Northrop Corp.'s announcement that it is halting work on its F-20 fighter-plane program is a disappointment for the big California defense company, but not a financial disaster. Northrop is already developing the super-secret, radar-evading "stealth" bomber. And just last month it got a $691-million prototype development and demonstration contract from the Air Force that puts the company in a good position to compete for the leading role in a multibillion-dollar advanced-fighter program a few years down the road.
The death of the F-20 project is bad news for the taxpayer, however, because of what it says about the mind-set in the Pentagon.
The F-20 program began in the late 1970s, when the Carter Administration decided that too many Third World countries were spending money that they couldn't afford for fighter planes that were too expensive to maintain and too sophisticated for their needs. U.S. defense companies were encouraged to develop a cheaper high-performance fighter specifically for purely commercial sale to such countries.
Northrop, taking Washington at its word, invested more than $1 billion of its own money--almost unheard of in the defense business--and produced the F-20 Tigershark without benefit of a government contract. Whereupon the Reagan Administration, with its supposed dedication to competitive enterprise, came into office and proceeded to undercut Northrop by pushing sales to Third World customers of F-16s, which had come up through the Pentagon bureaucracy's standard design and acquisition process.