Lockheed Martin NYSE:LMT, a prime contractor on the U.S. Army's Dark Eagle hypersonic missile program, is facing delivery delays as quality defects continue to affect the manufacturing line. Lt. Gen. Frank Lozano, the Army's top official overseeing missile programs, said the service is working through the problems but must understand what caused them before accepting the remaining missiles. Lockheed Martin said it is improving its production and manufacturing processes in an effort to accelerate deliveries. Lozano indicated that the final two missiles from the initial eight-missile installment could be delivered in roughly two months, potentially allowing the unit at Fort Lewis-McChord in Washington state to be declared fully combat ready.
A unit of Leidos Holdings, another prime contractor on the program, is working alongside Lockheed Martin, while final missile assembly takes place in Courtland, Alabama. Lozano did not identify which facility was experiencing the issues, but said the Army hired Boston Consulting Group about a year ago to help identify ways to improve manufacturing and production. The delays provide investors with a closer look at the production challenges facing U.S. hypersonic programs as the Pentagon considers increasing missile output in the coming years. The U.S. has spent more than $12 billion on hypersonic weapons since 2018 but continues to trail China and Russia in deploying them.
At least $50 billion remains earmarked for the Army program and the Navy's related Conventional Prompt Strike weapon, according to the Government Accountability Office. The agency said quality and production problems have delayed testing and deliveries, while the current production rate for the Navy's missile remains well below its target of 12 rounds per year. The GAO also cited overly complex work instructions and incomplete parts, while warning that the Army and Navy may struggle to increase production rates without first stabilizing manufacturing quality. The Navy's effort to modify three DDG 1000 Zumwalt-class destroyers to carry the missiles is now 24 months behind schedule, suggesting that production execution and program coordination could remain important considerations for defense investors.