South Korea Stumble Threatens Lockheed's 'Super Jet'

Aug 19, 2013 | Updated Oct 19, 2013

Despite recent reports to the contrary, it has been a rough patch for Lockheed Martin's F-35 Joint Strike Fighter, now known as the "Lightning II."

Under current plans, the Air Force's "plane of the future" is slated to cost at least $1.5 trillion over its lifetime, which, Pentagon analyst Winslow Wheeler has pointed out, is the equivalent of the Gross Domestic Product of Spain.

There are also serious questions as to whether the F-35 will ever work as planned. It has had problems taking off and landing vertically, as required for the Marine Corps version; landing on an aircraft carrier, a capability the Navy obviously cannot do without; and developing adequate software to allow it to do all the things a modern, so-called "fifth generation" fighter plane is supposed to be able to do.

Amidst all of these signs of a procurement disaster in the making, the Air Force and Lockheed Martin, the plane's prime contractor, have fallen back on a few simple lines of defense. One is that it is a complicated plane, and that all of the bugs will be worked out given enough time.

Another argument put forward in defense of the F-35 is that we can't possibly cancel or scale back production of the plane because we would be letting down our allies who have committed to buying it.

This second line of argument - that we can't let down our allies who are chomping at the bit to get their hands on the F-35 - suffered a major setback this week when South Korea announced that Lockheed Martin's bid for that nation's 60-plane "F-X" fighter purchase exceeded the price Seoul is willing to pay for new combat aircraft.

It was widely assumed that the F-35 - the aircraft of the future! - would win the South Korean competition hands down. But recent developments should have tipped Lockheed Martin and the Pentagon off to the fact that this would not necessarily be the case. Canada has already talked about backing off of their prospective F-35 purchase and putting their fighter plane deal back out for competitive bidding. Italy can't afford to buy F-35s in the numbers originally envisioned. Norway is dramatically slowing down its F-35 buy, and Australia has delayed its purchase as well.

So, if a major reason for building the F-35 is to help out U.S. allies, we should think again as a growing number of U.S. allies are saying "thanks, but no thanks" to these immensely costly aircraft.

The tactic of last resort in trying to save some of Lockheed Martin's big foreign deals will be to boost the economic benefits promised to the purchasing country, in a practice referred to as "offsets." Offsets are quid pro quos in which a company like Lockheed Martin promises to kick back part of the price of a plane to the purchasing country. For example, in the case of South Korea it has promised to help Seoul to develop and build its own military communications satellite, and to develop a simulation system for use by Korean pilots. In addition, Korean companies would be offered the chance to build parts of the F-35.

All of this offset activity will come at the expense of U.S. jobs. Once similar offset deals are provided to Norway, Australia, Italy, Turkey, Israel, the United Kingdom, Japan and other current or prospective F-35 purchasers, the job benefits to the United States will be whittled away even further. And because some of the offset deals call for companies in the recipient countries to become ongoing suppliers for all F-35s, not just the ones purchased for their own countries, some of the job losses from offsets will be permanent.

The Korean case shows that time is running out on the argument that F-35s are being built to help out our allies. And Lockheed Martin's response in Korea and elsewhere - offering them jobs and technology if they stay the course and buy the F-35 - shows yet again that the company cares more about making a buck than preserving U.S. jobs. Keep that in mind the next time Lockheed and the Air Force try to use the jobs argument as their trump card in debates over whether to keep funding the F-35.

William D. Hartung is the director of the Arms and Security Project at the Center for International Policy and the author of Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex (Nation Books).