Defense Secretary Leon Panetta said last Friday industry has to do more to control costs with weapon systems when he formally announced work on an F-35 Joint Strike Fighter variant will no longer be on hold.

Panetta visited Naval Air Station Patuxent River, Md., to publicly state he was removing the Marine Corps’ F-35B short-takeoff and vertical-landing (STOVL) aircraft off a probation former Defense Secretary Robert Gates initiated last year. The probationary period was intended to last two years and either allow testers to work out technical kinks or lead the Pentagon to cancel the aircraft variant.

Panetta said the Patuxent River workers made more progress than planned in addressing known problems with the Marine Corps variant of the Lockheed Martin [LMT] jet fighter, which he said now “is demonstrating the kind of performance and maturity that is in line with” the Air Force and Navy F-35 variants.

“It’s not to say we don’t have a long way to go, we do,” he added. “We’ve got a long way to go with the JSF testing, and it’s obviously not out of the woods yet. But I am confident that if we continue to do the hard work necessary, if we continue to do the dedicated work that all of you have been doing, that both the carrier and the STOVL variant are going to be ready for operations, and are going to be ready for doing the work that they have to do, which is to help protect this country.”

Marine Gen. James Amos said in a statement he continues “to be encouraged by the strong and steady progress that the F-35B team has made over the past year” and remains “bullish” about its future. He pledged to continue to monitor the F-35B’s progress on a daily basis, as he has for the past 13 months, noting it will replace three of his service’s aging aircraft, the F/A-18, AV-8B, and EA-6B. 

Steve O’Bryan, Lockheed Martin’s F-35 vice president for program integration and business development, last Friday attributed the lifting of probation to the plane’s increase in flights last year and its meeting of or exceeding testing points.

The F-35B conducted 150 vertical landings and more than 330 short takeoffs in 2011, compared to much smaller numbers the previous year, he said during a call with reporters. Engineers reduced weight and addressed problems associated with the STOVL variant’s bulkhead, auxiliary intake doors, and drive shaft, he said.

“We are moving through what were those STOVL unique challenges we had last year and retiring those,” he said.

Work the company will do over the next year includes testing ordnance dropping, flying over ranges to examine the F-35B’s stealth characteristics, and flying the plane at its required maximum speed of 1.6 mach, he said.

“We’re not going to in any way rest on our laurels,” O’Bryan said.

Panetta, meanwhile, said his “department is committed to the development” of the overall multi-service, multi-nation F-35 effort.

“It’s absolutely critical, absolutely critical that we get it right,” he told the Patuxent River crowd. “The developmental testing that’s going on here will ensure that we get this right.”

Panetta, who met with defense company executives later in the day on Friday, during his speech further called on industry to help with cost-cutting that doesn’t impact military capability. He said the Pentagon is “looking at a number of steps to try to improve that competition and try to reduce those costs for the future.”

He called for an end to a mentality where company “get into an easy path” where “as long as you’re getting a check…you just kind of hope that everything goes its way.”

“We can’t allow that anymore,” he said. “Everybody’s got to join this effort….That means we have to push industry.” He said the Pentagon needs companies to produce systems faster, and “to move quickly, and to do it effectively.”

Panetta said the type of simulation testing occurring at Patuxent River is an example of something that that will help the military cut costs without impacting the quality of the weapons being produced.

“We’ve got a responsibility to develop the very best procurement reforms we can, to increase competition, to make people understand that they’re just not going to get handed easy money, they’re going to have to work for it, and they’re going to have to produce,” he said.

Panetta said he has to make clear “that disciplining our budget isn’t just my job, it’s their job.”

“And if they want our business, then damn it, they’ve got to show that they’re willing to roll up their sleeves and be as cost-effective as possible in helping us develop this technology for the future,” Panetta said.

Referencing defense-budget-cutting talks in Washington, Panetta reiterated his call for protecting the U.S. “research and development capability” and industrial base.

“If we’re going to mobilize, I have to have an industrial base that’s there to do what it has to do in order to give us what we need to confront any enemy,” he said. “And if we cut back on that industrial base, it will weaken us for the future. If we cut back on facilities like this, this will weaken us for the future.”

He maintained his intention to invest more money in capabilities related to intelligence, surveillance, and reconnaissance; space; and cyberspace, and to maintain global-strike and special-operations capabilities.