Lockheed Martin loses bid for $9.2B contract to build trainer jets in Greenville

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The Lockheed Martin/KAI T-50A is outfitted with an aerial refueling receptacle on its dorsal and a ground-based training system for pilots. Photo provided by Lockheed Martin.

The U.S. Air Force’s next fleet of combat training aircraft won’t be produced in Greenville.

Last week, the Air Force announced that it has awarded a $9.2 billion contract to Chicago-based aerospace company Boeing Co. to replace its aging fleet of T-38C Talons with up to 475 aircraft and 120 ground-based training simulators by 2034.

The announcement marked a major upset for Maryland-based aerospace and defense company Lockheed Martin Corp., which had proposed to build the aircraft at its facility in Greenville. Officials say the multibillion-dollar project would have brought an estimated 200 to 250 direct jobs to the Upstate. 

“We were disappointed to learn that the U.S. Air Force did not select our offering,” said Leslie Farmer, a spokeswoman for Lockheed. “We believe we presented a very strong solution and await the customer’s debrief to hear more details regarding the decision.”

Lockheed was one of three companies vying to build the T-38C replacement.

Instead of submitting a clean-sheet design, the company partnered with Korean Aerospace Industries to develop a modified version of the T-50 Golden Eagle, a supersonic advanced trainer jet that was developed by the two companies in the 1990s.

The upgraded aircraft design, known as the T-50A, featured an aerial refueling receptacle on its dorsal and a ground-based training system for pilots. It also featured a fifth-generation cockpit and open-system architecture, which allows for a faster integration of new sensors, weapons, and other capabilities, according to Lockheed officials.

Lockheed Martin T-50A. Photo provided.

DRS, the U.S. subsidiary of Italian aerospace firm Leonardo, submitted its T-100, a new version of a jet fighter trainer it already supplies for Italy, Israel, Poland, and Singapore.

Boeing partnered with the Swedish aerospace firm Saab to develop a twin-seat, single-engine trainer jet that features a glass cockpit modeled to resemble that of the Lockheed F-35 Lightning II, and an open-system architecture that offers flexibility to evolve as technology, missions, and training needs change.

The production capabilities include solutions for radar and sensors, signature management, training and simulation, and support services, as well as for high-resolution 3D mapping, air traffic management, and homeland security.

“Today’s announcement is the culmination of years of unwavering focus by the Boeing and Saab team,” said Leanne Caret, president and CEO of Boeing’s defense business. “It is a direct result of our joint investment in developing a system centered on the unique requirements of the U.S. Air Force. We expect T-X to be a franchise program for much of this century.”

Richard Aboulafia, an analyst with Teal Group, an aerospace consultancy in Fairfax, Virginia, told Upstate Business Journal earlier this year that Lockheed had a 55 percent chance of winning the contract since the T-50A didn’t involve a lot of upfront development costs that would add to the price.

“This entire competition comes down to the costs,” he said. “Boeing has a good aircraft, but Lockheed has the upper hand because there’s less risk involved with their design. It’s been demonstrated.”

During a phone interview on Monday, however, Aboulafia said he wasn’t surprised by the Air Force’s decision to select Boeing for the contract since the company’s pricing was apparently “a lot more aggressive” than Lockheed’s proposal.

Boeing T-X. Photo provided.

In a statement, the Air Force said the original cost estimate to replace its fleet of T-38C aircraft was $19.7 billion, meaning Boeing was somehow able to shave the projected acquisition cost of the combat trainer by more than half.

“This new aircraft will provide the advanced training capabilities we need to increase the lethality and effectiveness of future Air Force pilots,” Air Force Secretary Heather Wilson said in the news release. “Through competition we will save at least $10 billion on the T-X program.”

The Air Force will initially issue a contract for $813 million to Boeing. The company is expected to deliver five aircraft and seven simulators to Joint Base San Antonio-Randolph, Texas, by 2023. It will build the aircraft at its manufacturing plant in St. Louis, Missouri.

Lockheed planned to produce four aircraft per month at its Greenville facility if awarded the Air Force contract, according to Farmer.

The 16-hangar facility, which is located at the S.C. Aviation and Technology Center in southern Greenville County, has provided modification, maintenance, repair, and overhaul services for both military and civil aircraft since 1984.

Lockheed spent three months retrofitting a 38,000-square-foot hangar for the production of the T-50A. Employees would have come from Lockheed’s current employee pool or the aviation-training program at Greenville Technical College.

“While we are disappointed that the Lockheed Martin proposal was not selected, we are optimistic about Greenville’s future in aviation,” Mark Farris, president and CEO of Greenville Area Development Corp., wrote in an email to Upstate Business Journal. 

Two Lockheed Martin T-50A trainer jets fly above Greenville. Photo provided.

Lockheed is currently modifying a 110,000-square-foot hangar in Greenville to house the production of the F-16 Viper, a fourth-generation, multirole fighter jet.

As the Upstate Business Journal reported, Lockheed announced plans last year to relocate its F-16 production line from Fort Worth, Texas, to Greenville to accommodate the F-35, a fifth-generation fighter jet with stealth capabilities.

The company has received a $1.12 billion contract from the U.S. government to produce 16 advanced F-16 Block 70 Fighting Falcons for the Royal Bahraini Air Force. Lockheed Martin plans to hire up to 200 people to support the contract.

“The F-16 production line is a significant addition to our industry base, and Lockheed Martin will be in a good position to compete for future projects based on the renovations that have recently occurred on several buildings at SCTAC,” Farris wrote.

Lockheed is also working to secure a contract with the Indian government that would reportedly involve the purchase of 200 F-16 fighter jets.

The company’s Greenville facility would assemble some of the initial aircraft if the deal happens, according to spokesperson John Losinger. The remaining work, however, would probably occur in India due to a partnership between Lockheed and Tata Group, India’s leading global enterprise.

The contract would also allow India to export its F-16s, which means India could end up competing with Lockheed’s Greenville operations for any work to upgrade about 3,200 F-16s currently in use by various countries, according to Defense News.

A rendering shows the F-16 Block 70 that will be built for Bahrain at Lockheed Martin’s facility in Greenville. Photo by PRNewsfoto/Lockheed Martin Aeronautics.

Aboulafia, however, said he doesn’t expect Greenville to produce many of the supersonic jets.

“The F-16’s only real hope for a sustainable line is an India order, and that means building in India,” he told Upstate Business Journal last year.

Nonetheless, Lockheed expects its F-16 production line to generate strong sales in the coming years. The company’s first-quarter sales in aeronautics jumped $278 million, or 7 percent, to $4.4 billion in part because of higher volume on modernization activities for the F-16 program.

Lockheed said the F-16 Block 70 aircraft is fitted with advanced avionics, a proven active electronically scanned array radar, advanced weapons, conformal fuel tanks, and an automatic ground collision avoidance system. It also features an upgraded cockpit and advanced engine, as well as an extended structural service life of 12,000 hours.

To date, a total of 4,604 F-16 Fighting Falcon fighter jets have been purchased by 28 customers worldwide, according to Air Force Technology. About 3,000 of those aircraft are flying today.

This is a developing story and is being updated as more information is made available.

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