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As a full-service weapons maker, Lockheed Martin receives over 25 billion per year in Pentagon contracts. From aircraft and munitions, to the abysmal Star Wars missile defense program, to the spy satellites that the NSA has used to monitor Americans’ phone calls without their knowledge, Lockheed Martin’s reaches into all areas of US defense and American life. William Hartung’s meticulously researched history follows the company’s meteoric growth and explains how this arms industry giant has shaped US foreign policy for decades.
ALSO BY WILLIAM D. HARTUNG
Lessons from Iraq: Avoiding the Next War
(co-edited with Miriam Pemberton)
(co-edited with Miriam Pemberton)
How Much Are You Making on the War, Daddy?
A Quick and Dirty Guide to War Profiteering in the
George W. Bush Administration
A Quick and Dirty Guide to War Profiteering in the
George W. Bush Administration
And Weapons for All
To Ruth F. Hartung (1920-1997)
THE RISE AND FALL OF THE RAPTOR
It is a striking ad. An intimidating combat aircraft soars in the background, with the slogan up front in all capital letters: 300 MILLION PROTECTED, 95,000 EMPLOYED. The ad—for Lockheed Martin's F-22 Raptor fighter plane—was part of the company's last-gasp effort to save one of its most profitable weapons from being "terminated," as they say in standard budget parlance. The pro-F-22 ad ran scores of times, in print, on political websites, and even in Washington's Metro. One writer at the Washington Post joked that at a time when many companies had been cutting back on their advertising budgets, Lockheed Martin's barrage of full-page ads in February and March 2009 was the main thing keeping the paper afloat.
When an arms company starts bragging about how many jobs its pet project creates, hold on to your wallet. It often means that the company wants billions of dollars' worth of your tax money for a weapon that costs too much, does too little, and may not have been needed in the first place. So it is with the Raptor, which at $350 million per plane is the most expensive combat aircraft ever built.1 Secretary of Defense Robert Gates has suggested that the F-22 needs to be cut because even with wars raging in Iraq and Afghanistan, it has never been used in combat. In fact, in its first "mission"—flying to Japan for deployment at a U.S. air base there—the plane had technical difficulties and had to land in Hawaii, far short of its final destination.
But Lockheed Martin insists that the Raptor's unique capabilities more than justify its huge price tag. For example, did you know that it is the "first and only 24/7/365 All-Weather Stealth Fighter"? That it has a radar signature "approximately the size of a bumblebee"? Or that it provides "first-look, first-shot, first-kill air dominance capability"? Lockheed Martin has a lot to say, and it is serious about selling you its most profitable plane. How else to explain the statement from the F-22 Raptor web page that, "when we meet the enemy, we want to win 100-0, not 51-49"?2 It is hard to take this claim seriously. The Raptor has never seen combat—and it may never do so given that it was designed to counter a Soviet plane that was never built—so at best the score is zero to zero. But the statement has a grain of truth—it describes Lockheed Martin's lobbying efforts a whole lot more accurately than its fighter plane's mission success rate.
The company never reached its goal of 100-0 support in the Senate, but not for lack of trying. As soon as there was even a whisper of a possibility that the F-22 program would be stopped at "only" 187 planes—about what the Pentagon wanted, but only half of what the Air Force and Lockheed Martin were striving for—the company started racking up big numbers on its side. By early 2009, months in advance of President Barack Obama's first detailed budget submission to Congress—which would decide the fate of the F-22—Lockheed Martin and its partners in the F-22 project (Pratt & Whitney and Boeing) had lined up forty-four senators and two hundred members of the House of Representatives to sign on to a "save the Raptor" letter. A similar letter was sent by twelve governors—including prominent Democrats like David Paterson of New York and Ted Strickland of Ohio. R. Thomas Buffenbarger, the president of the International Association of Machinists and Aerospace Workers (IAM), also weighed in.3 The governors' letter reads as if it was drafted by Lockheed Martin, which it probably was. "We urge you," it begins, "to sustain 95,000 jobs by certifying continued production of the F-22 Raptor—a defense program that is critical to our defense industrial base." After describing it as "the world's only operational 5th Generation fighter" (a popular Lockheed Martin description of the Raptor), the letter returns to the jobs argument, asking the President to "consider carefully the economic impact of your decision."4
At the heart of the lobbying campaign was the mantra of "jobs, jobs, jobs"—jobs in forty-four states, or so the company claimed. Lockheed Martin's PR barely bothered to mention that the F-22 is needed to defend the country; that argument was there in the background, but it wasn't the driving force. Lockheed's ads for the plane got more and more specific as time went on, with a series showing people at work on components of the plane with legends like 2,205 F-22 JOBS IN CONNECTICUT; 125 SKILLED MACHINISTS IN HELENA, MONTANA; 50 TITANIUM MANUFACTURING JOBS IN NILES, OHIO; and 30 HYDRAULIC SYSTEMS SPECIALISTS IN MISSISSIPPI. All that was missing were ads for 132 LOBBYISTS, WASHINGTON, D.C.
