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Lockheed pitches $6 billion C-130J buy |
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By Roxana Tiron
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Posted: 10/25/07 07:05 PM [ET] |
In an effort to avert having to shut down its Georgia production line in three years, Lockheed Martin is lobbying the Air Force to buy an additional 120 C-130J aircraft under an offered multi-year contract worth more than $6 billion.
The Air Force now buys both the C-130J Super Hercules aircraft, which transports troops and equipment in theater, and the KC-130J, which the Marine Corps uses to refuel its aircraft. But that contract is slated to run out in August 2009.
War supplemental funding for additional C-130Js and a contract with Norway will keep production lines open until the end of 2010.
Lockheed Martin’s offer comes as the Air Force evaluates whether to replace older versions of the Hercules with the C-130J, which can fly faster and carry more. The Marine Corps is also considering replacing all its tanker fleet with the KC-130J.
Under Lockheed’s unsolicited plan, which is now under review in the Pentagon, defense planners would buy a total of 120 C-130J of different configurations between 2011 and 2015, according to Pentagon officials.
Lockheed’s offer assumes the Air Force and Marine Corps would buy 24 airplanes a year for five years. International customers would purchase an additional six airplanes a year, under Lockheed’s plan.
Lockheed currently builds about 12 C-130Js a year at a cost close to $60 million per plane for Air Force and Marine Corps versions.
Lockheed projects on average that a combat delivery variant would cost $50.4 million a plane; a shorter, more mobile version would cost $47.8 million; and an air refueling tanker would cost $51.8 million, in current dollars.
Adjusted for inflation and prior to contract negotiations, Lockheed’s proposal would cost $58.9 million to $63.7 million per plane between 2011 and 2015, according to Pentagon officials.
“From my perspective it is a pretty attractive opportunity,” said Air Force Chief of Staff Gen. Michael Moseley in a wide-ranging interview with The Hill. “We need to let the [acquisition] people look at it, especially if you get the cost down to $47-48 million. Depending what is possible to the acquisition world, that is a very attractive opportunity.”
The Air Force expects to use different calculations than those Lockheed used in its proposal, a Pentagon official said.
The Air Force currently does not have a requirement for an additional 24 to 30 aircraft a year, the number assumed under Lockheed’s offer, although the service is currently reviewing its needs. The defense company’s proposal does allow that four fewer or four additional aircraft could be purchased per year, said the official.
But Lockheed’s price target also assumes strong international interest in the C-130J, said the official, who described that assumption as high-risk.
The Air Force is looking at Lockheed’s offer in the context of the 2010 budget process, which could help “substantiate” the Air Force’s own long-term analysis of its aircraft needs, the official added.
The proposal has to go through several vetting steps at the Pentagon and then Congress before it becomes a reality.
Congress is currently considering a 2008 war supplemental request that includes funding for 15 C-130Js, seven KC-130J tankers and two MC-130J special-operations variants.
Those requests may run into resistance, as several members have criticized the inclusion of the aircraft in an emergency supplemental.
The C-130J is the successor to the C-130 Hercules E-H models that currently form the backbone of America’s tactical airlift. The newer J-version was developed as a private venture by Lockheed.
The J generates greater operational efficiency than older C-130s by flying farther, faster, with more cargo and higher reliability, the company contends.
The C-130J had its share of critics within the Pentagon who almost succeeded in cutting the contract with Lockheed Martin short. But congressional pressure from members from Georgia and West Virginia, where the plane is built, have kept the program going.
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