Team Biden Plans 18% Reduction In Lockheed Martin's F-35 Fighter Jet Orders For 2025 Due To Budget Constraints: Report

The Biden administration is reportedly planning to slash the number of F-35 fighter jets ordered from Lockheed Martin Corporation LMT by 18% in the upcoming 2025 budget. This decision comes as a result of Congress imposing a limit on the size of the defense budget.

What Happened: Based on unnamed sources, Reuters reported that President Joe Biden aims to reduce the Pentagon’s order for Lockheed Martin’s F-35 stealthy fighter to below 70, down from the anticipated 83. This would result in an approximate $1.6 billion reduction in jet spending.

The decreased F-35 orders could have implications for Lockheed Martin, which derives roughly a quarter of its revenue from the jet program. Despite this, the international demand for the jets remains strong, with each aircraft costing between $80 million to $120 million, depending on the type.

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Lockheed Martin’s shares dropped by 2.6% following the news. The company, in a statement, expressed its willingness to collaborate with the Biden administration and Congress on the 2025 fiscal year budget.

Biden’s proposed defense and national security budget is projected to be $895 billion. This has led to substantial cuts in various programs, delays in ongoing programs, and a slowdown in efforts to replenish weapon stocks depleted by conflicts in Ukraine and Israel.

Why It Matters: This decision by the Biden administration comes amid a series of challenges faced by Lockheed Martin. In January, the company announced a potential delay in the delivery of an upgraded version of its F-35 fighter jets due to software issues, leading to a significant drop in its stock price.

The U.S. government’s interest burden from its ballooning debt has also been a cause for concern, with Tesla CEO Elon Musk recently calling it “unsustainable.” The interest on the debt for the fiscal year-to-date period stands at $357 billion, marking a 37% increase year-over-year.

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