FIGHTER—Commercial Jets in Decline, Fighters Key for Contractor

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General Specifications, Joint Strike Fighter


Cost:

$30 million to $38 million


Weight:

28,000 to 31,000 pounds


Maximum speed:

1,100 mph


Maximum travel distance:

520 to 700 miles


Maximum munitions capacity:

14,000 to 20,000 lbs.


Other components:

Classified radar and sensors, as well as mounted internal 27-millimeter guns


Internal fuel capacity:

13,000 to 20,000 lbs.


Crew capacity:

1


Length:

46 to 51 feet


Wing span:

30 to 43 feet

*Design specifications vary for Air Force, Navy and Marines.

Source: Boeing Co. and Lockheed Martin Corp.

Things were remarkably upbeat last week at Moog Aircraft Group, considering the loss of a significant portion of its commercial airline business.

“If it weren’t for the diversity of our business, the mood would be much gloomier,” said Daniel Aynesworth, the plant’s manager.

A key player in the development of the next-generation jet fighter, Moog has been buoyed by the Pentagon’s sense of urgency following the attacks of Sept. 11.

As a result, the push for development of the Joint Strike Fighter may prove to be the financial savior of the manufacturer of mechanical components on jet wings.

“With the certain downturn on the commercial side and no prediction on when it’s going to bounce back up, the Joint Strike Fighter takes on a more important meaning for our employees,” Aynesworth said.

The Torrance subsidiary of East Aurora, N.Y.-based Moog Inc. stands to reel in “hundreds of millions of dollars” in subcontract work making mechanical systems for the next-generation attack plane. That’s a big deal for an operation that generates roughly $100 million in annual revenues.

Two teams are competing for the $300 billion JSF contract, for which Pentagon officials plan to award the engineering, manufacturing and development (EMD) contract late this month. Though there has been talk in Washington in the wake of the attacks of pushing the process forward by splitting the contract between competitors Lockheed Martin Corp. and Boeing Co., the plan remains for the winning team to be awarded the entire contract.


Subcontract work to flow

Lockheed and Boeing are vying to build 3,000 of the stealthy planes valued at between $30 million to $38 million each over a 30- to 40-year period. Moog is among dozens of Los Angeles aerospace firms that will garner a share of the more than $100 billion in subcontract work expected to flow into the region.

Yet while most of those firms face uncertainty while waiting to see if their team leader lands what could be the largest contract in military history, Moog is one of only a handful of local companies attached to both teams.

“Regardless of who wins, we’ll be in a good position,” said Aynesworth. “Joint Strike Fighter will be a major portion of our business for years to come. I certainly anticipate that the program will more than make up for any decline in commercial jet business in the long term. That means we’ll keep jobs in Torrance.”

The company will add some too about 150 to the existing 350 employees when the program begins full production, company officials estimated.

Moog officials would not say how much revenue it will see from the two primary contractors, but part of the company’s bid package for the JSF states its local operation would have a greater role if Boeing is picked.

The relationship with Boeing on the JSF is an extension of a long history on the commercial side: Moog makes devices that enhance lift capabilities at slow speeds for every model in Boeing’s commercial jet fleet except the 737.


Not vulnerable

That business is declining, however, in the face of stiff competition from Boeing rival Airbus and an industry-wide slowdown in commercial jet making following the terrorist attacks. Boeing recently announced it would reduce plane deliveries this year from the originally projected 538 to 500, with 2002 deliveries expected to drop to the low 400s.

“Moog is not as vulnerable to the downturn in the general (commercial) aviation market,” said Theresa Hitchens, a senior analyst at the Center for Defense Information, a non-partisan Washington think tank.

“They don’t have an issue in having to lay off certain portions of their workforce because their production process is relatively the same for military and commercial aircraft,” he said. “As you get lower down the chain, a lot of the parts they make are the same for military and commercial aircraft. (They are) protected.”

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