Ending months of suspense, Israel announced Thursday that it will buy 20 F-15E fighters from McDonnell Douglas Corp. for $2 billion instead of acquiring Lockheed Corp.'s F-16.
"This is a great day for McDonnell Douglas and the F-15 program," said John P. Capellupo, McDonnell's executive vice president.
The Israeli order was a major blow to Calabasas-based Lockheed, which had lobbied hard to sell Israel 42 of its F-16 fighters. Lockheed Chairman Daniel M. Tellep had personally met with Israeli Prime Minister Yitzhak Rabin to push the F-16.
McDonnell's victory will have little, if any, impact on aerospace employment in Southern California. McDonnell builds the F-15E at its headquarters in St. Louis, and Lockheed assembles the F-16 in Ft. Worth.
Nonetheless, Lockheed hoped an Israeli order would help extend the life of the F-16 because the U.S. Defense Department has said it will not buy any more of the planes after this year. Lockheed still has a backlog of about 600 orders for F-16s, enough to keep production going through most of this decade.
"We are disappointed," Gordon England, president of Lockheed's Ft. Worth division, said. "We don't understand the decision criteria, since it apparently wasn't based on price or performance."
The Israeli Embassy in Washington issued a statement noting that the order "ends the long and challenging process of evaluation" of the two jets, including comparisons of their cost and performance.
But the embassy did not say what factors gave the F-15E the edge, and officials of the embassy and Israel's Defense Ministry declined to elaborate. The order, which is being financed by U.S. grants to Israel, includes both the jets and support equipment.
The battle for Israel's order took on added importance over the past year because, as defense spending keeps dropping worldwide, it looked to be the last foreign order for U.S. fighters of its size for some time.
McDonnell appeared to have the sale locked up last fall, in part because the F-15 can fly the long distances Israel wants to reach potential enemies such as Iraq.
But Lockheed, aided by the Tellep-Rabin meeting in November, persuaded Israel to give Lockheed time to compete with a newly configured F-16 that also had a longer range.
In buying the F-15E instead, Israel followed Saudi Arabia's order of 72 F-15s in 1992, and the Saudi deal probably contributed to Israel's choice, Reich said. But he said the F-15 won mainly because it has two engines--compared to the single-engine F-16.