March 3 (Bloomberg) -- Factory worker Paul Bartholomew shapes titanium in one of the first steps of building each Lockheed Martin Corp. F-22 fighter jet. Jobs like his may be in peril if President Barack Obama decides by April to stop building the warplane.

“We could lose 100 people” if the program ends, said Bartholomew, 48, president of the United Steelworkers Union Local 2285 in Grafton, Massachusetts. Co-workers at Precision Castparts Corp.’s Wyman-Gordon forge, a 1 million-square-foot plant 40 miles west of Boston, ask him about their future.

Obama’s administration is weighing whether to stop buying the most advanced U.S. fighter jet at the 183 planes on order, leaving a three-year gap until the new F-35 reaches production. Pressing in Congress and full-page newspaper ads to keep the F-22 alive, Lockheed and its suppliers including Boeing Co. say a shutdown will ripple through 44 states and hurt 1,000 companies and 95,000 workers.

The pressure pits Obama’s plans to save or create 3.5 million jobs during a recession against his desire to rein in Pentagon spending. Defense Secretary Robert Gates, hired by President George W. Bush and kept on the job by Obama, opposes extending F-22 production.

“Lockheed is going nuts trying to keep the line open,” said Winslow Wheeler, an analyst at the Center for Defense Information policy group in Washington. “Defense contractors always use the jobs issue.”

For Bartholomew’s co-workers at Wyman-Gordon and his counterparts at other F-22 suppliers that do the earliest-stage work on parts for the jets, the decision may determine whether they keep their jobs or full workweek.

F-22 to F-35 Transition

The F-22 is the most expensive aircraft in U.S. history at $354 million each in inflation-adjusted dollars that amortize 20 years of research and development. The U.S. Air Force supports keeping the line open, saying it will need 60 more F-22 fighters to equip a full fleet.

Conceived in the early 1980s as a radar-evading, advanced dogfighter to take on the Soviet Air Force, the F-22 was recast in the early 1990s to take on ground targets as well. That overlaps the mission of the upcoming F-35 Lightning II, also built by Lockheed, whose development began in early 1990s as a multi-role airplane to replace older fleets.

Stealth Features

The U.S. Air Force’s F-22 is designed primarily to be the first sent into battle to take down air and ground defenses, helped by its more advanced stealth capabilities that give it a radar signature roughly the size of a bumblebee, according to Lockheed. The F-35 -- known as the Joint Strike Fighter -- is designed to perform multiple missions for the U.S. Navy, Air Force and the Marine Corps. Such missions include dogfights and ground strikes.

Gates said last year that he doesn’t see the need for any additional F-22s than the 183 on order.

“The reality is we are fighting two wars in Iraq and Afghanistan, and the F-22 has not performed a single mission in either theater,” Gates told the Senate in February 2008. Based on the risk of a conflict against a major power “over the next four or five years, until the Joint Strike Fighter comes along, I think something along the lines of 183” F-22 aircraft is reasonable, he said.

The Pentagon plans to build as many as 2,456 F-35s for the U.S. military and eight international partners.

‘Bridging the Gap’

“Our anticipation was there would be a gradual slowdown of F-22 and ramp up” of the F-35, said Frank Bamford, a spokesman for Worcestershire, England-based GKN Plc, one of the subcontractors. “But the JSF still remains at low production levels and we don’t get significant volume until 2016, 2017, so bridging the gap and maintaining skills is critical.”

A GKN plant in Kent, Washington, does electron-beam welding of structures -- some of them from the Wyman-Gordon forge --that hold the F-22’s horizontal and vertical tail planes, Bamford said. Each fighter is worth about $5 million in sales to the company that also makes the jet’s canopy.

“About 350 to 400 people are directly affected by the program,” he said.

The Wyman-Gordon forge gets its milled titanium from the Niles, Ohio-plant of RTI International Metals Inc. Pittsburgh- based RTI has been supplying the F-22 program since Lockheed won the contract in 1991, spokesman Richard Leone said in an interview.

‘No Smooth Transition’

“If the program goes away and we do no more F-22s and there’s no smooth transition to the Joint Strike Fighter, about 50 manufacturing jobs at Niles could be impacted,” Leone said. The likely result is reduced hours for the workers, he said.

Arcturus Manufacturing Corp., a machine shop in Oxnard, California, may lose as much as 15 percent of its business if the F-22 production is curtailed, sales manager Patrick Dugan said. Arcturus employs 46 people and had $19 million of shipments in 2008.

“I’ve got to bridge that with something else,” said Dugan, who has written to Obama and to California’s lawmakers, asking them to keep the plane going. “We are committed to not laying off people.”

About 200 U.S. lawmakers and governors of 14 states have asked Obama to keep making F-22s.

“If you’re looking for stimulus and to stop the bleeding and job losses, step one is to stabilize the current situation,” Larry Lawson, Lockheed’s F-22 program manager, said in an interview. “Our point is you’ve got an ongoing production line that if you shut it down, no kidding, we would start laying people off both in our supply base and at Lockheed Martin.”

California Jobs

California has the most jobs tied to the program at 20,400, followed by 11,000 jobs in Texas and 8,800 in Georgia, said Sam Grizzle, a Lockheed spokesman. The biggest impact on jobs will be in 2010 and 2011 when the last plane on order leaves assembly, he said.

Rob Stallard, an analyst at Macquarie Capital Inc. in New York, said in an interview that an additional 60 planes may mean $2 billion to $3 billion in revenues for Lockheed and “add to its earnings in outyears beyond 2011.” He rates the stock “outperform.”

Defense Budget Reform

The Obama administration faces a $1.17 trillion budget deficit in the fiscal year starting Oct. 1, according to the $3.55 trillion budget sent to Congress on Feb. 26. To meet his promise of reducing the deficit in half by the end of his first term, Obama told Congress that among other areas, he would “reform our defense budget so that we’re not paying for Cold War-era weapons systems we don’t use.”

Those concerns may overshadow the need to protect F-22 jobs, said Gordon Adams, a professor of international relations at the American University in Washington who considers defense spending to be “lousy stimulus” because of the long lead times on weapons development.

“Does F-22 employ people?” Adams said. “You bet. Does it employ 95,000 people? I doubt it because contractors always maximize job implications.”

Bartholomew, whose employer Precision Castparts books $3.5 million in sales on each F-22, said he just hopes that “people in Washington make the right decision.”

Lockheed fell 61 cents to $59.35 at 4 p.m. in New York Stock Exchange composite trading. The stock has declined 43 percent in the last 12 months.

To contact the reporters on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net. Edmond Lococo in Boston at elococo@bloomberg.net.

Last Updated: March 3, 2009 16:58 EST