The Navy will urge Defense Secretary Dick Cheney to rescue the troubled A-12 stealth aircraft program by partially bailing out the contractors and perhaps by buying fewer planes, said a Navy official who would not be identified.
Cheney was expected to decide as soon as today whether to continue the program. If dropped, it would be one of the biggest weapons systems ever canceled.
The contractors, McDonnell Douglas Corp. and General Dynamics Corp., have said they would be compelled to lay off about 8,000 workers at plants in St. Louis and Fort Worth, Tex., if the A-12 program is canceled.
Pete Williams, a Defense Department spokesman, said senior Pentagon and Navy officials were holding "very intensive" talks yesterday with contractor officials, who included John McDonnell, the chairman of McDonnell Douglas, and William A. Anders, the General Dynamics chairman. He declined to provide any details.
The Navy calls the A-12 its top priority in weapons development. The aircraft, still under development, is supposed to replace the Navy's aging fleet of A-6 Intruders, a carrier-based aircraft now deployed in the Persian Gulf.
The Navy wants to begin replacing the Intruders within a few years, but the A-12 contractors have fallen at least 18 months behind schedule in building the first six prototypes. They also are running at least $1 billion over budget and are demanding that the Pentagon absorb some of the extra expense even though their contract calls for delivery of the prototypes at a fixed price of $4.8 billion.
The Navy official said Cheney will be asked to agree to a restructuring of the contract so that the government, in effect, would absorb some of the cost overruns. He said he could not estimate how big the bailout might be, but presumably it would run into the hundreds of millions of dollars.