FORT WORTH - U.S. Defense Secretary Robert Gates threw his support behind Lockheed Martin Corp's F-35 on Monday amid mounting speculation the new fighter could face cuts as part of future Pentagon belt-tightening.

Gates said he told Lockheed executives during a visit to the F-35 plant how crucial it was to keep the $300 billion program on cost and on schedule given tighter defense budgets, but he said most serious issues facing the fighter were over.

My impression is that most of the high-risk elements associated with this developmental program are largely behind us, Gates told reporters after touring the massive complex, talking with workers and autographing a plane in a hangar.

Gates said company officials expressed confidence that development problems either had been, or were being addressed through better manufacturing and supply chain improvements.

In September 2008, the Pentagon's Joint Estimating Team estimated the F-35 would cost $5 billion more than planned and take two more years to complete, saying the program's estimates were too optimistic about the manufacturing and flight test schedule, software coding and engineering staff reductions.

Gates said he could not rule out future problems, but was still convinced that building three variants of the new fighter with many common parts would save money in the long run.

We cannot afford, as a nation, not to have this airplane, he said. In full production, the F-35 would also cost half as much as Lockheed's F-22, the top U.S. fighter, Gates said.

The Obama administration wants to stop building the F-22 fighter and focus its efforts the F-35, but defense analysts say the F-35 program could become vulnerable to cuts if its costs start to increase or it encounters delays.

Lockheed is developing three radar-evading F-35 models to replace at least 13 types of aircraft for 11 nations initially. The United States plans to buy 2,443 F-35s for the Air Force, Navy and Marine Corps. Purchases by partner nations will increase production to around 3,000.

I can't stand here and say there won't be further cost growth or anything like that, but I think everybody is aware of the importance both of the timelines and the execution of this program to keep the cost as low as possible, Gates said.

BUDGET REFORM

He said 75 percent to 80 percent of flight tests were rated Code One, which meant the aircraft came back ready to fly again without adjustments, a big gain over other programs.

Gates reiterated his opposition to continued congressional funding for a second F-35 engine being developed by General Electric Co and Rolls-Royce Group PLC, and said lawmakers had been told that President Barack Obama's advisers would recommend a veto if the fiscal 2010 budget included it.

At this point... where a dollar added to one program takes away from another program that we think is more important, we feel strongly about the fact that there is not a need for a second engine, Gates said.

The primary engine for the aircraft is being built by Pratt & Whitney, a unit of United Technologies Corp.

Gates told Bloomberg Television in an interview on Monday that he saw consensus among lawmakers, defense officials and the White House to get the Pentagon's acquisition process under control and hold programs to their budgets and schedules.
He said it looked promising that the administration would prevail in its drive to halt the F-22 program, and restated his opposition to efforts to revive Lockheed's VH-71 presidential helicopter program, which was canceled earlier this year.

He said it would cost $2 billion more to complete the first five production helicopters, bringing the cost of each helicopter to around $1 billion. The VH-71 is a poster child for an acquisition program gone seriously wrong and there's no reason to throw good money after bad, he told Bloomberg TV.

Gates said he would argue for modest continued real growth in the defense budget, against the ups and downs in spending that occurred in the past. It's the stability that we need.

Lockheed Chief Executive Robert Stevens said his company understood the importance of keeping the program on cost and schedule, and was doing all it could to ensure that as the new fighter moved through testing into full-rate production.

Signs are the jets are performing extremely well, he told Bloomberg TV.

Eight countries are F-35 co-development partners: Britain, Canada, Italy, Denmark, Netherlands, Norway, Turkey and Australia. Northrop Grumman Corp and BAE Systems Plc are Lockheed's chief F-35 sub-contractors.

(Reporting by Ed Stoddard and Andrea Shalal-Esa; Editing by Tim Dobbyn)

Manufacturing Barack obama