By Andrea Shalal-Esa
FORT WORTH, Texas (Reuters) - Lockheed Martin Corp
Lorraine Martin, executive vice president and F-35 general manager, said 2013 has been a transformative year for the $392 billion program, marking the beginning of pilot and maintainer training, reductions in production costs, and progress on software, weapons testing and other technical issues.
She said the program - the Pentagon's most expensive weapons program - remained intensely focused on finishing development and flight testing of the next-generation fighter over the next three years, as well as driving down the cost of building and operating the planes.
"The program is on stronger footing than ever before," Martin told 2,000 workers and guests at a ceremony celebrating completion of the 100th F-35 at the company's mile-long plant in Fort Worth that included patriotic songs and videos.
The Fort Worth area was shut down by a crippling ice storm late last week causing delays in flight testing required before Lockheed can turn the new F-35 jets over to the government.
Delivering the 36 jets in 2013 is important for Lockheed which is trying to demonstrate improved performance on a program that is years behind schedule and 70 percent over initial cost projections.
Martin told reporters that 2014 would be another key year for the program, with the Navy's C-model due to carry out sea trials on an aircraft carrier next summer, the first jet to be completed at a new assembly plant in Italy, and the first jet for Australia to be delivered.
Speaking in Washington, Air Force Chief of Staff General Mark Welsh underscored the importance of the F-35 to ensure U.S. air superiority and said current "legacy" fighters would not survive a future fight against stealthy next-generation fighters being developed by Russia and China.
"Operationally, we need the F-35 ... This is not a good time to walk away from the F-35 program in any way, shape or form," he told a Pentagon briefing. He said truncating the F-35 program would raise the cost of the remaining jets.
Lockheed is building three models of the radar-evading fighter for the U.S. military and eight countries that helped fund its development: Britain, Canada, Australia, Turkey, Norway, Italy, Denmark and the Netherlands. Japan and Israel have also ordered the plane, and South Korea has signaled its plan to buy at least 40 F-35s as well.
Air Force Lieutenant General Chris Bogdan, the Pentagon's F-35 program manager, told a defense conference last week that the program had a "tragic past," but the cost of the plane was coming down, flight testing was continuing, and most technical issues had been addressed.
(See interview with F-35 program chief: http://reut.rs/1dSZGgd0)
The last batch of F-35 A-models cost around $107 million, including the engines, but Martin said the company expected to beat that cost in the eighth production contract to be negotiated early next year.
By the time the new stealth fighter reaches full-rate production in 2019, she said it would cost around $75 million in current year dollars, or less, putting it on par with the cost of current fourth-generation fighter jets.
Orlando Carvalho, executive vice president of Lockheed Aeronautics, said Lockheed was aiming to deliver 38 aircraft next year, an increase of two from this year, and hoped to start ramping up production to help drive down costs.
"The need to ramp is key to being able to keep taking cost out of the airplane," Carvalho told reporters after the ceremony. He said the company was looking at every option for continuing to lower the cost of the aircraft.
He said Lockheed was meeting revised cost, schedule and delivery targets mapped out during a big restructuring in 2010, and had about three years to go until development was done.
"Like any smart athletic sports coach, we're not going to declare victory until the game's over and we're done," he said.
"With any program like this, you always have to be worried about an unknown that may come out of nowhere. We're never going to sit here and say we're out of the woods," he said, "What we're going to do is stay focused on the fundamentals, day in and day out, and just keep finishing the development."
Air Force General Robin Rand, commander of the Air Education and Training Command, told the ceremony that he was looking forward to the start of training at Luke Air Force Base near Phoenix, where the 100th jet will be delivered next year.
Lockheed is due to deliver 17 airplanes to the base by the end of 2014, and officials expect to start the first training course there for U.S. and allied pilots in May 2015.
Rand said the F-35 would be "the most lethal and advanced fighter airplane on the planet," and he wished he was 20 years younger so he could fly it.
(Reporting by Andrea Shalal-Esa; Editing by Jeffrey Benkoe and Diane Craft)