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How Boeing's Growler Just Delivered a Blow to Lockheed Martin's F-35

An F-35A Lightning II joint strike fighter from the 33rd Fighter Wing at Eglin Air Force Base, Fla., and an F-22A Raptor from the 43rd Fighter Squadron at Tyndall Air Force Base, Fla., soar over the Emerald Coast Sept. 19, 2012. Photo credit: U.S. Air Force photo/Master Sgt. Jeremy T. Lock via Wikimedia Commons

You've got to hand it to Boeing (NYSE: BA  ) -- it definitely knows how to put forth a good argument. When the Department of Defense released its 2015 budget, it didn't include any funding for Boeing's EA-18G attack plane, aka the "Growler." So, what did Boeing do? It set out to convince lawmakers that without the Growler, Lockheed Martin's (NYSE: LMT  ) F-35 is vulnerable to detection, and can't be expected to survive attack missions at the start of a war -- and the argument worked

On May 8, the House Armed Services Committee unanimously passed H.R. 4435, "The National Defense Authorization Act for Fiscal Year 2015". If the U.S. House of Representatives passes it, Boeing will receive funding for five Growlers in FY 2015. 

Boeing puts Lockheed on blast
Lockheed's fifth-generation fighter is touted as being the most advanced combat jet in the world. However, according to Boeing, search radars have advanced to the point where stealth is being outpaced. Further, Breaking Defense reported about the F-35 that "[infrared] sensors, low and variable frequency radar, and networked radar and other sensor systems built or used by Russia and China make spotting a stealthy aircraft a virtual certainty." 

Of more concern is what USAF Col. Michael W. Pietrucha said of the F-35:

Specifically, [F-35] performance has not met initial requirements, its payload is low, its range is short, and espionage efforts by the People's Republic of China (PRC) may have compromised the aircraft long in advance of its introduction. Our assumptions about the operational environment, made more than a decade ago, do not match current reality with respect to either the threat (worse) or the potential adversaries (more diverse). The mission of the aircraft -- to penetrate the most advanced air defenses and drop precision-guided munitions on critical targets of a peer adversary -- remains questionable at best, especially if that peer is located in the Indo-Asia-Pacific region, where basing is limited, ranges are long, and potential adversaries have logistical advantages.

 Clearly, the above is bad news for Lockheed's F-35

Lockheed fires back
In response to Boeing's attack, Michael Rein, Lockheed's spokesman, told that the F-35's stealth capabilities are "unprecedented," and that "Extensive analysis and flight test of the survivability of the F-35 with its combination of stealth, advanced sensors, data fusion, sophisticated countermeasures, and electronic attack demonstrate conclusively its superior advantages over earlier generation aircraft." However, judging from the addition of Growlers to the Defense budget, Boeing's argument appears to have been more persuasive than Lockheed's.

EA-18G. Photo: Northrop Grumman.

What to watch
As it stands, H.R. 4435 doesn't cut funding for Lockheed's F-35. That's good news for Lockheed considering the F-35 made up 16% of Lockheed's total consolidated net sales in 2013. However, Boeing's argument seems to have delivered a blow to the F-35's image. Where that will lead is anyone's guess. Right now, H.R. 4435 has yet to pass the House, and even if it does, it still has to pass the Senate, and the President. Consequently, Boeing's Growler funding could still get cut -- as could F-35 procurement. Neither of which would be welcome news for the respective defense company's bottom line. Consequently, this is something to watch. 

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Read/Post Comments (6) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 25, 2014, at 8:12 PM, alloycowboy wrote:

    Katie, Boeing is just bitter because of there inability to win a single stealth contract.

  • Report this Comment On May 25, 2014, at 8:37 PM, dbtheonly wrote:

    It doesn't matter which plane is better. It's a battle of the Corporate Lobbyists in Congress.

    And, in these days of spiraling Federal Deficits, "H.R. 4435 doesn't cut funding for Lockheed's F-35". If the plane's inferior then why keep buying them?

  • Report this Comment On May 25, 2014, at 8:49 PM, alloycowboy wrote:

    Who said the F-35 was inferior? Can you name a single reputable Aeronautical Engineer or Test Pilot that has said as such???

  • Report this Comment On May 26, 2014, at 12:05 AM, BWinski wrote:

    So riddle me this ... WHY hasn't this F-35 EVER FLOWN A COMBAT MISSION? And WHY is this plane NOT WANTED BY ANYONE ???

  • Report this Comment On May 26, 2014, at 3:26 AM, LOB2065 wrote:

    The Lockheed Martin F35 is going down as the biggest disaster in aviation history.

    Even the International Aviation Authority has admitted that the F35 is NOT stealth, which was the fighter jets only selling point.

    The Americans are going to have problems giving the F35 away because like the F22 (another Lockheed Martin fighter jets that the US has never sold or used in any conflict) it will cost a fortune to keep in the air.

  • Report this Comment On May 26, 2014, at 10:22 PM, alloycowboy wrote:

    @Bwinski, the F-35 is still undergoing scheduled Flight Tests. You need to bare in mind Lockheed Martin is developing three planes simultaneous one of which can land vertically and make shirt take offs. The F-35 also requires 10 milion lines of code to be written for it. Also historically speaking fighter development time gets longer with every generation of airplane. The Eurofighter took 9 years to go from first flight to entry into service. It took the Dassult Rafale 15 years to go from first flight to entry to service. The F-35A is going to take 10 years, the F-35B take 8 years and the F-35C is going to take nine years to go from first flight to entry into service. As you can see the F-35 flight test programs are with in ordinary durations for forth and fifth generation fighter jets.

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Katie Spence

Katie Spence has been a financial journalist for The Fool since 2011. She specializes in defense companies, “green" technology, autos, and robots. Follow her on Twitter for breaking news in the defense, auto, and robot industry.

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8/28/2015 4:01 PM
BA $133.24 Up +1.37 +1.04%
The Boeing Company CAPS Rating: ****
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Lockheed Martin Co… CAPS Rating: ****