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The biggest secret in Lockheed Martin’s Aeronautics division made news again last week.
A classified contract that involves a “highly complex design and systems integration” project fell $45 million deeper into red ink in the second quarter, bringing the company’s total losses on the program to $335 million since 2022, according to Lockheed’s quarterly filing with the U.S. Securities and Exchange Commission.
But what is it?
A reasonable interpretation of the language in Lockheed’s financial filings suggests this is not a demonstrator aircraft or experimental vehicle. In fact, this “complex design” is close to entering production, as Lockheed’s filings note that deeper losses are possible as the company and its supply chain incur “advanced procurement costs.”
The program also appears to face some risk of cancellation. After all, advanced production costs are normally funded by Lockheed’s military customers. But if that customer has not requested funding to launch the first lot of production, Lockheed might need to spend its own money to buy long-lead items and tooling and keep the program alive, especially if other stakeholders—such as Congress—are likely to add the money back. But Lockheed acknowledges the risk that these “pre-contract” investments may never be recovered.
“We will monitor the recoverability of pre-contract costs, which could be impacted by the customer’s decision regarding future phases of the program,” Lockheed says in the filing.
The program’s existence might have remained a secret, except for Lockheed’s regulatory obligations as financial losses have piled up.
The first signs of trouble came in the second quarter of 2022. The company reported a $225 million pre-tax loss on the classified Aeronautics program after completing a comprehensive review, a Lockheed filing said. Three months later, the filings offered new hope the program was back on track—the customer had signed a memorandum of agreement with Lockheed to modify the scope and price of the contract.
But Lockheed’s financial filings may tell only part of the story. Other disclosures since 2021 suggest a large-scale production program is underway at Lockheed’s Skunk Works base in Palmdale, California.
In August 2021, Lockheed opened Building 648 on the Palmdale campus, a futuristic factory whose employees are capable of assembling the most advanced aircraft. In briefings to reporters during the grand opening, Lockheed showed how they had mastered not only 3D-printing of composite aerostructures at geographically distant facilities with supplier Spirit AeroSystems, but also fastening the sections together using non-deterministic structural assembly methods.
A year later, a strange news release appeared out of nowhere. On May 31, 2022, Safran Landing Systems Canada Inc. announced receiving a contract from Lockheed to design and qualify a landing gear structure for a “future aircraft.” Most flying demonstrators borrow landing gear from existing aircraft. The expense required to design a new landing gear generally is reserved for programs of record, not one-offs. At the time, Safran and Lockheed declined to elaborate on the announcement.
Meanwhile, Lockheed’s workforce in Palmdale exploded. As Aviation Week reported last September, the head count numbered over 5,000, or more than double the division’s roster in 2018. John Clark, the Skunk Works general manager, confirmed production had resumed, but did not elaborate on the reasons.
So what is being built?
The answer might lie in previous Aviation Week reports by Senior Editor Guy Norris. In November 2013, he reported the Skunk Works was working on a hypersonic successor to the SR-71 Blackbird. The new concept, dubbed the SR-72, would be powered by a turbine-based, combined-cycle propulsion system, which includes a turbofan and scramjet. Four years later, Norris followed-up with a second report, affirming the technology had progressed far enough within the Skunk Works for flight testing to begin. An F-22-size, optionally piloted vehicle was ready to enter development in 2018, Norris reported.
Such an aircraft could fit into a family of long-range strike systems first outlined nearly 14 years ago.
In October 2021, Maj. Gen. Dave Scott, then-deputy chief of staff of plans and programs, described a Long-Range Strike Family of Systems. It would include several familiar members, such as a new bomber (the Northrop Grumman B-21), a new cruise missile (the Raytheon AGM-181 Long Range Standoff Weapon) and a hypersonic missile (Lockheed’s AGM-183 Air-launched Rapid Response Weapon).
And the family would be supported by other new systems that never have been identified. According to Scott, these included plans to field a Penetrating Stand-in Airborne Electronic Attack (P-AEA) system and a Penetrating Intelligence, Surveillance and Reconnaissance (P-ISR) system.
The Skunk Works now boasts the facilities, workforce and technology to build a new aircraft at scale. The company’s financial filings confirm the program is on the cusp of entering production. And Aviation Week’s previous coverage points to earlier interest in a high-speed vehicle on a schedule that aligns with current information.
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