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Lockheed Martin Wins Joint Strike Fighter Contract

Aired October 26, 2001 - 16:31   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JUDY WOODRUFF, CNN ANCHOR: I'm going to interrupt to take us to the Pentagon, where they're announcing the awarding of a huge contract to build joint strike fighter aircraft.

(JOINED IN PROGRESS)

UNIDENTIFIED MALE: ... and to make that announcement is the undersecretary of defense for acquisitions technology and logistics. Sir, you're up.

EDWARD ALDRIDGE, U.S. UNDERSECRETARY OF DEFENSE FOR ACQUISITION: Good afternoon.

We're here today to announce two important decisions on the largest acquisition program in the history of the Department of Defense: the Joint Strike Fighter. The value of the program, depending on the degree of international cooperation and participation, will be -- could be in excess of $200 billion.

I have with me today three key customers of the Joint Strike Fighter: the secretary of the Navy, Gordon England; the secretary of the Air Force, Jim Roche; and from the United Kingdom, the minister of defense procurement, Lord Willy Bach and the national armaments director and the chief of defense procurement, Sir Robert Wormsley.

Also with me today is the Joint Strike Fighter program manager, Major General Mike Hough, who is over at the side; and the deputy program manager, Brigadier General Jack Hudson.

The Joint Strike Fighter is a family of highly common, lethal, survivable, supportable and affordable next-generation multi-roled strike fighter aircraft.

There are three variants: one for conventional takeoff and landing applied to the Air Force mission; a carrier deck-compatible variant for the Navy; and a short takeoff and vertical landing, STOVL, variant for the Marine Corps and the United Kingdom.

This family of aircraft will replace the aging fleet of Air Force A-10s and F-16s, the early model Navy FA-18s, and the Marine Corps AV- 8Bs. The United Kingdom is a major partner in the development and there is additional strong international interest in the program.

Two contractor teams, one led by Lockheed Martin and the other led by Boeing, have just completed a concept development phase that demonstrated the design validity and the flight performance of the three aircraft variants. Both contractor teams met or exceeded the performance objectives established for the aircraft and have met the established criteria and technical maturity for entering the next phase of the program: systems development and demonstration.

Advanced aircraft design knowledge, improved engine performance, lighter-weight materials, and computer-aided design capability have permitted both contractors to build and fly a highly common airframe that meets the multiple needs of the military and potential international partners.

The Joint Strike Fighter will be the world's premier strike platform beginning in 2008, and lasting through 2040. It will provide an air-to-air capability second only to the F-22 air superiority fighter. The Joint Strike Fighter will allow for migration by U.S. forces to an almost all-stealth fighter force by 2025. For the Navy and Marine Corps, the Joint Strike Fighter represents their first deployment of an all-aspect stealth platform.

There will be a package of information available describing the JSF available to you, and describing its capabilities and variants we intend to develop. And I will not go over that detail this afternoon.

This week, on Wednesday, October 24, 2001, the Defense Acquisition Board met to review the status of the Joint Strike Fighter and to determine whether the aircraft is ready to enter this next phase. We reviewed the technical performance relative to the exit criteria for the SDD phase, the funding profiles projected over the next 10 years and the unit cost estimates. We also reviewed an independent technology maturity report by the director of defense research and engineering.

Based on the information received, we have concluded that the Joint Strike Fighter is ready to enter the next phase of development. This is not a decision to enter into production or a decision on how many aircraft to produce, but it is a commitment to continue the development leading to those decisions in the future.

The DAB has made the decision to enter into SDD, and that decision has been reviewed and concurred in by the secretary and deputy secretary of defense. I have signed the documentation that implements this decision.

With the decision to proceed now made, it is now appropriate to announce the winner of the Joint Strike Fighter competition and the prime contractor team for the remaining phases of the program. The source selection process is very rigorous, comprehensive, balanced and strict, leading to a decision on the best offer by the sources selection authority, in this case, the secretary of the Air Force.

