Greece picks Lockheed for fighter order

Preliminary deal is for at least 50 F-16s

Boeing F-15 rejected

$2 billion agreement

Northrop Grumman's Linthicum plant to make the radar

Defense industry

May 01, 1999|By Ted Shelsby | Ted Shelsby,SUN STAFF

Bethesda-based Lockheed Martin Corp. announced yesterday that it has reached a preliminary agreement to sell at least 50 F-16 fighter planes to Greece in a transaction valued at a total of $2 billion.

Greece selected the F-16 Fighting Falcon over the F-15 Eagle, made by Boeing Co., after a long and intense evaluation, said Joseph Stout, a spokesman for Lockheed Martin.

"Greece has selected the plane and said it wants to buy it, but the transaction must first be approved by Congress," Stout said.

He said Congress did not object to previous sales of 80 F-16s to Greece, and the company does not anticipate a problem this time.

According to Stout, the value of the sale to Lockheed Martin is about $1.4 billion. The remainder would go to other defense contractors around the nation.

Shares of Lockheed Martin, which have fallen 23 percent in the past year, were unchanged yesterday at $43.0625.

The biggest economic impact of the sale in Maryland will occur at Northrop Grumman Corp.'s Electronic Sensors and Systems Sector plant in Linthicum, adjacent to Baltimore-Washington International Airport. The northern Anne Arundel County plant produces the radar housed in the nose of each F-16 fighter.

About 300 employees at the Linthicum site are working on the F-16 program. "We do not anticipate adding any new employees to accommodate this new radar work," said Jack Martin, a spokesman for Northrop Grumman. "Rather, this important win will help us in our efforts to stabilize our engineering and manufacturing work force here in Maryland."

Production of radar for the F-16 has been one of the largest programs in the 60-year history of the Northrop Grumman complex, formerly a part of Westinghouse Electric Co. Since the mid-1970s, the local plant has produced more than 6,500 F-16 radars that are used by the military of the United States and 19 allied nations.

Northrop Grumman has 7,400 workers in Maryland.

Greece is acquiring an advanced version of the F-16, which features the latest avionics including color monitors in the cockpit. For extended range, external fuel tanks will be attached to the fuselage above the wings. "This decision by the government of Greece is an extremely significant win for the F-16 industry team," said Dain M. Hancock, president of Lockheed Martin's military aircraft division.

"This was hard-fought competition against the leading fighters available today on the world market, and the selection comes as a result of one of the most thorough, intense evaluations we have witnessed," he added.

Despite the competition, Paul H. Nisbit, president of JSA Research in Newport, R.I., which concentrates on the aerospace in- dustry, said "the decision was anticipated."

"It was no big surprise that Greece chose the F-16 rather than the F-15," he said. "When U.S. aid is involved, except in the case of Israel, the cheaper aircraft almost always ends up being the winner."

He said the single-engine F-16 sells for roughly $25 million, about half the cost of the twin-jet F-15.

Nisbit said the importance of yesterday's agreement is that it will help Lockheed Martin keep its F-16 production line in Fort Worth, Texas, running until at least 2001.

"This will help them get even more sales in the future," he said. "It's very rare and very expensive for a company to restart an aircraft production line once it has shut down."

Stout said the Texas plant is hopeful of picking up even more orders for F-16s in coming months. He said the company is in negotiations to sell planes to Israel, Egypt and the United Arab Emirates.

Pub Date: 5/01/99

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