New F-35 Maneuver : The Death Spiral

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Well, we have yet another report that the F-35 well over budget and behind schedule:

Reports prepared by the Defense Contract Management Agency for Defense Department officials show that Lockheed and other contractors are months late on deliveries of test airplanes and components for future production aircraft.

The program is even farther behind on testing, and the reports say Lockheed could exhaust its development budget within a year.

Problems cited in the documents, obtained by the Star-Telegram under the Freedom of Information Act, support a recent Pentagon assessment that F-35 development will require two more years and billions of additional dollars.

That's not the death spiral part. The death spiral part is that many of the partners are looking at deferring or canceling purchases on the basis of the schedule slips and price increases:

In a long-awaited decision, cabinet's national security committee was due to sign off on the $16 billion purchase before Christmas.

But defence budget pressures and Defence Department concerns about Australia becoming the lead foreign customer for the initial production models of the F-35 fighter are expected to force a postponement until the new year of a government green light for the acquisition.

As the budget numbers come out, you will see reductions or orders, which will drive unit price up, which will lead to reductions of orders, rinse, lather, repeat.