in the world will be able to touch this jet at Close Air Support."
Advocates of the Air Force's A-10 Warthog would probably disagree with that assessment. After all, the A-10 has been called "the best CAS platform mankind has ever designed" -- a title the F-35B will be hard-pressed to match.
But facts are just facts. Ultimately, it's the opinion of the buyer that counts -- and so far, the USMC seems to like the F-35B a lot.
A new paradigm for amphibious warfare?
And it's not just the USMC. In an article run on Foxtrot Alpha last year, defense-tech analyst Tyler Rogoway argued that, if used properly, the F-35B could remake the way the Marine Corps fights its wars -- and make the service infinitely more effective than it currently is.
Employed as the spear tip of a Marine Expeditionary Strike Group, Rogoway explained how F-35B stealth fighters launched from America-class mini-aircraft carriers could strike behind enemy lines in a sea assault. The radar-evading jets would eliminate air defenses, establish air superiority, and clear the way for MV-22 Osprey transport aircraft to move in Marines, leapfrogging coastal defenses and flanking defenders.
"Paired with the MV-22 Osprey's range and speed [F-35Bs supporting an] ESG can put hundreds of miles of inland territory under direct threat, both from the air and the ground," wrote Rogoway.
What it means to investors
Pentagon brass haven't endorsed this specific plan, although I can think of one Marine general who might like the idea. Last week, though, the Marines officially certified the F-35B as achieving IOC, with Gen. Joseph Dunford, Commandant of the Marine Corps and the presumptive next chairman of the Joint Chiefs of Staff, musing that the F-35B "will transform the way we fight." Should USMC proceed to make the F-35B the cornerstone of future Expeditionary Strike Groups, this would strengthen the chances of the Marines buying their full complement of 353 F-35B stealth fighters.
This would go a long way toward shoring up the multi-trillion-dollar revenue stream that Lockheed Martin is depending on the F-35 to produce for it during the next few decades.
At a full-rate production pace of one plane built per workday, it would guarantee Lockheed at least 16 months' worth of work building F-35Bs alone -- and $36.7 billion in revenues at currently advertised prices, plus additional billions for operation and maintenance. Combined with Air Force support -- the Air Force, unlike the Navy, remains 100% dedicated to the F-35 -- the Marine Corps' backing would seem to outweigh any Naval reservations, and ensure the program's survival.
Long story short: At long last, the F-35 has just secured a crucial backer, and scored some much-needed positive PR. For investors in Lockheed Martin, that can only be good news.