There was only one problem with this impressive flurry of job claims: They were grossly exaggerated. Utilizing standard techniques that estimate the numbers of jobs generated by different kinds of economic activities, the $4 billion or so per year that the federal government was spending on the F-22 would create less than half as many jobs as Lockheed was claiming. The estimating method—known as input-output analysis—covers all the bases. It measures every job involved, from directly working on the plane, to working in plants supplying components, to working in the restaurant across the street from the plant where workers spend their wages, and so on.5
As for those assertions about where the F-22 jobs were located, when pressed the company refused to back them up. When a USA Today reporter asked for details on the locations of F-22 supplier plants, the company claimed that such information was proprietary and refused to provide it.6 Never mind that Lockheed Martin gets almost all of its revenues and profits from the federal government—when it's time to come clean about how it is using our tax money, it's none of our business.7
But whatever the exact number is, a job is a job is a job. And unlike many government programs whose impact is more dispersed, a military contract generates jobs in large, identifiable locations that can be directly linked to decisions made by the President and the Congress. Add to that the money and lobbying muscle of a company like Lockheed Martin and it's a tough combination to beat. Members of Congress don't want to have someone say that they voted against jobs in their state or district—or didn't do enough to keep jobs there. And when a factory scales back or empties out, it's hard to miss. The irony is that almost any other form of spending, from education to health care to mass transit to weatherizing buildings—even a tax cut—creates more jobs than military spending.8 For example, if the F-22 gets funding and spending on other public investments goes down accordingly, there will be a net loss of jobs nationwide. But most of these other jobs are less visible and more widely dispersed, and most importantly, their advocates lack the well-oiled lobbying machine that a firm like Lockheed Martin can bring to bear.
This wasn't the first time the future of the F-22 had been threatened. Back in 1999, the odd couple of the late Representative John "Jack" Murtha (D-PA) and Representative Jerry Lewis (R-CA) teamed up to withhold production funding from the F-22 in protest over the program's huge cost overruns. There was no immediate question of ending the program, just a pause to get the company's—and the Air Force's—attention.9 But to make sure that the pause didn't become more than a pause, Lockheed Martin pulled out all the stops, deploying Republican ex-Senator Matt Mattingly of Georgia and former House members like Democrats "Buddy" Darden of Georgia and G. V. "Sonny" Montgomery of Mississippi as paid lobbyists. From a luxury box at a Baltimore Orioles game to the steam room of the House gymnasium—fair game to ex-members like Montgomery and Darden—the urgent message went out that allowing funding to slip for even a few months might strike a devastating blow to our security and our economy. Representative James Moran (D-VA) was taken aback when Sonny Montgomery confronted him in the House steam room: "We sat on the sauna naked together and talked about the F-22. ... That's the advantage former members have."10
Lockheed Martin even went so far as to send its then-CEO, Vance Coffman, to visit Lewis and Murtha face to face. Coffman complained bitterly to Lewis that "you went around our back, you didn't give us a heads-up." Coffman also showed up at Murtha's office. Murtha—an ex-Marine who embodied the word "gruff "—had heard about Coffman's meeting with Lewis. He was furious, telling Coffman, "Don't ever [mess] with my chairman again." Murtha then said, "I think you better leave," only to relent and grudgingly let Coffman make his case.11
Despite the chilly reception from Lewis and Murtha, Lockheed wasn't about to give up. Former Senator Dale Bumpers (D-AR) described its efforts as "one of the most massive lobbying efforts I've ever witnessed."12 The Lockheed Martin campaign included a push by the 570,000-member IAM to lobby key senators. The IAM's Washington lobbyist held out hope for this approach because jobs "are the one thing they [members of Congress] understand."13
Meanwhile, the Air Force wasn't exactly sitting on its hands. Although technically prohibited from lobbying Congress, the Air Force formed a "Raptor Recovery Team," which, according to General Claude Bolton, put on "a full court press to tell our senior leadership in Congress ... that we believe the Air Force and the country need this." The Air Force called its pressure tactics an "informational" activity and therefore got away with them despite the restrictions on lobbying members of Congress.14
In the meantime, Lockheed's arguments on the military need for the plane prompted sharp responses even among those who thought the plane was a "technological marvel," as one company spokesperson put it. Williamson Murray of the Army War College was one such critic: "The F-22 is the best fighter in the world, no doubt about it. But there ain't any opposition out there. It's sort of like holding a boxing tournament for a high school and bringing Mike Tyson in."15
The F-22's growing cost caused its own concerns. It was so expensive that it threatened to crowd out spending on other combat aircraft. 16 It was a question of blowing billions now on a plane with no clear mission or saving up some money to buy the planes of the future.
