Lockheed, Boeing win next century fighter bid

Electronic News, Nov 25, 1996

Washington, D.C.--McDonnell Douglas, the world's largest supplier of military aircraft and manufacturer of the F/A-18 for the U.S. Navy, will not be participating in the multiservice Joint Strike Fighter (JSF) program, potentially one of the largest military aircraft procurements in history.

The giant defense contractor was passed over by the Pentagon in favor of Lockheed Martin, which makes the F-16 fighter, and Boeing, which hasn't built a fighter since the 1930s.

McDonnell Douglas may still have a chance at getting in on the JSF program, however. The company has been merger-minded in recent months, especially since settling a strike with its machinists, and was known to have engaged in merger discussions with Raytheon earlier this year. Boeing agreed earlier this year to acquire the aerospace and military electronics businesses of Rockwell International, and may be open to talks with McDonnell Douglas.

The Naval Air Systems Command is taking the contracting lead on the JSF program, awarding a $661.8 million cost-plus-fixed-fee contract to Boeing and a $718.8 million cost-plus-fixed-fee contract to Lockheed Martin for the JSF's Concept Demonstration Program. The contracting teams are each expected to receive about $1.1 billion in funding over the next four years to develop prototypes of their JSF designs, after which the Pentagon will choose one design for production.

The Joint Strike Fighter will be used by the U.S. Air Force, Navy and Marine Corps, along with the U.K.'s Royal Navy. The Air Force will use it to replace the F-16 and A-10 aircraft, and to complement the F-22 Advanced Tactical Fighter (ATF), now being built by Lockheed Martin and Boeing. The U.S. Navy plans to implement the JSF to complement the F/A-18E/F. The Marine Corps will use the fighter as a short-takeoff and vertical landing aircraft to replace the AV-8B and F/A-18A/C/D. The Royal Navy plans to replace its Sea Harrier aircraft with the proposed fighter.

The American military plans to buy about 3,000 of the fighters. With the Pentagon looking for the two contractors to hold down the price of the plane to about $30 million apiece, the Department of Defense procurement will be worth $90 billion or more. With sales to the Royal Navy and other overseas armed forces, the potential value of the contract soars to more than $200 billion.

The Pentagon is scheduled to make its decision on which JSF design will fly in 2001, and first deliveries of operational aircraft are scheduled for 2008.

Flight testing will be carried out at the Air Force Flight Test Center, Edwards Air Force Base, Calif., and the Naval Air Warfare Center, Aircraft Division, Patuxent River, Md.

Boeing had approximately 300 people working on the JSF program and will increase the JSF workforce to more than 1,000 during the Concept Demonstration Program.

"This is a great day for the Boeing company," said Boeing Defense & Space group president Jerry King. "JSF is driven by the critical need to give our armed forces the airplane they will need--but to do so at a cost the country can afford."

Boeing is providing avionics and automated test equipment for the F-22 ATF program, for which Lockheed Martin is the prime contractor. The JSF represents the Seattle company's first real shot at building a military fighter in six decades.

Lockheed Martin Tactical Aircraft Systems, Fort Worth, Texas, leads the Lockheed Martin team. Two demonstrator aircraft will be built at the Skunk Works in Palmdale, Calif., using that facility's rapid prototyping capabilities. Lockheed Martin Aeronautical Systems, Marietta, Ga., will provide technology and lessons learned from the F-22 program.

Norman R. Augustine, vice chairman and CEO of Lockheed Martin, said, "This program provides an unprecedented opportunity for Lockheed Martin to demonstrate the complementary capabilities of companies located within the Aeronautics sector and many other parts of our organization. We will also apply benefits available through partnerships with other companies outside our corporation."