Leader Blues

Friday, January 12, 2007

TOP STORY >>Pentagon to keep buying C-130Js

IN SHORT: Deputy Defense Secretary Gordon England orders more planes, reversing Donald Rumsfeld’s decision to kill the carrier.

Bloomberg News

The U.S. Defense Department has reversed its decision to stop production next year of the Lockheed Martin Corp. C-130J transport plane.

(Seven C-130Js have been assigned to Little Rock Air Force Base, and several more are expected here now that the plane’s future is no longer in doubt.)

Deputy Defense Secretary Gordon England, in a budget directive sent to the military service secretaries, chiefs of staff and acquisition officials, added $2.6 billion to the Air Force fiscal 2008-2013 budget plan to purchase 30 C-130Js for the Marine Corps and Air Force, starting with six in 2009.

England’s decision is good news for the world’s No.1 defense contractor because it allows Lockheed Martin’s Marietta, Ga., production line to remain open beyond 2009, when the last plane in the current backlog would have been produced. The C-130J, costing more than $60 million each, is one of Lockheed’s top three military aircraft programs.

England reversed a decision former Defense Secretary Donald Rumsfeld made two years ago after the Air Force made the case that more of the modern transports were required, said Loren Thompson, a defense analyst with the Lexington Institute, an Arlington, Virginia-based research institute.

“With Donald Rumsfeld now departed from the Pentagon, the services are beginning to reverse decisions made on his watch that they considered ill-conceived,’’ Thompson said. “In the case of the C-130J, the Air Force feels it must replace aging cargo planes that are becoming too dangerous to fly, and the C-130Js the only suitable replacement.’’

186 Sold to Date
Secretary England added $1.77 billion through 2013 to buy 20 C-130Js at the rate of four per year for the Air Force Special Operations Command and $863 million more though 2013 to buy 10 KC-130J aerial refueling tankers for the Marine Corps, at the rate of two per year, over the 34 already on order for the Corps.

To date, Lockheed has sold a total of 186 C-130J to the U.S. Air Force, Marine Corps, Coast Guard and foreign customers.
England’s “Program Decision Memorandum,’’ signed Dec. 13, is one of four directives sent to the U.S. military service secretaries, chiefs of staff and acquisition officials that spell out spending priorities through fiscal 2013 for space, aircraft, special operations, health care and defense intelligence programs.

England’s directives will be reflected in the Defense Department’s portion of the fiscal 2008 budget that President George W. Bush will propose next month and in the Pentagon’s long-term spending plan.

England spokesman Kevin Wen-sing had no immediate comment.Thomas Jurkowsky, spokesman for Bethesda, Maryland-based Lockheed Martin, said the company was not aware of the details of the budget but “we are able to say, however, that the aircraft is performing exceptionally well in two combat theaters and is exceeding all expectations.’’

Rumsfeld’s Opposition
Rumsfeld sought to end the C-130J program in late 2004. As part of a major budget-cutting proposal, he ordered it terminated in fiscal 2006, stopping two years early what had been a signed five-year contract for 60 aircraft.

Rumsfeld reversed that decision amid intense congressional opposition after budget analysts determined it would cost almost as much to end the contract early than to buy all the aircraft.

Still, he made clear the program would end after 2008. In a February 17, 2005 congressional budget hearing, he defended that decision saying that, at $66.5 million apiece, the C-130J “has become increasingly expensive to build and to maintain, especially given the ability to modernize existing C-130s” with new technology upgrades.

Lockheed has C-130J subcontractors in 23 states, including Florida, Utah, Colorado, South Carolina, Kansas, New Jersey, Texas and Mississippi.