The Pentagon's decision to cancel the $52 billion A-12 Stealth aircraft program is a major blow not only to the Navy but also to the project's two prime contractors and thousands of their workers now facing layoffs.
Defense Secretary Dick Cheney announced Monday that he ended the full-scale development contracts for the A-12, meaning work on the proposed radar-evading attack aircraft stops without one plane having ever gotten off the ground."It's gone, it's over," said Cheney's spokesman, Pete Williams.
It was the largest weapons program ever canceled by the Pentagon, Williams said.
The contractors were declared in default of the contract for failing to design and develop the wedge-shaped airplane on time and according to the Navy's specifications.
The A-12 development contracts are classified secret, but internal Navy and Defense Department reports released recently said the project had fallen more than 18 months behind schedule and at least $1 billion over budget. Just six months ago, Cheney told Congress the project was on sound footing and within its budget.
The program also is the subject of a federal criminal investigation.
General Dynamics Corp., which teamed with McDonnell Douglas Corp. on the A-12 development contract, said after Cheney's announcement that it would immediately begin laying off about 4,000 workers at plants in Fort Worth, Texas, and Tulsa, Okla.
In St. Louis, McDonnell Douglas said it notified 3,000 workers they would be laid off and that an additional 2,000 may be dropped.
General Dynamics also said it would fight Cheney's decision to declare the contractors in default of the contract terms. The companies have filed claims to recover $1.4 billion in extra development costs, which the Pentagon said it will not pay.
General Dynamics "is clearly not in default of the contract" and "would contest the default and pursue its rights for all work done and costs incurred on the program to date," said Chris Schildz, a company spokesman.
"I never thought this would happen. It's a complete shock. I don't know what I'm going to do," said Peggy Kramer, a McDonnell Douglas worker in St. Louis who expects to be laid off. She said she didn't find out about the decision until she got home and saw it on television.
The Navy wanted the A-12 Avenger in operation by the mid-1990s to replace its nearly obsolete fleet of carrier-based A-6 Intruder planes, and it told Cheney last Saturday that a government bailout of the contractors could save the program.
But Cheney decided to stop the project after determining that neither the contractors nor the Navy could say exactly how much government money would be needed to get the work back on schedule, Williams said.
"I do not believe a bailout is in the national interest," Cheney said in a statement. "If we cannot spend the taxpayers' money wisely, we will not spend it."