Strike one. Strike two. For Lockheed Martin's (NYSE:LMT) hi-tech wonder-plane, it's all over but the shouting.
Defense Secretary Gates wielded the budget axe against Lockheed's Raptor fighter jets last week, putting the final kibosh on production of the best air-superiority aircraft in the world. Yesterday, the United States Air Force signed its own John Hancock on the F-22's death certificate. Acceding to the Secretary's position, the Air Force agreed that it can get by with just the 187 aircraft now authorized, and make do with the new F-35 Lightning II fighters (also by Lockheed) for future military needs.
But now begins the real fight: Congress.
The Raptor may be Lockheed's plane, you see -- but it's not just Lockheed's plane. Boeing (NYSE:BA), Northrop Grumman (NYSE:NOC), and United Technologies (NYSE:UTX) all serve as major subcontractors to the F-22's manufacture.
General Dynamics (NYSE:GD) plays a small role as well, and L-3 Communications (NYSE:LLL) contributes part of the plane's electronics. And even more important than the names of the key players are their locations. 44 of the nation's 50 states produce F-22 plane parts, meaning that literally hundreds of members of Congress have a stake in keeping this program alive.
The Raptor must die
As a taxpayer, though, I hope that Congress will eschew pork-barrel economics this time around and let the Raptor die in peace. In light of the Air Force's decision, Lockheed itself is reportedly reconsidering its lobbying effort in support of the plane, as well it should. After all, Lockheed doesn't need the F-22 for its survival. Far from it.
Since it was first dreamed up in the '80s at a planned fleet size of 750 units, the F-22 program has steadily shrunk. Right now, the debate seems to be between continuing to build out to 243 aircraft (one third the number originally envisioned) or standing pat at 187 (one quarter). By now, Lockheed must realize that it's fighting a losing battle.
In contrast, Lockheed's F-35 program seems to swell by the day. The most conservative estimate I've seen lately calls for as many as 3,100 F-35 variants to be built for the U.S. and its partner nations over the next 60 years -- $1 trillion in revenue for Lockheed. Other estimates, including sales to allied states who did not participate in the plane's development, suggest that a far higher number of F-35s will eventually be sold.
My advice: Let the F-22 rest in peace, Lockheed. You already captured Lightning in a bottle with the F-35. Quit while you're ahead.
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