Lockheed Martin funds in jeopardy Senate panel reduces money for F-22 fighter in work on budget bill; Defense contracts


WASHINGTON -- The Senate Armed Services Committee cut funding for Lockheed Martin Corp.'s F-22 fighter plane yesterday in work on the fiscal 1998 defense budget, Sen. Carl Levin said.

Levin, a Michigan Democrat and the ranking Democrat on the Armed Services Committee, told reporters the committee also approved funding the Clinton administration requested for McDonnell Douglas Corp.'s F/A-18E/F fighter, and moved to prohibit funding for additional Northrop Grumman Corp. B-2 bombers.

Finally, the committee approved a cooperative production arrangement for the U.S. Navy's newest submarines that General Dynamics Corp. and Newport News Shipbuilding Co. reached earlier this year.

Those decisions differ from those made by the House National Security Committee, which has its own version of the defense budget for the fiscal year starting Oct. 1. The committees' bills will be merged into a single piece of legislation later this year.

In total funding, the Senate and House bills are equal. Both include $268 billion, $2.9 billion more than the administration requested.

The Senate and House commit- tees both rejected the administration's request for permission to close more military bases. Levin said, however, that several senators will probably offer an amendment approving the request when the defense bill goes before the full Senate.

Overall, the bill the Armed Services Committee completed yesterday "does not make any major changes in direction" from the Pentagon's plans, Levin said.

The $420 million reduction in the administration's $2.1 billion request for Bethesda-based Lockheed Martin's F-22 came because "everybody wants to put pressure on the Air Force and the contractor to reduce costs," Levin said. The plane is assembled in Georgia, and Seattle's Boeing Co. is the primary subcontractor.

The House committee approved the administration's request.

If Congress eventually approves that reduction, "There would be schedule delays," Lockheed Martin spokesman Jeff Rhodes said. "It would have a very big effect to have that much money come out in a single year."

The F-22 is to be the Air Force's most advanced fighter. Lockheed Martin and the Air Force are negotiating an agreement that will have the company carry out production improvements aimed at limiting costs of development and production to $64.6 billion.

The Pentagon's recent review of future needs disrupted those talks. The $64.6 billion total is based on production of 438 planes. However, the review cut the F-22 to 339 planes.

That cut forced Lockheed Martin to recalculate the estimated total cost, a process James Blackwell Jr., president of Lockheed Martin's aeronautics division, said will take several months.

The committee also approved less money for Lockheed Martin's THAAD missile-defense system than the administration requested. It set aside $353.4 million for that system compared with the $556.1 million requested.

Lockheed Martin's stock rose 75 cents to $95.875 yesterday.

Pub Date: 6/14/97

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