The consolidation of the U.S. defense industry during the 1990's left
the jet fighter building business to primarily two companies: Lockheed
Martin and Boeing. Analysts have warned that the recent decision to
award Lockheed Martin a $19 billion contract for the next phase of
development in the Joint Strike Fighter (JSF) program could mean that
only one fighter jet company remains. "The loss could theoretically put
Boeing out of the fighter business once [Boeing's] F-18 is completed,"
said Christopher Mecray, aerospace analyst at Deutsche Banc Alex. Brown.
Boeing is also hurting from a sharp decline in orders of its' commercial
jet unit. Since early September Boeing stocks have dropped 30%. As a
result, Boeing is preparing to layoff up to 30,000 workers by mid-2002.
But Boeing may still have a role in the JSF program, especially if
legislators from Missouri have anything to say about it. In Boeing's
corner are Senators Christopher Bond and Jean Carnahan, who have
suggested offering legislation to require the military to split
production and set up two production lines, one in Fort Worth and one in
St. Louis to keep Boeing in the fighter business. "This debate should be
about what is best for the nation, not Texas, Missouri or any one
company," Bond said.
Yet if that were truly the debate, maybe the DOD and members of
Congress would be debating whether or not the U.S. should be developing
three advanced fighter planes. Despite campaign promises by President
Bush to "skip a generation" in weapons procurement, all three of the
Pentagon's advanced fighter plane programs are moving forward. In
addition to the JSF, the Pentagon is developing two other advanced
fighter planes: the F-22 raptor and the F/A-18E/F Super Hornet. The F-22
program is estimated at $63.4 billion for 339 aircraft, being developed
by prime contractor Lockheed Martin and Boeing. The Super Hornet is a
$47 billion project for 548 tactical attack aircraft (at $86 million a
piece) to be used by the Navy and the Marine Corp, being developed by
Boeing and General Electric (prime contractors, and Northrop Grumman a
subcontractor).
Nevertheless, Texas Senator Kay Bailey Hutchison has promised to block
any efforts by Missouri's delegation to require that work on the Joint
Strike Fighter be shared with Boeing. Hutchison said that Lockheed
Martin won the $300 billion contract fairly and that the legislation
proposed by Sen. Bond would serve to undo the government's decision.
However, Hutchison said she wouldn't oppose Lockheed voluntarily sharing
some work with Boeing. Both Hutchison and Bond sit on the defense
appropriations subcommittee, which has the lead Senate role in setting
defense spending.
The St. Louis Post-Dispatch reported that Jerry Daniels, chief
executive of Boeing's military division, said last week that the company
still hopes to get a "meaningful" piece of the Joint Strike Fighter
work. Lockheed Martin asked Boeing to evaluate how they might contribute
to the project. Boeing is also working on a sizable portion of the F-22
program and has a number of weapon contracts with the Pentagon including
the F/A/-18, the F-15E Eagle, AV-8B II Harrier, T-45 Goshawk, and the
C-17 Globemaster III. Boeing is also the prime contractor for the
National Missile Defense system that the Bush administration is pushing
so hard.
The JSF (also called the F-35) is being advertised as the "world's
premier" strike platform to be unveiled in 2008 when the first 22 planes
are delivered. The multi-role strike fighter will be used by the Air
Force (in place of A-10s and F-16s), the Navy (F/A-18s), and the Marines
(AV-8Bs). The UK is a full partner in the program. Denmark, Norway, the
Netherlands, Canada and Italy have joined as partners and Singapore,
Turkey and Israel are foreign military sales participants for this
phase. Britain's Royal Air Force and Navy have committed $2 billion to
the development and is planning to purchase 150 of the fighter planes.
Northrop Grumman and British Aerospace, and possibly Boeing, are
subcontractors. Each plane is projected to cost $40 million a piece.
If the program proceeds according to plan, the Pentagon will request
3,000 F-35s, making it the largest acquisition program in history. The
total value of the contract could be worth more than $300 billion.
Knowing the stakes involved in a deal of such proportion, the five-year
competition between Lockheed Martin and Boeing was fought, not only by
engineers and scientists, but also by high paid lobbyists and
advertisements too.
The Center for Responsive Politics reported that Lockheed Martin spent
more than $9.8 million lobbying members of Congress and the Clinton
administration during 2000, more than double what the company spent in
1999. Boeing spent $7.8 million in lobbying expenditures during 2000,
$400,000 less than 1999. Campaign spending (soft money and PAC) for the
1999-2000 cycle by Lockheed totaled more than $2.7 million, with
two-thirds going to Republicans, while Boeing gave $1.9 million to
candidates and parties with an even split between Republicans and
Democrats. Boeing also kicked in $100,000 to the Bush-Cheney inaugural
fund, while Lockheed gave $225,000. Lockheed also sweetened the deal by
playing up its Texas connection. Work will be done in 27 states and
Britain, with final assembly at Lockheed's Fort Worth plant, potentially
leading to 9,000 new jobs.
The Lockheed team had one other "inside connection" - Air Force
Secretary James Roche chose the winner. What's the big deal? Well,
before being appointed to Secretary of the Air Force, James Roche served
as corporate Vice President of Northrop Grumman and has worked for
Northrop since 1984. Maybe a conflict of interest? Northrop Grumman has
a significant role in the development of the JSF - three of its
operating sectors -- Integrated Systems, Electronic Systems and
Information Technology -- have been developing advanced technologies for
JSF in areas that include aircraft systems, stealth, sensors and
software engineering.
Gleeful and confident, Lockheed Martin Chairman Vance Coffman said his
company would build a "truly remarkable, capable and affordable
multi-role fighter, on schedule and on cost." However the General
Accounting Office (GAO) has warned numerous times that the jet is likely
to cost more, take longer to build and have performance problems. In
fact, the General Accounting Office released its' latest report on the
Joint Strike Fighter just weeks before the Pentagon made its decision.
The GAO report stated, "We disagree with DOD's assertion that technology
is mature enough to move forward. The technology readiness level
assessment conducted as part of our review of the JSF showed that
critical technologies are not projected to be matured to levels that
would stem risks at the start of engineering and manufacturing
development. Our previous work has shown that when programs proceed in
this fashion, they experience delays, rework, and substantial cost
increases that could force the Department to divert much-needed funds
from other important weapon system programs."
Michelle Ciarrocca is a
Research Associate at the
World Policy Institute
.
###