The F-35 joint strike fighter (JSF) programme emerged as one of the major winners from the Pentagon’s proposed budget for fiscal year 2010, unveiled by Defense Secretary Robert Gates on 6 April. Previous speculation said that the axe would fall on either the F-35 programme, led by Lockheed Martin, or the USAF’s other flagship fighter, the F-22 Raptor, also Lockheed led.

Gates said that production of the F-22, which entered service in 2005 and is regarded by some observers as the best aircraft ever deployed by the USAF, would be halted at 187. Meanwhile, he wants to increase production of the F-35. If his proposals were to be implemented, the US would build around 2,443 JSFs, at a cost of $1tn to manufacture and maintain.

The Pentagon’s 2010 budget is just a proposal, however, and will still need the approval of President Barack Obama and the US Congress – where lawmakers are expected to fight strenuously to preserve the jobs of their voters.

“Lawmakers are expected to fight strenuously to preserve the jobs of their voters.”

USAF shifts to face new threats

Economics has clearly played a big role in Gates’s calculations. Production costs of the F-22 amounted to around $140m a plane prior to Gates’s call for a halt in production, while the figure for the JSF is a somewhat lower $85m. In addition, unit costs for the Raptor have risen to a staggering $340m since production was curtailed.

The budget also clearly represents, however, a fundamental shift in US military priorities away from fighting the conventional wars that characterised the Cold War and the requirement for the F-22, which was conceived in the early 1980s. The focus now is on facing the new threats to the US from insurgents and terrorists in countries such as Iraq and Afghanistan.

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“This is a reform budget, reflecting lessons learned in Iraq and Afghanistan, yet also addressing the range of other potential threats around the world, now and in the future,” Gates said. He previously observed that the Raptor hadn’t been used in either Iraq or Afghanistan.

Where the Raptor is concerned, it is certainly difficult to discern any real need such an air superiority fighter after a quick analysis of other superpowers’ activities. For example, Russia has its own economic woes. West German Chancellor Helmut Schmidt scathingly described the former Soviet Union of the 1980s as ‘Upper Volta with missiles’, and the description still holds true for Russia today, with one important proviso. The missiles are now rusting in their silos. Certainly, the military threat posed by Moscow is very much reduced from that of the 1960s or 1970s.

Meanwhile, China is rapidly building up its military forces but is unlikely to be able to challenge the USA for another two decades, by which time the Raptor will long have been rendered obsolete.

Furthermore, whereas sales of the F-35 to friendly foreign powers can partly offset the cost of building the aircraft, the technology involved in the Raptor is so advanced that Federal law bans the aircraft’s export.

Immediately following Gates’s press conference announcing the 2010 budget proposals, Lockheed Martin warned of huge layoffs if the Raptor programme were to end. This may be true but according to a number of analysts, Lockheed Martin fared best among defence and aerospace companies from the Defense Department’s rearranged spending. And, investors appeared to agree with the analysts. Lockheed Martin’s share price rose following the budget proposals, while that of Boeing and other major defence contractors fell.

Winners and losers

Increased production of the JSF will more than compensate for any loss of earnings that Lockheed Martin suffers as a result of halting the Raptor programme. A planned increase in spending on littoral combat ships will also benefit the company. Northrop Grumman, a principal subcontractor in the production of the JSF, is another major beneficiary.

“Costs for the
F-22 Raptor have risen to $340m since production was curtailed.”

Lockheed Martin should also be able to call on significant support in Congress for the JSF. The company has cleverly spread F-22-related jobs around 46 states, winning the company praise from politicians across the US.

It is Boeing, however, that stands to be the main loser of the defence budget proposals. Gates’s plan to end production of the C-17 military transport aircraft and to scale back the army’s future combat systems programme proved negative for the company. Proposed cuts in missile-defence programmes will also greatly scale back Boeing’s airborne-laser programme. And, Boeing builds the F-22’s wings and aft fuselage in Seattle, employing almost 1,200 people.

Yet it is important to note that the defence budget proposals for 2010 will result in an increase in military spending of 4% to $534bn, plus $130bn for the wars in Iraq and Afghanistan. Not bad when so many other industries now face steep drops in demand.