- The Washington Times - Tuesday, April 21, 2009

WASHINGTON (AP) - A top executive at Lockheed Martin Corp. indicated Tuesday that it has accepted the Pentagon’s proposal to cap production of the defense contractor’s F-22 fighter jet, the latest sign the job-heavy program may not be revived.

Defense Secretary Robert Gates has proposed that the Pentagon buy 187 of the planes, short of the 20 to 60 more that Lockheed and its supporters in Congress had hoped for. The Gates plan was endorsed last week by to Air Force officials, who previously pushed hard for many more of the technologically advanced but costly planes.

As lead contractor on the jets that cost $140 million each, Lockheed has warned in a public relations blitz that capping the F-22 could lead to up to 25,000 job losses at the company and other suppliers working on the program. The F-22 assembly line at Lockheed’s Marietta, Ga., aircraft plant likely will turn out the last plane in 2012 if Gates’ plan, which must be approved by Congress, goes into effect.

Lockheed Chief Financial Officer Bruce Tanner said in an investor call that the company has lobbied on the issue, but the Pentagon is “completely aligned on this matter from top to bottom.”

“We are disappointed by the decisions, but we will accept those and go on,” Tanner said.

Tanner’s statements came as Lockheed reported first-quarter earnings, which dipped nearly 9 percent on higher pension costs. Still, shares of Bethesda, Md.-based company added 31 cents to $76.04 Tuesday.

For Lockheed, Gates’ proposed budget for the upcoming fiscal year would have mixed results and could have a big impact on jobs at company plants in New York and Georgia.

Along with the F-22, the company would lose a big contract to build new helicopters for the president and the chance to bid for a long-delayed contract for helicopters designed to rescue downed pilots. But other Lockheed programs would receive boosts, including plans to accelerate the F-35 Joint Strike Fighter jet and buy more warships that can sail in shallow waters.

Tanner said potential job losses at Marietta, which employs about 2,000 workers, could be reduced by shifting workers to other aircraft projects at the plant, including the C-130J cargo plane. Some work on the F-35, now done primarily at Lockheed’s Fort Worth, Texas, factory, also could be shifted to Georgia.

A spokeswoman for Georgia Republican Sen. Saxby Chambliss said he would still push for 60 more F-22s despite gathering support for Gates’ plan.

Less clear is what would happen to Lockheed workers at the company’s helicopter facility in Owego, N.Y. Tanner said there were no other programs that could mitigate the potential loss of work on the presidential and rescue helicopters. Without those, there will likely be some “near term” reductions in the plant’s work force, he said.

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