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Lockheed Wins $200B Jet Fighter Contract

Lockheed Martin Corp. on Friday won the largest military contract in U.S. history when it received a Pentagon deal worth well over $200 billion for the engineering and manufacturing of the next-generation U.S. fighter jet.  

Lockheed Martin won over rival Boeing in the winner-take-all contest for the Joint Strike Fighter (JSF). The companies waged a long and costly advertising and lobbying campaign for the contract, which establishes Lockheed as the nation's sole fighter jet manufacturer.

Conventional wisdom had been favoring Lockheed, the biggest U.S. defense contractor. 

The contract is for 3,000 supersonic jets with radar-evading capabilities to replace the aging fighter fleets of the Air Force, Navy and Marines, albeit with modifications to fit the needs of each branch.

Lockheed, based in Bethesda, Md., has said if it won it would add as many as 9,000 jobs at its Lockheed Martin Aeronautics division in Fort Worth, Texas, which currently employs 11,000.

Lockheed's astronautics division has a facility in Jefferson County, Colorado.

Chicago-based Boeing had predicted it would have added 3,000 new jobs for its Seattle facility and another 3,000 engineering jobs and 2,000 production jobs at its St. Louis plant.

Boeing, the Pentagon's No. 2 contractor, "could more easily absorb the loss,'' partly because it has an unmanned combat aircraft in the pipeline, likely to be a huge new business, said Stuart McCutchan, publisher of Defense Mergers & Acquisitions, an industry newsletter. 

United Technologies Corp. is already a winner with both teams using the JSF119 engine made by its Pratt & Whitney unit. 

The JSF is to be a family of high-performance, low-cost "stealth'' aircraft, designed to evade radar and to replace Air Force's F-16 and A-10, the Navy's F/A-18 and the Marine Corps' AV-8B Harrier. It also would be used by Britain's Royal Air Force and Navy, which want 150 of the planes. Britain has committed $2 billion toward the development of the plane.

The Defense Department gave Boeing and Lockheed $660 million each in 1996 for research and development of prototypes that could take off quickly, land vertically and on carrier decks, throw off radar and provide all the high-tech cockpit gadgetry demanded by modern warfare.

Boeing's test model, dubbed the X-32, is more compact than Lockheed's X-35. The X-32 has a gaping air intake on the front and dual lift nozzles underneath, while the X-35 achieves its short takeoffs and vertical landings with a single thruster and a lift fan at the top of the plane.

Both Boeing and Lockheed's planes for the Marines, the Royal Air Force and the Royal Navy can land vertically. Versions for the Air Force and Navy are designed to land conventionally.

The General Accounting Office, Congress' investigative arm, twice warned the jet could end up costing more, take longer to build and have performance problems because the technologies need more development. The Pentagon has said its independent investigation found the technologies are adequate.

Reuters and the AP contributed to this report.