Fort Worth company gets biggest military contract in history
Made in Texas
The F-35 Joint Strike Fighter (JSF) will be one of the most sophisticated and deadly objects ever devised by man. It's designed to be the most versatile and cost-effective plane in the American arsenal. Department of Defense officials say it may be the last fighter plane America ever builds. And it's going to be made in Texas.
On October 26, employees of Lockheed Martin Aerospace and economic development officials throughout North Texas were thrilled to learn that the Fort Worth-based company had been selected to receive an $18.9 billion contract for "system development and demonstration" of the F-35. This eight-year developmental stage will almost certainly lead to Lockheed's acquisition of the largest military contract in history--an order for the production of more than 3,000 F-35s, with a price tag that may ultimately top $200 billion.
The October contract announcement was the culmination of a five-year, billion-dollar-plus competition that pitted Lockheed Martin against the nation's other manufacturer of fighter aircraft, Boeing. Lockheed Martin's victory should guarantee the financial health of its Fort Worth facility for decades and provide a major boost to the area's economy, creating an estimated 32,000 jobs during the fighter's production.
The F-35 contract represents an unprecedented joint buy from the U.S. and British armed forces, an arrangement intended to slash the costs involved in separate weapons development programs by each branch of service. The plane will replace a variety of aging aircraft, including Lockheed's own F-16, earlier models of the Air Force's F/A-18, the A-10 Warthog ground attack craft and the Harrier "jump jets" used by the U.S. Marines and Britain's Royal Air Force and Navy.
Cost-effectiveness is a major goal of the F-35 program. Its estimated cost of $36 million to $40 million per unit is remarkably low, at least by the standards applied to cutting-edge aircraft. By contrast, the Air Force's new air superiority fighter, Lockheed's F-22 Raptor, comes with a $200 million price tag. The F-35 also will require less maintenance and support than today's aircraft, cutting in half its ownership costs over time.
Yet the JSF will be anything but cut-rate in performance. The supersonic plane will be "stealthy," almost invisible to modern-day radar. As a pure fighter, it should be the equal of any plane flying except its big brother, the F-22; its state-of-the-art avionics systems will mesh pilot and machine to a degree that would have been considered pure science fiction only a few years ago. As the "strike" in its name denotes, the airplane also will be able to attack ground targets with lethal effectiveness.
The F-35 will be built in three variants to serve the individual needs of its customers. The U.S. Air Force will receive the "standard" model, while the Navy versions will feature a more rugged airframe and larger wing surfaces to help it cope with carrier takeoffs and landings. The version purchased by the U.S. Marines and the United Kingdom will be capable of short takeoffs and vertical landings, like the Harriers it will replace. As another economy measure, a majority of their parts will be identical and interchangeable, reducing production costs. The plane's flexibility will grow over its anticipated 30-year production cycle.
"We're building in the fact that we can allow for new requirements over time, such as future weapons," says John Smith, communications manager for the JSF program. "For instance, [the jump jet's] lift fan motor could also be used to power new weapons, such as directed energy beams." The Air Force intends to purchase 1,763 F-35s. The Marines want 609 jump-jet versions, while the Navy will buy 480 planes. The United Kingdom, which has contributed an initial $2 billion toward the JSF program, will acquire 90 for the Royal Air Force and another 60 for the Royal Navy, making a total of 3,002 planes.
This order, worth an estimated $200 billion, will represent only a portion of the market for the F-35. At least eight other foreign nations already have expressed interest in purchasing JSFs. When foreign sales and continuing maintenance contracts are taken into account, Smith says that total sales worth $1 trillion to the planes' makers, subcontractors and suppliers are not out of the realm of possibility.
A Texas bonanza
The financial benefits of the JSF program will affect communities throughout the U.S. Lockheed Martin is partnering with at least 70 suppliers, subcontractors and sub-subcontractors to create the F-35. Final assembly, however, will take place at the company's 59-year-old Fort Worth plant, which once turned out B-24 Liberators to fight the Axis in World War II.
The plant, which Fort Worth Mayor Kenneth Barr has called "the backbone of our economy," faced an uncertain future, since its production of the company's F-16 fighter is expected to wind down by 2010. Now its health seems assured for decades, possibly as long as 50 years.
Additional hiring has already begun, as Lockheed geared up for the system development and demonstration phase, which ran through 2001. The goal of this phase is to produce 22 F-35s for testing, including 14 flight-capable prototypes and eight planes for various ground-based tests. In addition, the plant will prepare for limited production in 2008.
Lockheed's Fort Worth facility employs more than 10,000 area residents. According to Smith, the JSF will produce a net increase of about 2,500 jobs at Lockheed Martin, with the majority of them in Fort Worth. In addition, BAE Systems, a British partner on the JSF project, will hire an additional 200 workers in the area.
An economic boom
But the economic impact of the contract will extend far beyond these jobs. The Fort Worth Chamber of Commerce has taken a keen interest in the JSF project. According to the chamber's vice president of economic development, Mike Rosa, "The dollars are huge. We're talking about a lot of dollars that can be dispersed throughout the Fort Worth economy and the state of Texas. And it's very stable. A contract like this has a lot of credence for investors and those looking to borrow money to establish retail [businesses] and housing."
The Fort Worth Chamber recently commissioned a study by the Perryman Group, a Waco-based economic analysis company, to study the indirect effects of the F-35 in Texas. The Perryman Group reports that initial construction and related activity tied to the JSF project will involve $50.8 million in total spending and $6.6 million in retail sales, generate $16.7 million in personal income and add $25.3 million to Texas' gross state product (GSP).
The system development and demonstration phase should produce annual gains of more than $1.2 billion in spending and $117.8 million in retail sales, while adding $508.2 million in annual personal income and raising the GSP by $689.7 million. Perryman estimates this phase will directly and indirectly lead to the creation of more than 8,300 jobs in Texas and generate $24 million annually in additional revenue to state government.
During the 30-year production phase that should begin in 2008, Perryman anticipates the F-35 will generate nearly $4.2 billion in total spending each year, including $367.9 million in retail sales. Personal income should rise by $1.3 billion annually, while GSP will benefit by an additional $1.7 billion. State coffers will receive an additional $73.9 million each year.
During production, Perryman estimates that the JSF will create more than 23,600 jobs in Texas, bringing total employment due to the project up to nearly 32,000. The Perryman Group believes that the total economic effects of the JSF in Texas will exceed the impact of the seven largest microelectronics facilities established in the state since 1990.
The last fighter?
The JSF project may achieve another distinction: in addition to being the largest contract of its kind ever, it may also be the last of its kind, according to Edward Aldridge, undersecretary of Defense for Acquisitions, Technology and Logistics.
"When you get to the period of 2025 or 2040, it's not clear that manned aircraft competition will exist at all," Aldridge says.
After the JSF, the future of airborne combat may lie with remotely controlled aircraft, cumbersomely called Uninhabited Combat Air Vehicles (UCAVs) by the military. UCAVs will be cheaper, more highly maneuverable and, obviously, safer for American personnel. But if the future belongs to robot fighters, Texas companies will undoubtedly play a part in building them.
"There's lots of road to travel between here and there," says Lockheed's Smith. "The longevity of this organization is a testament to its ability to think toward the future. If UCAVs come, we'll be the company that will come up with them."