January 22, 2014 / 11:00 AM / in 4 years

Lockheed overstates F-35 jobs: think tank

WASHINGTON, Jan 22 (Reuters) - Lockheed Martin Corp’s estimate that its F-35 fighter plane program supports 125,000 jobs in the United States is “greatly exaggerated” and the real amount may be half that number, according to a new think tank report issued Wednesday.

William Hartung, a longtime critic of the $392 billion F-35 program, argues in the report issued by the nonprofit Center for International Policy that Lockheed is overstating the number of F-35-related jobs to shore up support for the program.

The report could provide fresh fodder for backers of Boeing Co, which is hoping to sell the U.S. Navy more of its F/A-18 fighter jets, and other critics of the F-35 program.

Hartung said Lockheed and three other big F-35 suppliers also made campaign contributions totalling $11.1 million to key lawmakers that oversee funding for the newest U.S. warplane.

As the Pentagon’s single largest weapons program, the F-35 is a frequent target in military budget cut drills. But top U.S. officials have said current funding levels are important to preserve economies of scale aimed at lowering the plane’s cost over time.

“The claims about the F-35 as a job generator are an argument of last resort for a program that has been plagued by cost overruns, performance problems, and questions about how many are needed,” wrote Hartung, author of a 2010 book critical of Lockheed.

He said it was important to understand the true impact of the weapons program so Congress could “debate the future of the F-35 based on its strategic merits, not pork barrel politics.”

Hartung’s report said standard estimating procedures used by other studies would put the number of jobs closer to 50,000 to 60,000.

Lockheed, the Pentagon’s No. 1 supplier, defended its estimate, which is based on 32,500 direct jobs and adds 92,500 indirect jobs. The company said it expected the number of jobs would grow as production increased.

“We calculate the jobs impact for our programs using methods accepted by industry and leading economists,” said Lockheed spokesman Michael Rein. He said Lockheed’s jobs multiplier was similar to the one used by Boeing, the No. 2 supplier to the U.S. Defense Department.

Hartung also challenged Lockheed’s claim of significant F-35 work being done in 46 states. He said two states - Texas and California - accounted for over half the jobs on the program, and the top five states, which include Florida, Connecticut and New Hampshire, accounted for 70 percent of the jobs.

Lockheed is building the F-35 for the U.S. military and eight countries that helped fund its development: Britain, Australia, Canada, Denmark, Norway, Turkey, Italy and the Netherlands. Israel and Japan have also ordered the jets.

Companies in participating countries compete for work building components of the jet. In addition, Italy and Japan are building large plants where F-35 jets will be assembled.

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