In a settlement that marks the latest chapter of a dispute overshadowing the manufacture of F-35 jets, Lockheed Martin and Howmet Aerospace have announced an agreement to their recent lawsuit. The case centered around an argument over the pricing and supply of titanium, a crucial element for F-35 production.
Lockheed Martin, a major defense contractor, had filed a lawsuit against Howmet, a key supplier, after they ended the titanium supply in November 2023. The cessation came after Lockheed refused to accept increased prices that were, according to Howmet, reflective of inflation and a global supply squeeze.
Insiders say the dispute has offered a unique peek into the usually private dealings between prime contractors and their key suppliers. According to the lawsuit, the aerospace giant sought federal intervention to compel Howmet to continue titanium supplies at their previously agreed-upon prices.
The struggle over pricing and supply issues stems from the broader geopolitical landscape. Following Russia’s invasion of Ukraine, there has been a tightening in the availability of titanium on the global market. The Russian firm VSMPO-Avisma, a major global titanium supplier, holds a significant portion of the world market, which has had direct implications on global access to the metal. Despite these factors, the US government and European Union have not issued sanctions on VSMPO-Avisma.
The Lockheed-Howmet legal dispute hasn’t been without its contentious points. Howmet responded to Lockheed’s initial legal action by accusing them of exploiting ‘national security interests’ and leveraging Howmet to improve their bottom lines. The crux of the dispute came down to a requested price increase, amounting to a $17 million difference – a small sliver of Lockheed’s total sales. This request was a result of Howmet facing increased competition and a subsequent price increase for the essential material.
Despite the legal wrangling, the F-35 Joint Program Office remains committed to keeping production on track. A spokesman for the F-35 JPO confirmed that Lockheed and Howmet’s agreement would ensure the dispute’s potential impacts would be mitigated, thus keeping aircraft production on plan. This settlement appears to solve the dispute over titanium pricing, but Lockheed continues to grapple with supply chain issues for the F-35s critical components.
Throughout the dispute, both companies have shown their willingness to fight their respective corners. Following the initial review of evidence, the presiding judge suggested that Lockheed’s argument was likely to succeed. However, he denied a request from Lockheed to compel Howmet to maintain the titanium supply amid ongoing litigation. The litigation was eventually brought to an end with a private settlement between both parties, details of which were not made public.
The ramifications of this dispute on the F-35 production schedule remain unclear, although it does highlight the complex dynamics of the defense manufacturing supply chain. Meanwhile, the titans of the industry continue to grapple with supply chain uncertainties as the political and economic climate evolves. Amid hardware shortages and ongoing software challenges, Lockheed and the Pentagon are looking to resolve the deliverable impasse for F-35s equipped with Technology Refresh 3 (TR-3) by July at the earliest.