By Bryan Corliss
Herald Writer
The Pentagon chose Lockheed Martin Corp. over the Boeing Co. on Friday to build its Joint Strike Fighter jet, a contract that could be worth $200 billion or more, the largest in Defense Department history.
As a result, Boeing faces the prospect of more layoffs.
Air Force Secretary James Roche announced that Lockheed and its partners had won a $25 billion engineering and manufacturing development contract that eventually is expected to lead to the go-ahead to build 3,000 supersonic F-35 jets that can land vertically.
Roche wouldn’t release details of why Lockheed was chosen, but said during the review process that its prototype had the best performance.
The decision means some 3,000 Boeing jobs won’t be added to the Puget Sound area. And some 300 Seattle-area engineers who worked on the project for Boeing will now have to be reassigned, some as soon as this weekend, added Jerry Daniels, the chief of Boeing’s military aircraft and missiles division.
"You’re all aware of the painful process we’re going through in the Puget Sound,” Daniels said via satellite from Washington, D.C. “I can’t say there won’t be more layoffs,” he added.
The F-35 will replace the aging fighter jets of the Air Force, Navy and Marines, albeit with modifications to fit the needs of each branch. It also will be used by Britain’s Royal Air Force and Navy, which want 150 of the planes.
The plane is designed to replace the Air Force’s F-16 and A-10, the Navy’s F/A-18 and the Marine Corps’ AV-8B Harrier.
Boeing’s test model, dubbed the X-32, is more compact than Lockheed’s X-35. The X-32 has a gaping air intake on the front and dual lift nozzles underneath, while the X-35 achieves its short takeoffs and vertical landings with a single thruster and a lift fan at the top of the plane.
Whether Boeing gets any piece of the contract is up to Lockheed Martin, Boeing chairman Phil Condit said Friday.
Boeing is "looking forward to the possibility of bringing our capabilities and skills to the Lockheed Martin JSF team," Condit said. Boeing and Lockheed have worked together on jets in the past and could do it now, "if they chose to do so."
Lockheed and Boeing waged a long and costly advertising and lobbying campaign for the contract, which establishes Lockheed as the nation’s sole fighter jet manufacturer.
Lockheed, based in Bethesda, Md., has said the contract would add up to 9,000 jobs at its Lockheed Martin Aeronautics division in Fort Worth, Texas, which now employs 11,000.
Losing the contract won’t devastate Boeing, Daniels said. "Nothing earth-shattering is going to happen in the next 24 hours, seven weeks, nothing."
But it is a blow to the company. It will lower revenues by $1 billion for 2002, Condit said. Profits and profit margins won’t be affected, he added.
In the past week, there has been speculation that the losing contractor in the competition still would get a piece of the action — either as a subcontractor building parts for the jet or through a congressional mandate that construction of the jets be split.
"If there’s a meaningful role for us on JSF, we’d be deeply interested in that," Condit said.
Lockheed will develop the jet with Northrop Grumman Corp. and BAE Systems of Great Britain. Work will be done at facilities in 27 states and Great Britain, with major subassemblies in El Segundo, Calif., and Samlesbury, England, and final assembly at Fort Worth.
Sen. Kit Bond, R-Mo., said the Pentagon was wrong to place the future of America’s air defenses with just one company. Bond said he may offer legislation that would require the military to split production between the companies to keep Boeing in the fighter business.
"It would be a national security disaster if we allowed that repository of unique engineering know-how to be scattered to the four winds," Bond said.
Even if there isn’t a significant role for Boeing, Condit said Boeing’s work on its Joint Strike Fighter prototype was a "strategic investment" in the company. New design and manufacturing procedures allowed the company to cut in half both the hours and the number of parts needed to build the prototype.
"Those are valuable lessons in any production program," Condit said. They will be "applied everywhere inside Boeing, to design better products and lower costs."
Condit said he is optimistic Boeing will get a contract to start building 767s to replace the U.S. Air Force’s current fleet of KC-135 refueling tankers, which are based on 40-year-old 707 bodies.
"The issue is more one of timing," he said, since the tanker fleet is wearing out and must be replaced eventually.
"We’ve got a great platform," Condit said. "The (Everett-built 767) can do that job extremely well."
Boeing is in active discussion with Congress and the military about the idea. "I’m relatively optimistic that it can move forward in the near term," he said.
The Associated Press contributed to this story.
You can call Herald Writer Bryan Corliss at 425-339-3454
or send e-mail to corliss@heraldnet.com.
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