Lockheed Scrambles to Save F-22
Washington Post Staff Writer
Sunday, September 12, 1999; Page A22
It was a painful moment for the chief executive of the world's biggest defense company. One day after a House subcommittee rammed through a bill that threatened to kill Lockheed Martin's $70 billion F-22 fighter jet program, company head Vance Coffman visited one of the congressmen who orchestrated the action to find out why he did it.
"Maybe you should leave," replied Rep. John P. Murtha (D-Pa.), pointing to the door. The legendarily blunt legislator then proceeded to dress down Coffman for perceived slights to the subcommittee chairman who led the assault on the F-22, Rep. Jerry Lewis (R-Calif.).
The confrontation underscores the high stakes--and intense emotions--in the debate over the F-22. Never in recent years has Congress threatened a major military program on the verge of production. Now, a combination of circumstances--ranging from a debate over the plane's military value to longstanding tensions between Lockheed Martin Corp. and Lewis--have combined to create a once-unthinkable showdown that will come to a head in a House-Senate conference committee this week.
The F-22's critics in Congress say they targeted the jet because they believe that it is not affordable and that the Air Force overspends on needless projects. Industry executives assert that Lewis, the new head of the House Appropriations defense subcommittee, saw the F-22 vote as a way to assert his clout. Some think the California Republican acted in part out of sheer dislike for Lockheed, prompted by a corporate feud and a lawsuit in which he has been embroiled.
The F-22 story is also in part a tale of the continuing decline of a Washington lobbying powerhouse. Lockheed's lobby shop has faltered lately, and is scrambling to reorganize by the time the House-Senate budget panel takes up the F-22. Until June, the firm's six divisions each had separate lobbyists, who at times feuded with each other.
To save the F-22, the company's lobbyists--including a new crop, such as former senator Mack Mattingly (R-Ga.)--are scrambling to mobilize subcontractors in 47 states. By e-mail, the suppliers are being urged to hold pep rallies and to contact Congress with warnings about layoffs if the jet is axed. The firm also organized an Internet ad campaign and enlisted sympathetic unions, trade associations and think tanks.
Lockheed's problem, some industry officials say, is it has grown so huge through mergers that top executives have failed to monitor the political pulse of programs such as the F-22. Serious trouble on some military contracts also engendered ill will for the firm in Washington. Last year, it failed to secure approval for its bid to acquire Northrop Grumman Corp., and it vastly underestimated the trouble ahead in getting Congress's permission for its pending purchase of Comsat. Just last week it lost a $4.5 billion spy satellite contract.
Company officials say Lockheed hasn't lost its way in Washington. With help from former U.S. trade representative Mickey Kantor, it recently persuaded the White House to let it keep launching satellites on Russian rockets--despite alarm over Russian advice to Iran's missile-builders. Citing turnarounds in some programs, Coffman said, "we are totally focused on performing successfully for all our customers."
But industry analysts have doubts. "In some ways, the company has been blindsided in Washington," said Richard Aboulafia, an analyst with the Teal Group aerospace consulting firm. "Wall Street has been the company's focus, not their customer markets in Washington. . . . It may have concluded the F-22 was a done deal, and they didn't need to keep tabs on key [F-22] players who were somewhat unheard of."
One such player was Lewis. He raises no technical objections to the plane--it's a high-tech marvel that can evade radar and fly at top speed farther than any jet. Instead, Lewis says the nation can't afford it in view of two other planned fighters costing $270 billion--the Joint Strike Fighter and new versions of the F/A-18. The F-22 also diverts funds from gravely underfunded projects, such as pilot training and bonus pay, he says.
F-22 allies argue that the jet, which is supposed to replace the decades-old F-15, is needed to ensure U.S. dominance of the skies. They contend that cutting the F-22 would actually raise the cost of the Joint Strike Fighter because many F-22 components are to be used in that aircraft.
On July 12, Lewis mounted what some saw as a sneak attack on the F-22, placing a hold on production by slashing $1.8 billion from next year's budget. The 11-term representative took steps to cloak his moves: His own staff learned of the vote only hours before. Days later, the House approved the measure, over bitter protests from Pentagon officials.
Back in May, Lockheed had given Lewis and Murtha $6,000 each in campaign contributions, but when Coffman visited Lewis's office on June 29 for a chat, Lewis said nothing of his planned assault. So the day after Lewis unveiled his F-22 cut, Coffman confronted Lewis, barely able to disguise his anger.
"You went around our back, you didn't give us a heads-up," Coffman told the congressman, according to sources familiar with the meeting. Lewis told Coffman to take his appeals elsewhere.
Coffman then visited Murtha, the subcommittee's ranking Democrat and a Lewis ally. Murtha said Coffman had shown disrespect to Lewis.