At this point the plan was to buy 339 planes for a projected cost of over $62 billion—up from an initial proposal to buy 750 planes for a total price of $25 billion. That's more than half as many planes for well over twice the price. How could this happen? Unfortunately, all too easily. First, Lockheed Martin put in a low bid, knowing full well that the planes would cost far more than its initial estimates. This approach, known in the business as "buying in," allows a company to get the contract first and then jack up the price later. Then the Air Force engaged in what is known as "gold-plating"—setting new and ever more difficult performance requirements after the plane was already in development. Last but not least, Lockheed Martin simply screwed up certain aspects of the plane's production, even as it gouged the Pentagon on costs for overhead and spare parts. As we will see later, this is a time-tested approach that virtually guarantees massive cost overruns.
All of this didn't sit well with Lewis and Murtha. The two congressmen argued that the funds allocated for the Raptor would be better spent on pilot training, aerial refueling planes, surveillance aircraft, and upgraded F-15 fighter planes (the generation of combat aircraft that came prior to the F-22). The Army quietly but firmly agreed. Army officials had noted that the service could equip a whole division—as many as fifteen thousand soldiers—for the cost of one F-22.17 The Army/Air Force split over the F-22 was an example of "interservice rivalry"—the competition among the Army, Navy, Air Force, and Marines for the largest possible share of the Pentagon budget pie. These battles generally occur behind the scenes, but the details occasionally leak out, as in the case of the F-22. It's one of the complexities of the military-industrial complex: The military part of the complex is often divided against itself, not about how much to spend on the Pentagon, but about what to spend it on.
The future of the F-22 was finally decided in October 1999, and Lockheed Martin won in a split decision. The final deal gave the company $2.5 billion—less than the amount originally budgeted by the Clinton administration but more than the reduced level sought by Lewis and Murtha. In addition, the funding package called for more testing before the program could go full speed ahead.
The lesson for Lewis, Murtha, and the other congressional critics of the F-22 seemed to be "don't mess with Lockheed Martin." But they took solace in having at least succeeded in imposing a requirement for further testing. As for Lockheed, it learned that its lobbying machine could get the job done, although a number of observers suggested that it needed to revamp its approach to avoid being caught off guard in the future.
Cost concerns over the F-22 lingered into the early months of the George W. Bush administration, with some of his advisers suggesting that it might be necessary to kill or dramatically cut back the program to make room for other systems. But as it turned out, a second rescue of the Raptor wasn't necessary. The tragic terrorist attacks of September 11, 2001, radically changed the character of the military budget debate. A massive increase in Pentagon spending and a new attitude toward security combined to save the F-22 and other threatened projects from potential cuts. To give a sense of the magnitude of the shift, the increase in military spending from 2001 through 2003 was more than the entire military budget of most countries, including major powers like the United Kingdom and China.18 In this new climate, no major weapon system was likely to be cut, no matter how irrelevant it may have been to fighting Al Qaeda. As Harry Stonechipher, then Vice President of Lockheed Martin's chief rival Boeing, put it in an interview with the Wall Street Journal, "the purse is now open," and "any member of Congress who doesn't vote for the funds we need to defend this country will be looking for a new job after next November."19
In light of political precedent, anyone looking at the situation when the Obama administration came into the White House would have concluded that the F-22 would inevitably survive any potential budgetary threat, just as it had during the Clinton and Bush years. Despite the pledge of Obama administration Defense Secretary Robert Gates to cut outmoded systems from the military budget, the popular wisdom was that the F-22 would be spared, owing to Lockheed's lobbying clout.
But the conventional wisdom was wrong. Not only did Gates eliminate funding for additional F-22s, but he also made it clear that doing so was among the easier decisions he had to make.
