For Congress, defence contracts are like baseball, apple pie

Sen. Orrin Hatch, R-Utah, released a video extolling the F-35’s “superior capabilities.” More than 70 of the aircraft are to be stationed at Hill Air Force Base in Hatch’s home state.

Lockheed Martin’s stock tumbled after Trump’s tweet, wiping out nearly $2 billion of the company’s market value. The company’s shares fell $6.42, or 2.5 per cent, to close at $253.11 Monday. The F-35 program made up 20 per cent of Lockheed’s total 2015 revenue of $46.1 billion. U.S. government orders made up 78 per cent of its revenue last year.

“Whoever has this airplane will have the most advanced air force in the world. That’s why we’re building the F-35. That’s why it’s important to not only the U.S., our partners and our partners like the Israeli Air force to have this airplane,” said Jeff Babione, general manager of the F-35 program at Lockheed Martin, at a base in Israel.

Israel and several other U.S. allies are also buying the F-35, expanding the program’s international footprint. Defence Secretary Ash Carter visited Israel on Monday as the Jewish state received the first two next-generation F-35 fighter jets that will help preserve the country’s military edge in the volatile Mideast.

The F-35, which uses stealth technology to avoid radar detection, is being built in different configurations for the Air Force, Navy and Marine Corps. The Navy’s version, for example, is designed to take off and land on an aircraft carrier.

Current plans call for the United States to buy nearly 2,500 F-35s. Close to $13 billion will be needed annually between 2016 and 2038 to hit that procurement number, according to the Government Accountability Office.

While the F-35 had massive budget overruns early on, the cost has stabilized and even dropped a bit following tough negotiations between the Pentagon and Lockheed Martin, according to Todd Harrison, a defence budget expert at the Center for Strategic and International Studies.

“Trump is unlikely to squeeze more blood out of this rock,” Harrison said.

Lockheed said that it has worked to lower the price of the F-35 by 60 per cent and expected the aircraft to cost $85 million each in 2019 and 2020. But the company’s estimate appears to omit the price of the engine and the cost of development. When those elements are added in, the cost per F-35 in current-year dollars is closer to $138 million, according to Harrison.

Companies from 45 states are involved in the F-35’s production, with Texas, Georgia, California, Arizona and Florida playing the leading roles in testing and manufacturing the jet fighter. The company is teamed with more than 1,250 domestic suppliers to produce thousands of components ranging from highly sophisticated radar sensors to parts of the aircraft’s fuselage, according to Lockheed Martin.

Overall, the F-35 program is responsible for more than 146,000 U.S. jobs, the company said.

The Lockheed Martin plant where the F-35 is being built is located in Texas Republican Rep. Kay Granger’s district. She’s vice chair of the defence appropriations subcommittee. In a statement Monday, Granger hailed the F-35 delivery to Israel, calling the aircraft “what we need to keep our two countries safe in these dangerous times.”

Rep. Mac Thornberry, the Republican chairman of the House Armed Services Committee, represents the district next to Granger’s. Thornberry’s committee has supported buying more F-35s than the Obama administration had asked for in its budget request. The F-35 will replace an aging inventory of U.S. aircraft that many lawmakers believe are becoming increasingly unsafe to fly.

Claude Chafin, a committee spokesman, said Thornberry “shares the president-elect’s determination to have the Pentagon get weapons in the hands of our troops faster, while being better stewards of the taxpayer dollar.”

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Follow Richard Lardner on Twitter at http://twitter.com/rplardner

Richard Lardner, The Associated Press

by Canadian Press

For Congress, defence contracts are like baseball, apple pie

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