Staff Reporter

If the next-generation Joint Strike Fighter jets were built in Los Angeles County, it would not only add 40,000 jobs to California's aerospace industry, it would also save the federal government $2.2 billion.

At least that's the argument a group of local officials made during a trip last week to Washington. There, armed with a study detailing the cost savings, officials were hoping to convince the California congressional delegation that their state would be the least expensive place in the United States to build the next-generation fighter jet.

They are hoping to spur members of California's congressional delegation to lobby the U.S. Department of Defense which is funding development and construction of the fighter for the Navy, Air Force and Marines to do its own study of the cost of building the plane in various locations.

"If they do that, they'll see California is the location they should be at," said Lon Hatamiya, secretary of the state's Trade and Commerce Agency.

The stakes are high for bringing Joint Strike Fighter production work to Plant 42 in Palmdale, where both Boeing Co. and Lockheed Martin Corp. are building prototypes. The two aerospace giants are competing for a contract to build the plane, which is expected to be used by the U.S. military, as well as the United Kingdom's Royal Navy and Royal Air Force, for at least the first half of the 21st century.

The work is expected to create 10,000 jobs for whichever company wins the contract, as well as an additional 30,000 jobs among the subcontractors. The contract is valued at $750 billion, with an anticipated 70 percent of that amount being passed on to suppliers.

Although California's subcontractors are likely to get some of that work, whether or not final assembly of the Joint Strike Fighter is performed here, they will receive a much larger portion if the fighter is built close to their own facilities. That would shorten delivery times for parts and decrease the cost of shipping them.

And if final assembly of the jet is done at Plant 42, it would help offset the job losses that will come to the plant as production of Northrop Grumman Corp.'s B-2 stealth bomber comes to an end at the facility.

But the group that went on last week's trip including Hatamiya, economic development officials, local union representatives and Palmdale city officials face some serious challenges.

Chief among them is the fact that officials of both Seattle-based Boeing and Bethesda, Md.-based Lockheed, have said they would likely build the jet out of state if given the contract.

Lockheed has said that it expects to build the jets in Fort Worth, Texas, where it currently builds one class of fighter jets and part of another one.

"Preliminarily, we've made that decision (to build the Joint Strike Fighter in Texas) based on the fighter production line we already have in place, where we're producing the F-16 and part of the F-22," said Carolyn Hodge, a Lockheed spokeswoman.

Boeing has said it would build the jet at its facilities in St. Louis, home to a variety of aircraft and missile programs, including the F/A-18, the F-15 Eagle and the T-45 Goshawk trainer.

"It's a purely business-based decision where we have the facilities, where we have the most favorable labor base and rates and then, of course, where we have in place the best agreements with state and local government," said Dennis Kline, a Boeing spokesman. "It's a many-dimensional consideration."

But Hodge and Kline said those decisions would be reevaluated once the prime contractor is selected, most likely in 2001. "If someone comes up with compelling facts to sway a decision either way, sure it would be looked at," Hodge agreed.

Undertaking such an independent cost-comparison study among St. Louis, Fort Worth, Palmdale, and possibly other sites would likely be left to the Defense Department. And there is no guarantee such a study would be done.

U.S. Rep. Howard P. "Buck" McKeon, R-Santa Clarita, whose district includes Palmdale, said he knows of no precedent for the Defense Department doing such a study upon the request of a state congressional delegation.

But McKeon said that, given the findings of a study commissioned by the California Trade and Commerce Agency and the city of Palmdale and prepared by Arlington, Va.-based SDS International, it makes sense to ask for such a review. The SDS study found that given available tax credits, incentives and the facilities already at Plant 42 the U.S. government would save $2.2 billion (roughly the cost of 55 Joint Strike Fighters) if the plane were built in Palmdale.

"What we're asking is that they look at the cost do an analysis," McKeon said. "There will be different things that are taken into account the quality of the plane, the cost of the plane and all we're saying is, let's not throw away a couple of billion dollars because (Boeing and Lockheed) want to built it somewhere else."

While the decision on which contractor will build is still two years away, and production may not begin for another five or six years after that, local officials say now is the time to start pushing the Defense Department to do a cost-comparison study.

"I think it's time for us to take a very proactive stance to attract this project to California," said Hatamiya.

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