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Senate Votes to Kill F-22 Fighter Program

It was never just about the F-22 fighter jet. The Pentagon, Defense Secretary Robert Gates, and President Barack Obama have won a significant symbolic and strategic victory that could help shape the direction of U.S. military policy and procurement in the years that will follow the July 21 Senate vote to halt production of Lockheed Martin's ( (LMT)) missile-eluding Raptor fighter jet. "The President really needed to win this vote," and not merely because of the specific question of the F-22's fate, said Senator Carl Levin (D-Mich.), who chairs the Senate Armed Services Committee. The vote mattered as much, he noted, "in terms of changing the way we do business in Washington." Executives at Lockheed, the world's largest defense contractor, aren't complaining about the Senate vote or the shift in governmental direction that the vote affirms. Why? They've got their eyes on bigger prizes, notably the cutting-edge F-35 Joint Strike Fighter, which Lockheed estimates could account for one-tenth of the huge defense contractor's sales as early as this year. The F-22, designed in the waning days of the Cold War, has not been used in either Iraq or Afghanistan. Production is to be halted at 187 planes. Defeat for Subcontractors and Unions Shares of Bethesda (Md.)-based Lockheed, which on Tuesday reported its second consecutive quarterly decline in profits—largely because of rising pension costs—fell just over 7, or 8.6%, to 75.04. Obama's victory was a defeat for the central lobbying protagonists. United Technologies ( (UTX)), whose Pratt & Whitney unit makes the F-22's engines, and Lockheed's unions, based in places such as F-22 production hub Marietta, Ga., fought hard to gain enough votes to keep the fighter funded. Senator Chris Dodd (D-Conn.) estimated that at least 120,000 jobs in 40 states were at stake, including 95,000 workers for subcontractors to Lockheed. They are employed by small companies and by such contracting giants as Northrop Grumman ( (NOC)), Raytheon ( (RTN)), and Boeing ( (BA)), which make parts of the plane. Unions predict a flurry of immediate layoffs. Military officials and some politicians warn of negative military implications, particularly a loss of U.S. technological knowhow. Senator Patty Murray (D-Wash.), whose constituents include Boeing, said: "If we end the F-22 program, we are cutting a link in technology that we will not be able to repair overnight." Additionally, former and current Air Force officials, including some military officers, have argued that the F-22 is still strategically worthwhile. Gates Eyes Less-Conventional Conflict Gates has dismissed such assertions. He spoke out forcefully in recent days against the F-22, saying the idea that not buying 60 more F-22s would imperil national security was "nonsensical." Gates, during a July 16 speech to the Economic Club of Chicago, spoke of F-22 backers' reliance on "far-fetched" arguments and asked: "If we cannot bring ourselves to make this tough decision, where do we draw the line?" Gates in particular has sought to redirect Pentagon spending toward weaponry more useful in less-conventional conflicts, and the F-22 quickly became a cause célèbre for him. Sources say he personally implored Obama to threaten to veto the program. In the end, concern over aerospace jobs and strategic necessity failed to trump the will of the White House and its holdover Defense Secretary. The July 21 Senate vote was 58-40 against continuing the plane's production. Opposition to the F-22 has been the latest focus of attempts by Senator John McCain (R-Ariz.), last year's Republican nominee for President, to bring what he considers more rationality into the Pentagon procurement business. Said McCain, in an interview via Twitter with ABC News correspondent Jake Tapper: "The F-22 amendment is a crucial vote on whether we can prevail over the Military Industrial Complex or not." F-22 Not Quite Dead: Appropriations Danielle Brian, director of the nonprofit watchdog group Project on Government Oversight—a frequent critic of procurement politics and practice—views the F-22 vote as "a game-changer" that "marks the end of business as usual and the beginning of real reform in Washington." That remains to be seen. In Washington, as Yogi Berra once famously said, nothing's over until it's over. F-22 funding could still be restored during appropriations deliberations and during conference sessions aimed at reconciling House legislation—which includes some money for the plane—with the Senate bill. If the F-22 were to survive, it would be in defiance of a huge effort at the highest levels of government and the military, including the Joint Chiefs of Staff, to move on with other weapons systems and strategies for fighting unconventional conflicts. It would also fly against the wishes of two Defense Secretaries, three chairmen of the Joint Chiefs, and some of the current top officials of the Air Force. And Lockheed? Its executives have been careful not to irritate Gates and the Administration. The company stopped pushing for the F-22 months ago. Says company spokesman Jeff Adams: "We'll support the U.S. government's final decision on the F-22 program."
Epstein is a correspondent in BusinessWeek's Washington bureau.

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