Bloomberg News
2008-01-16 22:44 (New York)

Pentagon Will Keep Lockheed Martin F-22 Production Line Open

By Tony Capaccio

The Pentagon has decided to extend Lockheed Martin Corp.'s F-22
stealth fighter production line beyond 2011 when the last aircraft
under a current three-year contract are delivered, according to a
document and spokesman.

The Pentagon will ask for four additional aircraft in the fiscal
2009 Iraq war budget request on top of 20 in next year's annual
defense budget that were already planned, said Pentagon spokesman
Geoff Morrell.

The Pentagon decision is a victory for Lockheed Martin, the
world's No. 1 defense contractor by sales, the U.S. Air Force and
lawmakers from states with F-22 subcontractors or depots who want
Defense Secretary Robert Gates to keep production open.

The combined 24 will allow Lockheed Martin to keep its Marietta,
Georgia, production line beyond 2011. The Pentagon is not committing
to any hard numbers of additional aircraft, Morrell said in a
telephone interview.

``The plan is to keep the line open for now but there is no
expectation at this time that we will buy any additional aircraft
beyond the four,'' Morrell said.

The action will be reflected in the Pentagon's fiscal 2009 war
cost bill due to be submitted after the formal annual budget is
released February 4.

The Pentagon's decision reverses one made last month by its
Comptroller Tina Jonas that told the Air Force to prepare in its
fiscal 2010 budget for a shutdown the following year.

Lockheed is under contract to deliver in 2011 the last of the 183
F-22s ordered. The Air Force wants 381, more than twice as many.

Most Expensive

The F-22 is the most expensive fighter ever. Adjusted for
inflation, each costs $195 million to build, according to Pentagon
figures. When research and development costs are included, the
inflation-adjusted price is $354 million apiece.

Deputy Defense Secretary Gordon England in a January 14 Letter to
Representative Philip Gingrey of Georgia, who Represents Lockheed
Martin workers, said the Department still opposes going much beyond
183 aircraft.

The Pentagon's evaluations show that continuing purchases of the
Joint Strike Fighter for the Air Force, Navy, Marines and
international partners including the U.K.'s Royal Navy and Australia
``provides more effective'' combat capability than ``concentrating
investments in a single service by buying more F-22s,'' England wrote
in a letter obtained by Bloomberg News.

Still, ``the Department is planning to keep the line open''
through the purchase of F-22s as replacement aircraft for jets lost
over Iraq and Afghanistan, England wrote .
Lockheed Martin is the prime contractor on the JSF program, with
subcontractors Northrop Grumman Corp. and BAE Systems Plc.

Gates during a Jan. 10 news conference disclosed that he was
meeting with officials that day to discuss the F-22's future in the
aftermath of the Air Force keeping grounded for potential structural
cracks 183 of 442 of its top-line Boeing Co. F-15 fighter
interceptors.

The F-22 was designed to replace the F-15, which flies air
intercept missions over the U.S.

Morrell said he didn't know what impact the F-15 situation had on
the Pentagon's decision to keep the line open.