With the Pentagon expecting to choose a contractor this fall for the Joint Strike Fighter, the largest military program in history, Los Angeles County is poised to get more than $100 billion in subcontract work, regardless of which of the two teams is awarded the winner-take-all contract.
The JSF, a next-generation attack plane, would be the heart of the country's air defenses, serving as a complement to the Navy's F/A-18 Super Hornet and replacing the Air Force's F-16 Falcon and the Marines' AV-8 Harrier, as well as the U.K.'s Sea Harrier.
"As (the JSF program) builds up, there will be increasing activity in the subcontractor plants. It certainly could be a bonanza," said Paul Nisbet, a partner in JSA Research Inc., a Newport, R.I. defense analyst firm. "The whole defense and aerospace industry in Los Angeles has been moribund under the Clinton administration. Now (the JSF work) will keep the aerospace industry growing."
While Northrop Grumman Corp. and Raytheon Co., the two major local subcontractors, could see billions from the contract, the program also will bring hundreds of millions of dollars to smaller subcontractors. In fact, smaller local subcontractors are virtually guaranteed years of revenues since many of them perform work for both teams competing for the overall $300 billion contract.
Pentagon officials said the prime contractor that wins the engineering and manufacturing development (EMD) contract Northrop's leader Lockheed Martin Corp. or Raytheon's leader Boeing Co. would be guaranteed the full production contract for building about 3,000 planes costing $30 million to $38 million each over a 30- to 40-year period.
Although Defense Secretary Donald Rumsfeld has yet to complete his review of Pentagon spending priorities, Under Secretary of Defense Pete Aldridge stated late last month on his official Web site that plans for the JSF are moving forward.
"Both airplanes... are performing exceptionally well," he said of recent tests of the Lockheed and Boeing prototypes. "The cost of the program looks OK. The schedule of the program still looks OK. So right now, we're heading towards the plan that we've laid out for ourselves, and that's to select the winner-take-all on the first of October."
Although the EMD phase is expected to take 10 years to complete, light production could begin in 2004, with the first deliveries made in 2008, officials said.Plane recipients
The overall program calls for construction of 1,763 of the stealthy jet fighters for the U.S. Air Force, 609 of them for the U.S. Marines, 480 for the U.S. Navy and a combined 150 for the United Kingdom's Royal Air Force and Royal Navy.
Hundreds of billions of dollars more are expected to be generated through the sale of planes to countries other than England, but officials could not offer an estimate, saying costs could fluctuate significantly.
For the 3,000-plus U.S. and British JSF planes, the El Segundo operations of both Raytheon and Northrop are each in line to receive 15 percent of the overall project cost approximately $45 billion should their team get the contract, officials of both companies said.
Northrop would assemble the center fuselage portion of the plane, while Raytheon would manufacture the airborne avionics, which include the radar, missile threat detection, infrared target and laser designation systems, as well as the computer that maintains all of those systems.
"This is big bucks," said Mark Day, a Raytheon spokesman. "This is billions for Raytheon down the road. This would be one of the largest programs Raytheon has ever been involved in."
Neither company could predict how many more jobs would be created by the JSF production contract.Other beneficiaries
Two Torrance-based subcontractors Moog Inc. and Honeywell Engines and Systems also are poised to see major revenue streams when the program is funded because they have secured commitments with both competitors for the contract.
Moog, which would design and manufacture flight control systems for each team, stands to earn "hundreds of millions of dollars" from production work that would create as many as 200 jobs, according to Dan Aynesworth, the company's general manager.
For Lockheed, Moog would also make the wing fold control system, and for Boeing, it would create the weapons bay door drive system, a device to regulate the engine air intake and a system that controls the direction of the nozzles from which exhaust escapes during short takeoff and vertical landing.
Honeywell Engines and Systems would manufacture the environmental control system air conditioning, heating and a thermal management system to protect radar systems for either project leader.
Although Weber Metals Inc. of Paramount is currently slated to manufacture aluminum airframe parts for the Lockheed team, company officials hope they can secure business for Boeing's team if that defense giant gets the contract. Weber employs about 170 people in its metal shop, all of whom work on every project that the company secures.
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