In the news...

July 7, 2014

California lawmakers OK stealth bomber tax break

Don Thompson
Associated Press

A corporate battle over a giant Pentagon contract to build stealth bombers spilled into the California Legislature July 3, as lawmakers grudgingly rushed through a $420 million tax credit for an aerospace contractor before adjourning for their month-long summer recess.

The 15-year tax incentive would benefit one of the two major competitors, a joint bid being submitted by Boeing and Lockheed Martin.

That has angered the other bidder for the $55 billion federal contract, Northrop Grumman, which says it cannot offer a low enough bid without a similar tax break. Gov. Jerry Brown, who pushed for the tax credit, and Democratic legislative leaders promised to consider a similar incentive for Northrop after the Legislature returns in August.

Lockheed Martin says the incentive would mean 1,100 California jobs should it win the contract, including 750 new jobs and 350 that would be retained.

But Northrop Grumman said it would create 1,500 new jobs in Palmdale should it win the contract, even without the tax subsidy. A company spokesman said giving the break to Lockheed Martin puts Northrop Grumman at a competitive disadvantage, the situation lawmakers pledged to correct next month.

Northrop Grumman, California’s largest aerospace employer, is extremely disappointed that the legislation passed today in California favors only one aerospace company, the company said in a statement after the vote. This is a significant blow to fairness in California’s aerospace industry.

The bill limits the tax credit to a subcontractor, which benefits Lockheed as a subcontractor to Boeing. Northrop is its own contractor, so it wouldn’t qualify.

The company looks forward to working with lawmakers in August to secure a similar subsidy, spokesman Tim Paynter said. What we really want is a level playing field, he said.

Brown’s office and Boeing declined comment. There was no immediate comment from Lockheed Martin.

The bill, AB2389, passed the Senate with one vote to spare after hours of heated debate in committee and on the floor, as senators complained that they were being asked by Brown to pass the bill with a two-thirds majority just four days after it was presented to them. It had broader support in the Assembly, where it was approved 68-2.

I feel like this is a jam-job and this is a game of chicken, said Sen. Kevin de Leon, chairman of the Senate Appropriations Committee, which voted to send the bill to the full Senate.

The Los Angeles Democrat said California is competing for the aerospace jobs with Alabama, Florida, Texas and other states, but he wasn’t happy about the last-minute process of considering the tax credit.

Yet he and others who voted for it said the gain in jobs would more than offset the subsidy.

Sen. Ted Gaines, R-Roseville, said projections are that there would be a net gain to the state budget of $80 million to $500 million over the life of the tax incentive if the jobs stay in California.

This measure affects the industry that has helped build California, said Sen. Steve Knight, R-Palmdale, who sponsored the bill in the Senate. For the last 80 to 100 years, no state, no region in the world has had the impact on aerospace that California has. Now, Dayton, Ohio, can have their bicycle shop, and North Carolina can have the site of the first powered, controlled flight. But California’s imprint on aerospace is unparalleled, and today we have an option, an option to move the ball forward, an option to keep aerospace in California, an option to be competitive.

Opponents led by Sen. Ben Hueso, D-San Diego, argued that the money would better go to schools, road construction and other programs that would serve businesses and residents across California. There is no need to give either firm tax-funded subsidies on top of the Pentagon’s profitable taxpayer-funded defense contract, he argued.

There is so much need in our state, and there is so much poverty in our state, Hueso said. This is just more corporate welfare.




All of this week's top headlines to your email every Friday.


 
 

 

Headlines October 22, 2014

News: Northrop challenges 3DELRR contract award - Northrop Grumman has formally issued a protest against the US Air Force’s decision to award its next-generation ground based radar to competitor Raytheon.   Business: Defense firms prefer GOP, but spread campaign cash between political parties - For every campaign contribution from a major arms manufacturer to a Republican candidate...
 
 

News Briefs October 22, 2014

Military converges on scene of Kansas jet crash Military personnel are investigating at the site in southeast Kansas where an Oklahoma Air National Guard fighter jet crashed after a midair collision with another one during a training exercise. The F-16 crashed Oct. 20 in a pasture about three miles northeast of Moline, an Elk County...
 
 
Courtesy photograph

Upgrades ‘new normal’ for armor in uncertain budget environment

Courtesy photograph The current Paladin is severely under-powered and overweight so its speed of cross-country mobility is pretty restricted. The Paladin Integrated Management program is designed to address a number of these we...
 

 

ISR: A critical capability for 21st century warfare

The progressive adaptations and breakthroughs made in the intelligence, surveillance and reconnaissance arena have changed the way wars are fought, and the way commanders think about the battlespace. “Whether we have airmen exploiting full motion video data or serving downrange in the (Central Command) area of responsibility, these individuals make up an enterprise of 30,000...
 
 

Lockheed Martin teams with Roketsan of Turkey on new standoff missile for F-35

Roketsan and Lockheed Martin signed a teaming agreement Oct. 22 for collaboration on the SOM-J, a new generation air-to-surface Standoff Cruise Missile for the F-35 Lightning II. The SOM system is an autonomous, long-range, low-observable, all-weather, precision air-to-surface cruise missile. The SOM-J variant is tailored for internal carriage on the F-35 aircraft. The companies will...
 
 

Army Operating Concept expands definition of combined arms

The Army Operating Concept, published Oct. 7, expands the idea of joint combined-arms operations to include intergovernmental and special operations capabilities, said Gen. Herbert R. McMaster Jr. The new concept includes prevention and shaping operations at the strategic level across domains that include maritime, air, space and cyberspace, he said. It’s a “shift in emphasis,”...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>