At an April 6, 2009, press conference, Gates cited the need to "re-balance this department's programs" to enable it to "fight the wars we are in today and the scenarios we are most likely to face in the years ahead." In what appeared to be a rhetorical preemptive strike against opponents of particular cuts, Gates put his decisions in a strategic perspective: "Every defense dollar spent to over insure against a remote or diminishing risk, or in effect to run up the score in a capability where the United States is already dominant, is a dollar not available to take care of our people ... [and to help] win the wars we are in and improve capabilities where we are underinvested and potentially vulnerable." 20 In keeping with that perspective, Gates announced a $13 billion increase in spending on military personnel, for everything from salaries for new troops to military health care to child care, housing, and education. Gates also added $2 billion for "drones" like the Predator, an unmanned aircraft that was to cause such controversy when it launched missile strikes in the border areas of Pakistan as part of the Obama administration's stepped-up war in the region. He also proposed a 5 percent increase in funding for the Special Forces, the leading edge of any counterinsurgency effort.
The Defense Secretary also announced a series of increases in weapons spending, including an additional $4 billion for the F-35 Joint Strike Fighter (JSF), which, like the F-22, is a Lockheed Martin product. Referring to his strategic mix of cuts and increases—akin to what Representatives Jerry Lewis and Jack Murtha had tried to do in their fight to slow the F-22 program a decade earlier—Gates bragged that his decisions had done "a pretty good job, I think, of taking care of the industrial base."21
It was in this context that Gates revealed that he was ending the F-22 program at 187 aircraft: the 183 that had already been purchased and four more that were included in the fiscal year 2009 emergency appropriations for Iraq and Afghanistan. Given that Gates had repeatedly stressed that the F-22 had never been used in Iraq or Afghanistan, putting the four planes in the emergency appropriation for the wars was essentially a going-away present to Lockheed Martin that would extend production of the F-22 from late 2011 into mid-2012. Three more years of production was hardly the emergency the company and its allies had intimated in its lobbying materials and newspaper ads, which made it sound like ninety-five thousand jobs would disappear overnight if Congress failed to fund more F-22s.
The Gates decision sparked a minor uproar, as members of Congress such as Senator Saxby Chambliss (R-GA), Senator Joseph Lieberman (I-CT), and Senator Christopher Dodd (D-CT) cried foul and pledged to put up to twenty of the planes back into the fiscal year 2010 budget (compared to the twenty-four that would have been purchased if Gates had agreed to continue the program at prevailing rates). Chambliss promised to fight "as hard as I can" to save the program. Representative Phil Gingrey (R-GA), whose district contains the F-22 assembly plant, searched frantically for somewhere to get the money to keep the F-22 going. He went so far as to issue a bizarre statement to the effect that the plane should be funded in lieu of "wasting money" on developing a vaccine for swine flu. Another Georgia representative, Republican Tom Price, excoriated the President for the F-22 decision: "It's outrageous that President Obama is willing to bury the country under a mountain of debt with his reckless domestic agenda but refuses to fund programs critical to our national defense."22
F-22 supporters outside of Congress were even harsher. Retired Lieutenant General Michael Dunn of the Air Force Association—a powerful lobby representing tens of thousands of ex-Air Force personnel—argued that Gates's decisions "may cost us lives and reduce our strategic options in a very dangerous world."23
Even as they geared up for a vigorous effort to save the F-22—a campaign described by one former congressional staffer as verging on "an ugly food fight"—Lockheed Martin supporters were caught short when the company itself appeared to withdraw from the field of battle. In an April 22 conference call with defense industry analysts—just over two weeks after Gates's announcement—Lockheed Martin's Chief Financial Officer (CFO), Bruce L. Tanner, announced that the company would put no more effort into restoring funding for the F-22. "We had our chance to lobby this matter," Tanner said. "We think we had a full hearing of that discussion. We are disappointed with these decisions, but we will accept those and go on."24 The Lockheed Martin decision was no accident. An observer with inside knowledge of Robert Gates's efforts to terminate the F-22 program said that Gates called Lockheed Martin CEO Robert Stevens into his office and essentially said, "If you oppose me on this, I'll eat your lunch." Given all the other business the company had with the Pentagon, Lockheed's top management decided to back off on lobbying for the F-22 for fear of alienating the company's biggest customer.
