STATE BATTLES FOR JET FIGHTER; BOEING MAY CHOOSE FACILITY IN ST. LOUIS.

Byline: Daily News Staff and Wire Services

The Seattle Post-Intelligencer is reporting that the joint strike fighter will be assembled in St. Louis if the Boeing Co. wins the competition over Lockheed Martin in three years, but California officials said Sunday they are working to see the fighter is built here.

Assemblyman George Runner, R-Lancaster, said that Boeing and Lockheed have been saying for some time that they were planning the work outside of California, but he believes this state is still in the running for the giant military project.

Runner said although Boeing may be leaning toward St. Louis and Lockheed Martin toward Ft. Worth, Texas, as assembly sites, the final decision will hinge on the most cost-effective location, the place with the most competitive economic environment.

``We still expect to bring this project to California,'' Runner said.

Palmdale Mayor Jim Ledford said he was hopeful Antelope Valley officials will be able to convince Boeing to change its mind.

``I think our prospects are good when you look at what we offer,'' Ledford said. ``We think it's cost effective to do it here.''

Aerospace companies have been known to change their minds about production sites. In the late 1980s, what was then Lockheed, now Lockheed Martin, had planned to produce its F-22 Raptor fighter at Palmdale, but then moved the production site to Georgia as part of a corporate restructuring.

In the early 1990s, what was then McDonnell Douglas, now part of Boeing, planned to produce the T-45 trainer jet in Palmdale, but then switched production to St. Louis.

Runner's district director Greg Matranga called the joint strike fighter project ``an incredible, stable economic opportunity for California'' and stressed that it represents a 20- to 25-year project worth $750 billion - the largest military contract in history. It could create 20,000 new aerospace jobs statewide, and for every aerospace job, it could create five to nine spinoff jobs, he estimated.

Intended to serve the Air Force, Navy, Marine Corps and British Royal Navy, the joint strike fighter will be the first fighter required to perform such multiservice roles.

The Navy wants a fighter that can land and take off from an aircraft carrier. The Marines and Royal Navy want a fighter that can replace Harrier jets, which are capable of short takeoff and vertical landing. The jet must also be stealthy so it can evade detection by air or ground radar.

The Defense Department plans to buy nearly 3,000 of the stealthy fighters by 2020.

According to the Seattle Post-Intelligencer, if Boeing wins the contract, some parts could be built in Seattle and shipped to St. Louis for final assembly, though that is still undecided.

``This is the biggest defense program out there in the entire world,'' said Bert Cooper, a military aircraft analyst with the Congressional Research Service in Washington, D.C.

Where Boeing would build its fighter should it win the competition has been the subject of much speculation because of the promise of thousands of aerospace jobs the project would mean.

California has lobbied hard behind the scenes to have the winning fighter entry built in the state, where the aerospace industry has been hard hit by defense consolidation.

An official announcement that Boeing has picked St. Louis for assembly of the joint strike fighter is expected soon and could be made Thursday when Boeing will reveal the next round of its facilities consolidation, sources told the Post-Intelligencer.

The Seattle newspaper said Boeing also is expected to announce Thursday that it will start a next-generation 737 production line at the underused Douglas factory in Long Beach.

Boeing is now building two demonstration joint strike fighters that will compete against two from Lockheed Martin.

Although sections of the demonstration fighters are being fabricated in Seattle and St. Louis, final assembly is taking place at Boeing's plant in Palmdale, which is also where the roll-out, ground testing and first flight will occur.

Subsequent flight testing will be at nearby Edwards Air Force Base and later at the Navy's Patuxent River test facility in Maryland, the Post-Intelligencer said.

The first Boeing demonstration fighter should be finished by late 1999 or early 2000. The second should roll out of the Palmdale plant a few months later.

The Pentagon is scheduled to select the winning design in spring 2001.

Lockheed Martin is also building its two demonstration fighters in Palmdale, at its famed ``Skunk Works'' plant.

Runner has introduced legislation that is part of the pending California budget package and has been endorsed by leaders of both parties.

He expects Gov. Pete Wilson to sign it with the rest of the budget.

Runner's legislation provides significant tax credits for the employees hired in California and for the machinery and equipment purchased for the joint strike fighter manufacturing process.

That incentive applies not only to the prime contractor, but also to the subcontractors across the state doing component parts for the aircraft. Subcontractors manufacture 60 percent to 70 percent of the airplane.

So even if final assembly is in Fort Worth or St. Louis, the legislation should help create significant work for California contractors, Runner said.

The legislation would create the first targeted tax incentive of this nature in the history of California, he said. It is designed to reduce the cost of doing business in this state and has been supported by a coalition of aerospace contractors and labor groups, Runner said.

It takes a percentage off the bottom line in the proposal the companies make to the Pentagon. It also reduces the cost of the contract they have to submit to the Pentagon. The Pentagon is really looking for who can make the best airplane at the cheapest price, he said.

``I believe that the passage of this credit will make a large difference in the future decision making of Boeing and Lockheed.''