- The Washington Times - Tuesday, January 8, 2002

FORT WORTH, Texas (AP) The new Joint Strike Fighter, which the U.S. military sees as its flying workhorse for decades to come, probably will have doors, cooling devices and other parts made abroad.
It's not that contractor Lockheed Martin can't find U.S. companies to manufacture the components. By giving work to companies from places such as Italy and the Netherlands, Lockheed, of Bethesda, Md., hopes to make those countries more keen to buy the jet itself at $40 million to $50 million each.
That kind of marketing is increasingly common today in building military jets and reflects both intense global competition and the potential for huge profits. Still, Lockheed may be taking the art to new levels.
The Joint Strike Fighter, or F-35, is expected to start rolling off assembly lines in six years and could be the last manned fighter aircraft. Lockheed expects to build 3,000 for the Navy, Marines and Air Force and for Britain over the next 40 to 50 years.
Pentagon officials have placed the value of the Joint Strike Fighter program, including incidentals, at $200 billion. But the value could soar with sales to other friendly nations. A Lockheed executive speaking to a group of technology analysts recently estimated $750 billion to $1 trillion.
To hit those lofty targets, however, Lockheed must outgun other new fighters such as the Gripen, built by Sweden's Saab and Britain's BAE Systems, the Rafale by France's Dassault Aviation, and the Eurofighter, built by a consortium of European manufacturers.
Countries such as the Netherlands and Italy are being pressured by neighbors to buy European-built planes instead of the F-35, which will be assembled at Lockheed Martin Aeronautics Co.'s Fort Worth plant.
The Dutch are believed to be close to deciding whether to invest $1 billion in helping build the F-35. Dutch officials visited Washington in mid-December to discuss a government-to-government deal, which is needed before foreign companies work on the plane.
In the negotiations, the U.S. government tries to protect technology secrets from foreign companies. Industry officials say Lockheed won't be allowed to share certain information about the plane's control system and stealth with subcontractors.
Foreign countries, however, are eager for their companies to learn the latest technology.
"If countries are going to put money into the program, they're going to have to go back to their parliaments and say, 'Here is what's in it for us in terms of work and technology,'" said Joel Johnson, international vice president for the Aerospace Industries Association.
Lockheed hopes for a payoff in sales.
"We certainly hope that after they make the investment in the JSF program, they will decide this is the plane they want to buy," said Dana Pierce, an international business development official for Lockheed.
But it has another reason for using foreign suppliers: Thrift.
Take, for example, two Dutch companies angling for F-35 work: Fokker Aerostructures, which makes doors and other plane parts; and Thales Nederland, which builds a variety of technology systems for planes and ships, including devices to cool sensors.
"With direct-country funding, they developed some leading-edge technology at very little cost and no cost to us," Miss Pierce said. "It was essentially funded by the Dutch government. It's really a model we'd like to see in other countries."
Getting a better deal on components helps Lockheed keep the price of the JSF near or lower than its competitors.
U.S. aerospace officials inside and out of Lockheed are confident the F-35 will be a better plane than its competitors. But Frank Cevasco, vice president of the defense consulting firm Hicks & Associates, said that since the Soviet Union collapsed, other countries feel less need to have the absolute best fighter jet.
Now, Mr. Cevasco said, those countries are influenced by domestic political factors such as winning subcontracting jobs for their workers. "Whether any of us like it or not, there are political imperatives to the purchasing countries having a piece of the action," he said.
U.S. labor unions have lobbied to limit "offsets," the subcontracting work or other incentives used to persuade other countries to buy U.S. goods.
"It's a serious threat to our industrial base, as we see more jobs and technology that we've developed with taxpayer money going offshore in these deals," said Owen Herrnstadt, a global-trade expert at the International Association of Machinists and Aerospace Workers.
The union wants companies to analyze the job effect of such deals, but a Clinton administration White House commission to study the issue met only once before disbanding.
The Joint Strike Fighter already has an international flavor. Britain invested about $2 billion in the plane's development. One of the two subassembly sites will be in Samlesbury, England, and Britain's Defense Ministry estimates that work on the plane will sustain 8,500 jobs.
BAE formerly British Aerospace is one of two major subcontractors on the F-35, and Rolls Royce PLC will supply engines.
Kathy Crawford, a Pentagon spokeswoman for the JSF program, said Italy and the Netherlands are negotiating to join at "Level II," paying about $1 billion each, and Canada, Turkey and the tandem of Norway and Denmark are negotiating to pay $200 million to $400 million as Level III partners. She said an announcement is expected this month.
Many of those countries already use and make parts for Lockheed's F-16 fighter jet, which the F-35 aims to replace. Some F-16 customers have opted not to get involved with the F-35.
Potential customers might still worry that the U.S. government could scrap the F-35. Lockheed hopes its selection to build the plane will assure nervous shoppers that the plane will be built.

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