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Gov. Brown approves Lockheed-Boeing tax-credit offer

Gov. Brown signs bill offering Lockheed-Boeing a $420-million tax break to build stealth bombers in California
Lockheed-Boeing offered 15-year tax credit to help Air Force build stealth bombers

Gov. Jerry Brown on Thursday put the finishing touch on a deal crafted with lawmakers to give aerospace giant Lockheed Martin Corp. a $420-million tax break if it helps build new stealth bombers in California.

Brown signed into law a bill by two Palmdale legislators — Democratic Assemblyman Steve Fox and Republican Sen. Steve Knight — to offer Lockheed and its partner, Boeing Co., an incentive to win a potential $55-billion Air Force contract for a fleet of up to 100 next-generation aircraft.

Lockheed said it would hire hundreds of new high-paid workers to do much of the work at the secret government Plant 42 in the high-desert city of Palmdale.

"California is open for business," Fox said. "This tax credit will help … gain and retain high-paying jobs for our people."

But the governor's signature on the bill, AB 2389, represents only part of the agreement worked out a week ago with leaders of the state Senate and the Assembly speaker's office.

The governor's office publicly committed to pass a second bill when the Legislature returns in August that would offer the same 15-year tax credit to the state's largest military contractor, Northrop Grumman Corp.

Northrop came late to the negotiating table with the governor's jobs and business development officials. But the company then complained vehemently that it should get the same state assistance as Lockheed.

The two groups, Lockheed-Boeing and Northrop Grumman, are the only expected bidders for the highly classified program to build the replacement for Northrop Grumman's 2-decade-old B-2 stealth bomber.

The compromise won bipartisan praise and votes in the Legislature because it would put the two contenders on equal footing and ensure the planes are manufactured in Palmdale with parts from elsewhere in California, no matter which military contractor ultimately wins the business.

marc.lifsher@latimes.com

Twitter: @MarcLifsher

Copyright © 2014, Los Angeles Times
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