"Don't ever [mess] with my chairman again," Murtha told him, according to sources. The congressman said Coffman should leave, then relented. Lockheed officials and the two legislators now say their relations are cordial and describe their meetings as businesslike.
But it was not a successful outing for Coffman, a brilliant but taciturn engineer who is uncomfortable politicking on Capitol Hill. Coffman had run the firm's classified space work before taking over in 1997 and prefers the immutable laws of deep space--he once invented a way to orient spy satellites by starlight--to the rough-and-tumble of politics.
The firm's previous leaders were far more political. Founder Glenn Martin invited senators to his Eastern Shore estate to hunt geese, aided by loudspeakers blaring migratory honks tape-recorded by company engineers.
Coffman's immediate predecessor, the gregarious Norman R. Augustine, was for decades one of the military-industrial complex's most skilled insiders. Bill Clinton was the third president to ask him to be defense secretary. Augustine created the modern Lockheed by cramming four large firms into his own. Then he retired, leaving Coffman to run a factionalized company with 190,000 employees and some looming problems.
One was the F-22. Augustine had located the F-22's assembly plant in Marietta, Ga., in part because he hoped two powerful Georgians, Democratic Sen. Sam Nunn and GOP House Speaker Newt Gingrich, would protect it. Their departures from Congress darkened its prospects.
"Lewis would never have taken on the F-22 if Gingrich were around to protect Marietta," a defense lobbyist said.
Lewis said he doesn't resent Lockheed and that he took his action against the F-22 because he mistrusts Air Force decision-making.
But, for six years, he has tangled acrimoniously with Lockheed and has aggressively promoted the interests of a small defense company that is a bitter enemy of the corporate giant.
Congressional staff members say the competition between Lockheed and Recon/Optical Inc. (ROI) for Pentagon contracts to build reconnaissance cameras for combat jets is one of the most venomous corporate battles they've seen. Each firm accuses the other in court and in lobbying appeals of making trashy cameras and spreading lies.
Lewis has been energetic in pressing ROI's interests. He has steered tens of millions of dollars to the firm--a godsend for a company with an annual revenue of $50 million.
Behind closed doors, he also has inserted language into budget reports moved by two committees on which he serves--the House appropriations and intelligence panels--praising ROI's technologies as "revolutionary " and "state-of-the-art," and denouncing the Air Force and Marine programs that use Lockheed technologies as "poor" and "troubled." He has frequently sought to hold up funding for Lockheed cameras destined for F/A-18 jets, and in 1997 he inserted language into a report describing Air Force plans to buy Lockheed cameras for F-16s as "intolerable."
Lewis also is pressuring Pentagon officials to design the specifications for a planned Navy reconnaissance project called SHARP, to cost $500 million or so, to favor ROI, congressional sources said.
Industry officials are puzzled over why Lewis works so tirelessly for Illinois-based ROI. His district is adjacent to the California headquarters of ROI's parent firm, Bourns Inc., but that office has only 300 employees. Their lobbyists have given him only a few thousand dollars in campaign funds.
However, ROI's $160,000-a-year lobbyist, D'Anna Tindal, once worked for his appropriations panel and is close friends with his top defense aide, Letitia White.
An industry executive, who thinks Lewis's alliance with ROI played a role in his F-22 action, said the congressman has stated he views Lockheed as a leviathan trampling a small firm that has a superior product. A congressional staff member who has butted heads with Lewis on the issue said, with him, "this is personal."
It might have gotten more personal in February, when ROI sued Lockheed in a dispute over reconnaissance systems for the F-16. Under an arrangement pressed by Lewis, ROI was to build cameras for the system and Lockheed was to assemble them into other high-tech components.
Last year, Lockheed stopped paying ROI for the cameras, claiming they did not work. In October, according to the ROI suit, a Lockheed official told an ROI executive that the company "had proof that ROI controls Cong. Lewis," and that ROI had "directed Lewis" to stop funding Lockheed cameras. Lockheed wouldn't pay ROI until it fires Tindal, "shuts up" Lewis aide White and "makes Cong. Lewis stop blocking (Lockheed) funds," the suit quoted the Lockheed official as saying.
Both Lockheed and Lewis said the lawsuit played no role in the F-22 controversy.
"I have absolutely not read the lawsuit," Lewis said. "I haven't bothered to pay attention."
The betting is that on the F-22, Lewis will lose to senators such as Ted Stevens (R-Alaska), head of the Senate Appropriations Committee, who want to save the jet. But industry officials say Congress may later cut the program from 339 planes to something closer to 100--another disastrous scenario for the once-cocky company.
"We're like the New York Yankees," said a Lockheed executive. "The team everybody loves to hate."
Staff writer Juliet Eilperin contributed to this report.
© 1999 The Washington Post Company