Rumors of losing contract flying around Boeing offices

ST. LOUIS -- Even when speaking privately, away from reporters' notebooks, officials at Boeing Co. always say "when we win" while talking about the Joint Strike Fighter. Never "if."

That's the kind of bravado needed in St. Louis this week, with word expected Friday from the Pentagon on whether Boeing and its St. Louis-based military aircraft group -- or rival Lockheed Martin Corp. -- has won the $300 billion JSF contract.

Ask around, and word is that Friday's word will be Lockheed.

"It would be a case of the U.S. Air Force going with a company that knows what they want," said David Steigman, a senior analyst with the Teal Group in Fairfax, Va. "When you look at who the majority customer for the JSF is going to be, it would make sense in those respects to go with Lockheed."

Other analysts have come to same conclusion over the past several months as the contest phase of what could become the largest contract in Pentagon history draws to a close. Tack on last week's news reports that also called the contest for Lockheed, and St. Louis is left nervously fretting over a once unthinkable prospect: Boeing is going to lose.

"It is still a close competition," House Majority Leader Dick Gephardt said last week as he made the rounds of St. Louis media, seeking to calm nerves.

"It's going to be made on the merits: Who has the best design, who has the best track record for actually producing a plane of this kind? I think Boeing has a great chance to win this contract. We are doing everything we can to help them."

Split contract

That, perhaps insightfully, includes a backup plan.

Last month, Republican Sen. Kit Bond said he would propose splitting work on the JSF between Boeing and Bethesda, Md.-based Lockheed, requiring the Pentagon to split production of the jet between both contractors regardless of whose design it chosen.

Congress ordered the Pentagon to award the business to a sole contractor in last year's defense authorization bill. Bond, who tried to change that policy last month with an amendment to next year's defense authorization measure, later dropped the effort but promised to revive it.

"I'm going to make every effort, regardless of the winner, because I think it's a matter of national security," Bond said Monday.

The JSF is the definition of multitasking: It's designed in variants to replace the Air Force's F-16 and A-10, the Navy's F-14 Tomcat, the Marine Corps' AV-8B Harrier, as well as serve in Britain's Royal Air Force and Navy.

It's massive deal for up to 3,000 jets expected -- in Boeing's case, to provide 5,000 employees in St. Louis with jobs at its Military Aircraft and Missile Systems group for 30 years. In Fort Worth, Texas, where Lockheed would build the JSF, the Chamber of Commerce said losing the JSF contract could cost 11,000 jobs.

But the same job and revenue security that comes to the winner will evaporate from the loser. Production of Boeing's F-15 has basically ended, while the company will complete the Navy's order for the F/A-18 about the same time production of the JSF is scheduled to begin in earnest.