Congressional boosters of the F-22 like Saxby Chambliss and Joe Lieberman—whose state is home to Pratt & Whitney, the engine-builder for the F-22—vowed to carry on the fight for the plane, as did the machinists' union. Jeff Goen, the president of the IAM branch in Marietta, Georgia, continued to play the jobs card: "It doesn't make sense that the government is looking at trying to save or create jobs at the same time it's cutting something like this." The union's political director, Richard Michalski, pledged that its members would send thousands of messages to Congress urging them to restore Gates's proposed cuts when the budget came before them in June or July 2009. "It's going to be about jobs at the end of the day, but not in a selfish way," said Michalski.25
For all of his proposed cuts—the elimination or sharp reduction of eight programs—President Obama's proposed military budget still represented an increase over the last year of the Bush administration. The difference was in the distribution of the funds—spending more on personnel and partially shifting funds away from big-ticket items like the F-22 that were designed to address Cold War threats and into systems like the Predator that would be immediately put to use in current conflicts. Secretary Gates had achieved a shift in military spending, not a cut. But even this was no small achievement, given how rarely a major weapon system is eliminated.
Like a chess player looking two moves ahead, Gates had taken the jobs argument into account. While his official position regarding congressional opposition was to say, "My hope is that ... the members of Congress will look past parochial interests and consider what is in the best interest of the country as a whole," Gates's package of cuts was clearly crafted with the jobs issue in mind. He maintained that the decision was all about the defense needs of the country, but Gates was quick to point out that the job increases resulting from the acceleration of the F-35 program would more than offset the job losses from ending the F-22 program. He indicated that while direct F-22 jobs would fall by eleven thousand—from twenty-four thousand to thirteen thousand—between 2009 and 2011, the F-35 program would gain forty-four thousand jobs over the same time period. Given that Lockheed Martin was also the prime contractor on the F-35, and that many of the same subcontractors involved in the F-22 worked on the F-35, Gates appeared to have trumped the jobs argument.26
But that didn't mean there wouldn't be a nasty "food fight" in Congress. The opposition to the cuts was bipartisan, pork-driven, and led by senators whose home states had the biggest stake in the program—Chambliss, whose home state of Georgia housed the F-22's assembly operations, and Dodd, whose state was home to Pratt & Whitney, the producer of the engine for the F-22.
The initial skirmish occurred in the Senate Armed Services Committee, which voted 13-11 to build another seven F-22s, a maneuver that would keep the production line up and running and open the door to the provision of even more funds the following year. The goal of program advocates was to get at least to the Air Force's prior goal of 243 planes, an additional 56 beyond what Gates was willing to buy. That would mean another $10 billion or so in taxpayer money that wouldn't be available for other purposes, military or domestic.
The Armed Services Committee vote reflected the domestic politics of F-22 production, with liberals like Massachusetts Democrats John Kerry and the late Ted Kennedy voting for the plane because they had F-22 work in their state. But the economic tie to Massachusetts was marginal at best. Raytheon, a major Massachusetts-based weapons maker, is responsible for key electronics systems on the plane, but the work is done mostly in California. In explaining his support, Ted Kennedy's office suggested that the senator hoped to see F-22s based at National Guard installations in his state. But even these fairly modest connections were enough to swing the votes of Kerry and Kennedy, perhaps out of the habit of voting for all things Raytheon.27 Meanwhile, Senator John McCain (R-AZ), President Obama's opponent in the 2008 presidential elections, voted with committee chairman Senator Carl Levin (D-MI) to kill the plane. McCain was to be a key player as the fight moved to the Senate floor.
The vote in the House Armed Services Committee was far more dramatic, with lawmakers staying up until 2:30 in the morning before voting to support $369 million in long lead-time funding to help keep the project going. The vote was 31-30. Confirming the point that a little pork goes a long way, Utah Republican Rob Bishop had sponsored the amendment, even though no significant manufacturing work on the plane would be done in his state. His interest had to do with the fact that F-22s would probably be deployed at Hill Air Force Base in Utah as replacements for three squadrons of F-16s stationed there.28
Now that the Armed Services Committees had spoken, the real action moved to the Senate, where a vote would be held on the fate of the F-22 during consideration of the Pentagon budget as a whole. Senators Levin and McCain joined hands to promote an amendment that would strip the money for F-22s that had been added by the Senate Armed Services Committee. The lines were drawn. Given Lockheed Martin's claim that work on the plane was being done in forty-four states (represented by eighty-eight of the body's one hundred members), the company seemed to have the odds in its favor, even without putting on a major lobbying campaign in the wake of Gates's decision to cancel the program. But Levin and McCain were not alone. Gates had persuaded President Obama to threaten a veto of any defense bill that included the F-22, the first such veto threat he had made as president. Defense industry analyst David Berteau described the move as "virtually unprecedented," asserting that he "[hadn't] seen anything like it" in his decades in and around the Pentagon and the defense industry.29
- On Sale
- Dec 28, 2010
- Page Count
- 304 pages
- Bold Type Books