Zombie Defense Programs

I remember when Democrats became the majorities of Congress in 2006. I remember the intervening lame duck months as a time when my colleagues cowered around in dark corners and spouted prophecies like Nostradamus himself. Not just your usual "tax&spend" horror stories. They cried about how we'd withdraw from all wars immediately. That our defense bill would get cut down to next to nothing. That defense and aerospace industries across America would see a recession even more terrible than the post-Cold War Bush I/Clinton years.

 

It's not like they've all come back so I could say see I told you so. No surprise to me, but while Obama is (wisely) practicing fiscal responsibility he's decided defense will not be cut. It's going to be interesting to see where this goes. So far he's pissed off a lot of liberals, and it's not like he earned himself any points with last year's defense budget with conservatives who didn't like Secretary Gates' new lean diet for the defense industry.

 

But what about the problems in many of these programs? Obama tried to "kill" the Lockheed Martin F-22 program last year and pissed off a bunch of Georgians, including blue collar, unionized democrats. The F-22 costs $140-$180 million each (depending on your source) , and has a known crash record, while running 33 months behind schedule with a 62.7% cost overrun. That didn't stop congressmen from one of the many states where this Frankenstein piece of hardware is being manufactured from complaining loudly. Or trying to sneak it into last year's budget anyways. Others either genuinely believed the US needed this kind of fighter or were simply couching their local pork greed in terms of military strategy.

 

Now it looks like Lockheed's F-35 Joint Strike Fighter is having some problems of its own; behind schedule with $16 billion in total program cost overrun. Gates has penalized Lockheed by withholding $614 million in award fees, though has stated the US Government will be paying for at least "part of" the overrun costs. Purchases will be delayed (with what choice when Lockheed can't deliver) and eventually nine planes cut from total purchase amount. Which is a pretty small number given the Air Force, Navy and Marines all plan to eventually buy 2,400 planes in total. To top it off Gates will replace the program head and replace him with a yet unnamed higher ranking General.

 

And what of Lockheed Martin, the defense company that can't seem to get its act together? It's stock is up +1.64 for the day as of this writing.