By Eric Pianin Follow
December 27, 2016
When the legendary five-star general Henry “Hap” Arnold founded the Air Force as an independent service following World War II, he built a strong constituency among members of Congress and the skilled workers in their districts. It came to be known as “geographic peanut-buttering.”
Rather than having the Air Force or a small coteries of private manufacturers build the next generation of fighter aircraft, Arnold broke up the contracts into smaller pieces and awarded them to aircraft plants and parts suppliers throughout the U.S. “It was like spreading peanut butter across the country,” explained Gordon Adams, a military historian. And it created enormous good will for the Air Force.
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Over the years, the Air Force and other branches of the military have perfected the art of “peanut-buttering.” And this helps to explain why Lockheed Martin’s highly controversial and costly F-35 Joint Strike Force will survive and thrive in the coming years, regardless of President-elect Donald Trump’s threat last week that he might abandon it in favor of a less expensive jet fighter.
Trump momentarily stunned the defense industry and caused a substantial dip in Lockheed Martin’s stock by tweeting that cost overruns in the $400 billion program to develop a new generation of stealth jet fighters had prompted him to ask rival Boeing to “price out” a comparable F-18 Super Hornet – although the F-18 lacks many of the F-35’s stealth features. Trump had earlier complained that the $100 million-per-copy cost of the F-35 was “out of control” and vowed to negotiate big savings.
But extracting huge additional concessions from Lockheed Martin after the company agreed to previous cuts won’t be easy, even though the F-35 remains the Pentagon’s costliest military hardware project in history. That’s because the project is slathered in peanut butter.
The F-35 program boasts a supply chain that reaches out to practically every state in the country. While government watchdogs and critics have long derided the project’s runaway costs and frequent setbacks, the F-35 program has generated tens of thousands of jobs in 45 states and enjoys strong bipartisan support throughout Congress.
The F-35 is a stealthy state-of-the-art jet fighter designed to span the military services for the U.S. and its allies, including Israel, Canada and Great Britain. There are three distinct models that take off and land in conventional ways, do short takeoffs and vertical landings, and that are launched from aircraft carriers using a catapult.
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Lockheed Martin has teamed up with more than 1,250 suppliers to produce thousands of components for the complex aircraft system, including sophisticated radar sensors and parts of the aircraft’s fuselage, according to the company. Overall, the F-35 program is responsible for more than 146,000 U.S. jobs, according to an Associated Press report.
Some 18 states have counted on the F-35 for $100 million for more of economic activity throughout the life of the contract, including Arizona, California, Connecticut, Texas, Georgia, and Florida. The program is responsible for 38,900 jobs in Texas alone and close to 10,000 in Connecticut.
“This is the thing that is going to make it devilishly difficult for Trump or anybody else to do anything about it,” said Adams, a professor emeritus of foreign policy at American University. “I’m staggered that a president of the United States thinks he’s going to negotiate hardware contracts. That’s already an act of chutzpah beyond recognition. In the end, I don’t think the contract is going to be terribly different.”
“What it says,” he added, “is that it’s really hard to cancel one of these pups . . . But what Trump is not going to do is cancel the program. The geographic peanut-buttering makes sure that he isn’t going to cancel the program.”
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Indeed, for all of Trump’s harrumphing about costly military contracts, Congress controls the defense budget and makes the final decisions on which programs stay in or come out. Todd Harrison, a defense budget authority with the Center for Strategic and International Studies, told the AP that while the F-35 had massive budget overruns in the initial stages, the cost has stabilized and even dropped a little following tough negotiations between Pentagon officials and Lockheed Martin.
Still, the project has nearly doubled in cost since its inception, and the lifetime cost of the F-35 could reach $1.5 trillion, according to some estimates.
“Trump is unlikely to squeeze more blood out of this rock,” Harrison said.