I would now like to turn the podium over to the secretary of the Air Force, Jim Roche, to announce the winner of the competition.

Jim?

JIM ROCHE, U.S. SECRETARY OF THE AIR FORCE: Thank you very much, Pete.

The process involved, in the end, it was about 250 people, source selection advisory council. In addition, my colleague, Gordon England, the secretary of the Navy, and I had a chance to discuss the selection process with each of the subcommittees of this. We also had a chance to read everything. We separately met with the companies so that we heard from the companies.

And both proposals were very good, both demo programs were very good. But on the basis of strengths, weaknesses and degrees of risk of the program, it is our conclusion, joined in by our colleagues from the United Kingdom, that the Lockheed Martin team is the winner of the Joint Strike Fighter program on a best-value basis.

And on that, I'll turn it over to my colleague, Gordon England.

GORDON ENGLAND, U.S. SECRETARY OF THE NAVY: Jim, thanks very much.

I just want to thank Secretary Roche, one, for his leadership at this phase of the program.

I also want to thank General Mike Hough, who did a terrific job the last couple of years on this program.

This is program very, very important to the Navy, very, very important to our Marines. It has my personal full support. And I concur fully in this decision. Jim and I worked as a team in this decision.

I also want to thank the contractor teams, the management, the engineers on both the teams because they worked very, very hard. I know a lot of dedication, a lot of energy, a lot of talent went into the program. I want to thank them for their efforts. And I do look forward as we go forward on this program into the future.

Thank you all very much.

QUESTION: Mr. Secretary...

ALDRIDGE: Just a second, we'll have one more. I'd now like to turn it over to our U.K. partners, and Lord Willy Bach who has a few words to say.

LORD WILLY BACH, U.K. MINISTER OF STATE FOR DEFENSE PROCUREMENT: Thank you very much, Pete.

Today, ladies and gentlemen, United Kingdom and United States forces stand shoulder to shoulder, at the forefront of the worldwide coalition battle against terrorism.

I'm, therefore, delighted to be here to demonstrate our partnership. The United Kingdom government, as a full partner in the collaborative Joint Strike Fighter program, is very happy to endorse the decision to move the JSF program forward into the next phase and to pursue the Lockheed Martin contractual path. WOODRUFF: We are listening to the Pentagon announce the largest contract ever awarded in Pentagon history, at least $200 billion to build the next generation of fighter jets. It's called the Joint Strike Fighter jet. And it was awarded, as you just heard, to Lockheed Martin. They had been considered the favorite going into today's announcement. But when you saw the crowd of applauding Lockheed Martin, we assume they were employees, at the -- there they are again. They're pretty happy about that.

They were -- they and the Boeing Corporation were the two main competitors. But the choice has now been announced. And we'll move ahead.

I'm going to bring in my colleague Joie Chen now to talk a little bit more about this decision and what it means -- Joie.

JOIE CHEN, CNN ANCHOR: Judy, we cannot underestimate enough what a huge decision this is in the defense industry. There are many folks who would consider this almost a life-or-death issue in the defense industry, because this is, No. 1, such a huge contract. No. 2, it tells us something about where the military air capability is going to be so many years out into the future.

Joining us now with further insight on all of this, CNN military analyst, retired Air Force Major General Don Shepperd.

General, if you could talk us to a little bit about this decision, when it comes down to it, the differences between the Lockheed Martin product and the Boeing product really is not a difference of capability so much, at least of what we know that isn't classified information. In some sense, this comes down to being a pretty political decision.

RETIRED MAJ. GEN. DONALD SHEPPERD, CNN MILITARY ANALYST: Well, Joie, the secretary, Aldridge, basically made the statement that both of them met the minimums. He differentiated the two between -- between the two competitors based upon the risk involved. He said both of them were acceptable and both of them could do the job.

There's lots still to be figured out in what happens after this announcement, Joie.

