Exclusive: Japan secures extra cost cuts on U.S. F-35 fighter jet package - sources

Wed Feb 1, 2017 5:36am EST
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By Tim Kelly and Nobuhiro Kubo

TOKYO (Reuters) - Tokyo has secured cost cuts on support equipment for its next batch of six U.S. F-35 stealth fighter aircraft of around $100 million, according to sources and Japanese budget papers, on top of savings being finalised for all buyers of the high-tech jets.

The deal represents a rare case of Tokyo negotiating down the price of military hardware from its U.S. ally and underscores progress for the Lockheed Martin Corp-run F-35 program, which has faced criticisms over cost overruns and other problems.

U.S. President Donald Trump, who lashed the program as "out of control" in December, said on Monday he had been able to shave some $600 million from the latest U.S. deal to buy about 90 F-35s from Lockheed.

But defense analysts and sources downplayed news of those cuts, saying the discount hailed by Trump was in line with what had been flagged by Lockheed for months and would apply to other countries committed to the program.

Lockheed and the Pentagon did not directly respond to questions regarding the Japanese deal.

A spokesperson for the U.S. Defense Department office which runs the F-35 program said negotiations over the current batch of fighters, known in the industry as LRIP 10, was continuing.

"For every nation that buys an F-35 in LRIP 10, the base price of the F-35 will be the lowest in F-35 history," Lockheed spokesman Michael Rein said.

The price of the F-35 has been dropping with each new batch as Lockheed and the U.S. government ramp up production, helping to lower overall costs.   Continued...

FILE PHOTO -  A U.S.Marine Corps F-35B joint strike fighter jet conducts aerial maneuvers during aerial refueling training over the Atlantic Ocean in this undated picture released August 20, 2015.  The Marine Corps' F-35B model can take off from warships and aircraft carriers and land like a helicopter.   REUTERS/US Marine Corps/Handout/File Photo