F-22 Manufacturers Brace for Uncertainty

The F-22’s belated European debut in the skies over England at an airshow lasted 15 minutes, but the flips and turns did little to rally any new allies for the advanced stealth fighter, whose future has become increasingly glum in recent months.

At $143 million per copy, the F-22 Raptor is the Defense Department’s most expensive fighter jet and an easy target for slashing in tightening budgetary times. Intended to replace the Air Force’s aging F-15 Strike Eagles, the F-22 went operational in 2005 and is being flown by squadrons based in Alaska, New Mexico and Virginia. But it has not yet seen combat — a point that Defense Secretary Robert Gates has cited as one reason for not funding the plane in next year’s budget.

The lack of funding comes at a turning point in the program, when a decision must be made to either continue or terminate production. This leaves the program — and the plane’s manufacturers — in a lurch, analysts say.

“It’s one of the most passive-aggressive budget moves that I’ve seen,” says Richard Aboulafia, vice president for analysis at the Teal Group Corp.

Support for the F-22 Raptor program has continued to plummet at the Pentagon, particularly following the ouster of the Air Force’s top two officials this summer. Manufacturers of the aircraft are sounding the alarm as the fate of the 5th generation fighter jet now falls to politicians holding the purse strings in Congress and officials holding the country’s reins in the next administration.

“Funding has to be in place, or we will begin to shut down,” says Bob Jenkins, director of F-22 business strategy at The Boeing Co., which builds the stealth fighter’s wings and the aft fuselage in Seattle. Lockheed Martin Corp. builds the forward and mid fuselages at its plants in Marietta, Ga., and Fort Worth, Texas. Final assembly of the aircraft takes place at the Marietta factory.

Last year, the Defense Department purchased 60 additional F-22s under a three-year contract, bringing the total number of aircraft to 183. The President’s fiscal 2009 budget does not request any funds to continue the program beyond the contract, which will end with deliveries of the
ninth lot of aircraft in 2011.

If there are no funds by Oct. 31 to continue production of the F-22, the manufacturers will begin executing the initial shutdown of the line as stipulated by the contract. While the production of the final lot of aircraft would carry on through 2011 without much impact, officials say that future orders would be hurt because the suppliers need advance funding to start producing critical parts for aircraft that would be built in 2012.

“We have a lot of components that go into the plane that take quite a long time to fabricate, process and inspect through a series of activities before they come in to us,” says Dave Pouliot, Boeing’s production operations director for F-22. “The concern is more in the supply chain because of those long-lead items that take a long time to produce.”

The stealth plane has several key components, including bulkheads, horizontal stabilizers, radar, and communications and navigational equipment, that require longer periods to manufacture and deliver to the respective factories. Some long-lead items need as many as 36 months, says Pouliot. For example, the forward boom, to which the wings are attached, is made of titanium and must be electron-beam welded. It is one of the few components that calls for a three-year lead-time.
Suppliers on the front end of the cycle may run out of work next year if funds are not added to the 2009 budget, Jenkins cautions. Delivery of many of the current contract’s aircraft parts will be completed as early as the middle of next year, he adds.

The lack of funding for additional jets signals a potential end to a program that has taken years to spawn into the military’s most advanced fighter. The Air Force initially said it would buy 762 jets, but modified the number to 381. The Defense Department is only buying 183 F-22s, and analysts say that might be all the Air Force will ever receive.

“The Air Force’s biggest mistake was insisting on 381. They should’ve chosen a more budgetarily sustainable number,” says Aboulafia. The service’s unfunded priorities list submitted to Congress includes a request for 20 additional aircraft to continue the production line beyond 183.

Legislators appear willing to devote money to the cause. The House Armed Services Committee has promised funds to support the advanced procurement for lot 10 aircraft. The Senate Armed Services Committee also has added funds to the budget but is deferring the decision, for
either a shutdown of the line or advanced procurement for lot 10, to the next administration.

The Defense Department recently agreed that the country’s next president should make the decision.

“The strategy of leaving it to the next administration looks like a stall tactic more than an actual strategy,” says Aboulafia.

A Lockheed Martin official tells National Defense that the company supports the current Defense Department position to defer the decision on continued F-22 production to the next administration. This would allow for a comprehensive review of all national security needs,
including tactical air requirements and the F-22, the official says. “We believe this is a prudent approach and one that we support. It will be up to the Air Force, the Defense Department and the Congress to determine the appropriate numbers” says Sam Grizzle, director of communications for aviation programs.

But leaving the decision to the next administration will put the program in flux. Aboulafia says that such uncertainty could potentially weaken the argument that more F-22s should be built because, over time, costs could increase and the supply base and talent pool of manufacturers could erode.

Under the current contract, manufacturers are building a total of 60 F-22 fighters, in lots seven through nine, for $6.3 billion. If the production line is stopped and then restarted, the costs per unit will increase, Boeing officials say.

A Rand Corp. study conducted for the Air Force found that it could cost as much as $555 million to stop and then restart the line for a buy of 75 additional F-22s. A more effective strategy would be to continue producing the plane at a rate of 20 per year between 2010 and 2012, and
15 per year in 2013, the study concluded. Keeping the line open would mean the total production cost would be $13.7 billion instead of $19 billion.

Boeing officials say that if production continues uninterrupted, then the costs for the plane will decrease. There has been a 10 percent reduction in cost with each subsequent block of the current buy, with $411 million in cost savings in block nine. The aircraft now costs half of what it did in the first block, Jenkins says. Of the 183 aircraft under contract, the companies have delivered 119
aircraft so far.

“Our teammates at Boeing, along with our entire supplier base, are producing exceptionally high quality aircraft that are being delivered on or ahead of schedule and on budget,” the Lockheed Martin official says.

The Air Force is buying two next-generation fighters — the F-22 and the F-35 Joint Strike Fighter, which is in low-rate production. Many eyes are set on the highly anticipated JSF, the replacement fighter for the F-16 and the A-10, but Jenkins cautions that the Joint Strike Fighter
is not a replacement for the F-22.

But that will be a challenge for F-22 manufacturers because the plane cannot be sold to foreign customers, unlike the F-35, which is being marketed to at least eight different nations.

Aboulafia says there is still hope for the F-22 in the fiscal 2010 budget cycle, and in the supplemental war budgets that Congress may pass. “But if the 2010 budget cycle ends without funding, then it’s pretty much ‘game over,’” he says.

Manufacturers remain optimistic about the program.

“Regardless of what happens with the F-22, the learning we’ve had here has positioned people for great success going forward. Hopefully that’s more success on F-22,” says Pouliot.

Topics: Aviation, Joint Strike Fighter, Tactical Aircraft, Manufacturing, Air Force News