Gov. Hutchinson signs Lockheed handout and presidential primary move | Arkansas Blog

Friday, May 29, 2015

Gov. Hutchinson signs Lockheed handout and presidential primary move

Posted By on Fri, May 29, 2015 at 11:57 AM

click to enlarge DOLLARS FOR LOCKHEED: Gov. Hutchinson signs the $87 million corporate welfare handout for Lockheed Martin, whose annual profit exceeds Arkansas's general revenue budget.
  • DOLLARS FOR LOCKHEED: Gov. Hutchinson signs the $87 million corporate welfare handout for Lockheed Martin, whose annual profit exceeds Arkansas's general revenue budget.
Gov. Asa Hutchinson invited press to bill signings today for the $87 million corporate welfare handout to Lockheed Martin to aid its bid to win a federal military vehicle contract and other bills from the special legislative session that concluded Thursday.

He said he was sure the money for Lockheed would create new opportunities for the state. He also said "we would not have had a chance if the legislature had not provided competitive pricing."

In other words, Lockheed couldn't compete on price with two other competitors without a subsidy from Arkansas. I raise my lonely voice again — with the odd and uncomfortable support of the Koch political machine — to ask is it not insanity that one of the country's poorest states is subsidizing a U.S. government defense contract? Yes, Arkansas will get some jobs, but at the cost of a huge additional burden to taxpayers and the payback will be slight — non-existent a consultant says for the first 20 years.

No matter. The governor said Lockheed and Arkansas are "in the ballgame in a competitive way."

On other matters, he countered criticism of bringing up the primary election switch — from May to March in 2016 — was not really a new issue. He said it had been debated fully in the regular legislative session when it failed despite his support.

He said he didn't expect another special legislative session this year, but next year could be different after a task force completes study of what, if any, changes are necessary in the state's private option expansion of Medicaid under Obamacare and other elements of health insurance coverage in Arkansas.

ALSO: A defense industry publication is keeping watch on the proceedings. Says Breaking Defense:

In this race with two traditional truck-makers, high-tech Lockheed is the high-risk choice. Lockheed partner and veteran ground vehicle manufacturer BAE built the team’s JLTV prototypes in Sealy, Texas, but now Sealy’s shut down and the entire line removed to Camden, where it’s been upgraded and reassembled. Lockheed’s built missiles and munitions at Camden since 1981, but it only turned on the ground vehicle line last fall. Lockheed argues all this newness is to its advantage: It has the most cutting-edge technology and manufacturing processes to build an affordable vehicle with Humvee-level mobility and MRAP-level protection.

Lockheed tells the publication that Arkansas's decision to provide $87 million of the $125 million it would have to spend in Camden makes its bid more competitive. No doubt. 

The harder problem is convincing the Pentagon to pick Lockheed. With each competitor’s ability to manufacture JLTV affordably a major factor in that decision, Lockheed’s hoping the decision in Arkansas will help sway the one in Washington.

At the news conference, Hutchinson emphasized that Lockheed wasn't guaranteed to get the job. But he said his sources in Washington assured him the state's prospects were good, particularly with the $87 million contribution.

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