CHEN: In terms of what we have seen from the prototype, and one of the things I've heard said repeatedly, particularly about the Boeing craft, is that it's not the standard pretty fighter, the picture of the pretty fighter that we are accustomed to seeing, the F- 22 image, which after all is a Lockheed product.

SHEPPERD: Well, this was not a beauty contest. As Secretary Aldridge said, it was 250 people involved in this decision that made a very, very careful technical analysis with a lot of input, not only from the United States military, but from our potential foreign partners, including the United Kingdom, who also spoke on its behalf.

This was a serious technical decision, and basically, the X-35 by Lockheed Martin had a shaft driven lift fan system. It was also new, but basically the engine used is a derivative of the F-119 Pratt & Whitney that's also used in the F-22 fighter. So all -- both -- both of the competing companies that worked on this used the F-19 derivative from Pratt & Whitney. But the airplane design, the propulsion designs of each were different, and the system chose Lockheed.

CHEN: I made a point earlier that this is -- that you cannot underestimate the significance of this decision in the defense industry, in part because what it says about the future of air capability for this country. There is some thinking that beyond this fighter, that the next stage would be pilotless fighters, the fighter plane without the fighter pilot.

SHEPPERD: Lots of work going on in the pilotless area. Some of us old fighter pilots aren't necessarily fans of that, but it's clearly the way to go.

But let me tell you that this airplane is definitely the wave of the future. You do not want to produce an airplane that's a tie. This airplane puts us decades ahead of potential competitors out there.

It's true we could have had derivatives of what we already have, but this is a joint multiservice airplane, ground attack as well as good air-to-air capability. It puts the Navy and the Marine Corps in the stealth business for the first time. Three versions of it with lots of commonality.

This is a very, very important decision, and the systems within the aircraft, the software systems in the aircraft as well as the stealth characteristics, move this far beyond any other military airplane that exists right now, Joie.

CHEN: I think that its significance then to our viewer, who might wonder why it's called the Joint Strike Fighter -- it is "joint" for a reason.

SHEPPERD: It is indeed. The anticipated market within the United States military is about 2,000 airplanes for the Air Force, around 600 for the Marine Corps, replacing the AV-8B Harrier, and around 300 for the Navy, which compliments their F-18 fleet out there. This replaces on the Air Force side both the F-16 and the A-10.

Many critics out there have said we should be continuing to buy those airplanes. Again, the important thing about the airplane is supersonic stealth and systems capability that is decades ahead of anything else in the world, when it comes out. And it's going to cover the period from 2008 to 2040. That's a long time, Joie.

CHEN: Part of the attractiveness, as I understand it, is that there are so many nations in the world now who have to be thinking about the future of the F-16.

SHEPPERD: Well, the F-16 is still a terrific aircraft. It's low-cost. It's very, very reliable. It's single engine. It's a terrific machine out there. Now, this, however, does open up a tremendous foreign export market that could develop over the years. Again, this could be almost 300 billion. It is a huge contract, the largest procurement contract in history. This is very, very significant, Joie.

CHEN: So i have to bring it up to today's issues. If the Joint Strike Fighter were available to the U.S. military operation today, what difference would it make in the operation for Afghanistan?

SHEPPERD: Well, quite frankly, it would not make any difference right now today with what we're doing. We're going in and finding targets that are hard to find and dropping bombs on those.

Where it would have made a difference is in the early days of the war. It enables us to do such things as go in against what we call the "double digit" SAMs, or surface-to-air missiles, the very, very sophisticated air defense missiles that are out there. None of those were in Afghanistan. So in Afghanistan, it would not have made a lot of difference.

However, the cost to take the older airplanes that we have, such as the older A-10s and F-16s, and modify them for the future, you would have had an older modified airplane. This is a tremendous jump, a decades jump ahead of competitors out there, and in my opinion, is a very, very smart decision.

CHEN: Major General Don Shepperd, CNN military analyst, giving us your insight about all that. Thank you very much, General.

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