Boeing, Lockheed vie for fighter contract in Palmdale.

A $750 billion contest is about to be played out in Palmdale.

The high-stakes dogfight comes as a result of Boeing Co.'s decision earlier this month to build two fighter plane prototypes at its Palmdale facility, just a short distance from where its competitor Lockheed Martin Corp. is building its prototypes.

At stake for the two aerospace giants is winning the contract to build the Joint Strike Fighter, a military aircraft that will replace several fighter planes used by United States and foreign militaries. The new fighter will be used by the Air Force, Marine Corps and Navy, as well as the Royal Navy of the United Kingdom. The contract to build the fighter is valued at about $750 billion over 20 years, including subcontracts.

Elected officials from the Antelope Valley, enthused by the activity, are pushing legislation that would give tax credits to either Boeing or Lockheed - whichever gets selected for the final contract - for any Joint Strike Fighter work done in California.

State Assembly Bill 1779 would save the selected company - as well as its California subcontractors - an estimated $10 million in wage credits and $10 million in property credits over a five-year period.

"What's unique about this bill is, it's targeted toward a program rather than an industry," said the author, Assemblyman George Runner, R-Lancaster. "They only get the tax credit for the work they do in California. So if they don't do the work in California, we don't really lose anything."

Runner said the final contract would create about 20,000 jobs in whatever state the Joint Strike Fighter is built.

The number of jobs created by the assembly of the prototypes is far smaller. Boeing's first Joint Strike Fighter workers will begin construction at Palmdale's Air Force Plant 42 in July or August, and the work force will reach its peak of 200 in mid to late 1999, said Terrance Scott, spokesman for Boeing's Joint Strike Fighter program.

Boeing has a $660 million contract with the U.S. Department of Defense to design and build two demonstration versions of the Joint Strike Fighter - one that has conventional takeoff and landing capabilities, and one that can take off from a short strip and land vertically.

Some of the workers who will assemble Boeing's prototypes are already based in Southern California - either in the Antelope Valley or at Boeing's Seal Beach facilities. Some will be transferred from the company's Seattle headquarters or its facilities in St. Louis.

Many of the Southern California workers will be transferred from Boeing's B-1B bomber program, because orders for that plane have dropped off in recent years, Scott said.

"Rather than putting these people in the position of looking for new opportunities, they're right here. We're keeping them in the same basic geographical area," he said.

Scott said the primary motivation for doing assembly work on the two demonstration planes in Palmdale is the proximity of airstrips to construction facilities, meaning planes do not have to be shipped back and forth between the place they are built and the place they are tested.

"This was the most affordable place for us to do this work," Scott said.

Scott said no decision has been made yet about whether any work on the production model of the Joint Strike Fighter would be performed in the Antelope Valley if Boeing ultimately wins that contract.

"With regard to where that work would be done, we would reevaluate at that time when we won the contract," he said.

Lockheed Martin, on the other hand, already has said that if it wins the Joint Strike Fighter contract, it probably would not do its assembly work in the Antelope Valley, even though it, too, is doing subassembly and final assembly work on its demonstrator planes at its Skunk Works facility in Palmdale.

"The plan today is that the major manufacturing would be done in Fort Worth, (Texas)," said Ron Lindeke a Skunk Works spokesman.