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By William Patalon III
Money Morning/The Money Map Report
Defense contractor Lockheed Martin Corp., (LMT) has awarded aluminum giant Alcoa Inc.(AA) a $360 million contract to supply special castings for the special new stealth fighter jet known as the ‘Joint Strike Fighter.'
The U.S. military will use the Lockheed Martin F-35 Lightning II Joint Strike Fighter (JSF) replace such jet fighters as the F-16 Fighting Falcon, the F/A-18 Hornet and the Harrier jump jet currently being flown by the Air Force, Navy and Marines. It's one of the largest and most-expensive defense-procurement programs ever, with an estimated total cost of $275 billion.
The contract calls for Alcoa's Cleveland-based division – a specialist in cast and forged products – will design and produce large aluminum structural die forgings for more than 1,200 aircraft over the next 10 years. The forgings consist of 15 large wing- and engine-supporting bulkheads and six wing-box parts per plane.
Lockheed Martin expects to build more than 4,000 of the aircraft for the United States and international forces, Alcoa said.
Alcoa is expecting still more contracts related to the F-35. Other Alcoa units will provide such components as fasteners, alloy plate and high-pressure turbine blades. Those contracts are still being negotiated.
"Our engineers, operations managers and designers have worked collaboratively to offer complex die forgings that will meet weight reduction requirements and extremely tight time frames that will allow our customer to stay on schedule," Joseph E. Haniford, vice president and general manager of the Alcoa unit, said in a statement.
As part of the contract, Alcoa plans to invest $24 million in its Cleveland facility, mainly for new machinery, equipment and infrastructure improvements, said the Pittsburgh- based company, with has executive offices in New York City.
Going Long on Lockheed
Lockheed has a storied history as an aircraft company. During the so-called "Golden Age" of aviation – which lasted from the 1920s until the latter part of the 1930s – Lockheed built such fine civil-aviation airplanes as the Lockheed Vega and the Lockheed Electra. Both were flown to records by famed aviatrix Amelia Earhardt, [click on links to see both of Earhardt's Lockheed aircraft, one of which is on display a the National Air and Space Museum in Washington]. It was a modified Electra that Earhardt was flying on a record-seeking around-the-world flight when she and navigator Fred Noonan disappeared somewhere in the vicinity of tiny Howland Island in the South Pacific in 1937.
Neither Earhardt nor Noonan were ever seen again, and the Electra was never found. The mystery – which many consider as the greatest mystery in the field of aviation – continues to intrigue flying enthusiasts, even today. The Delaware-based International Group for Historic Aircraft Recovery (TIGHAR), headed by the charismatic and controversial Ric Gillespie, continues to investigate the mystery to this day.
When World War II started, Lockheed became a key part of the "Arsenal of Democracy," developing the Lockheed Hudson Mk I twin-engine medium bomber, the first U.S.-built aircraft to be used operationally by the British Royal Air Force during that conflict. Though a bomber, when a Hudson flamed a German Dornier flying boat off the cost of Jutland in October 1939, it recorded the first German aircraft shot down by the RAF in WWII.
But it was with a fighter plane that Lockheed really cemented its reputation – the "first" Lightning, the P-38, the airplane serving as the namesake for the new Joint Strike Fighter.
The P-38 Lightning was a twin-engine, twin-tailed aircraft that the German Luftwaffe nicknamed "The Fork-Tailed Devil." It was even more effective in the Pacific Theater, where the top two U.S. aces of all time – Major Richard "Dick" Bong, with 40 kills, and Maj. Thomas "Tommy" McGuire, with 38 – both flew Lightnings. Atlantic solo flight pioneer Charles "The Lone Eagle" Lindbergh, of Spirit of St. Louis fame, was a civilian advisor in the Pacific Theater, teaching U.S. Army Air Corps pilots how to stretch the range on their P-38s. He often accompanied Army pilots on long missions, flying a P-38 himself, and reportedly even shot down an enemy aircraft.
In more recent years, Lockheed has remained the same innovative aircraft pioneer. With its famed "Skunk Works" project-development unit, Lockheed developed a number of "black budget" aircraft, such as the SR-71 Blackbird, a reconnaissance aircraft that could fly so fast and so high that it was never hit by enemy fire on any of its secret missions. The aircraft has been retired for years, but many of its performance standards and achievements remain classified.
The Skunk Works scored again when it developed the F-117 Nighthawk Stealth Fighter, the odd-looking, faceted fighter-bomber that was able to pierce the night skies over heavily defended Baghdad in the First Gulf War and never trigger the Iraqi air-defense systems.
Lockheed Martin is the prime contractor on the F/A-22 Raptor, the newest Stealth jet fighter to joint the U.S. air arsenal. It beat out Northrop Grumman and its technically advanced YF-23 in a multi-year fly-off, and production aircraft are being fielded operationally.
The F-35 is even more advanced that the F-22, because of vectored-thrust technologies, which will have a major impact on takeoff and landings, and on in-flight maneuverability.
Other Lockheed Contract
Lockheed on Friday said it was awarded a $1.24 million contract from the Defense Advanced Research Projects Agency. The contract is the third phase of a program that enables the U.S. Navy to improve situation awareness in maritime operations.
Lockheed Martin will provide software upgrades to the program, called "Fast Connectivity for Coalitions and Agents Program," and install the operations at several U.S. Navy commands as part of the deal.
For investors seeking a top defense contractor for their portfolio, here are the key factors to consider about Lockheed Martin: Based in Bethesda, Md., it is the country's largest aerospace and defense contractor. During 2007, Lockheed's shares soared more than 46%, due to strong sales of everything from jet fighters-including the F-35 and the F-22 Raptor-to satellites.
News and Related Story Links:
- The San Jose Mercury News:
Alcoa awarded fighter jet parts deal.
- CNNMoney.com/Thomson Financial:
- Forbes.com/The Associated Press:
- Lockheed Martin Corporate Press Release:
Lockheed Martin to Transition Technology That Dramatically Improves Situation Awareness in Maritime Domains.
Skunk Works (Lockheed).
Lockheed P-38 Lightning (The Fork-Tailed Devil).
The Golden Age of Aviation.
- The International Group for Historic Aircraft Recovery (TIGHAR):
The Amelia Earhardt Disappearance Investigation.
- Crosby, Francis, The Complete Guide to Fighters & Bombers of the World, Herme's House, 2006.
- Eden, Paul (Editor), The Encyclopedia of Modern Military Aircraft, Amber Books, 2004 and 2006.
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.