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Lockheed gets plane order of $4 billion from Pentagon

WASHINGTON (Bloomberg) — Lockheed Martin Corp., the largest U.S. military contractor, won a $4.1 billion order from the Pentagon for 60 C-130J transport airplanes.

Lockheed will get about $272 million immediately to deliver four of the aircraft to the Marines, the U.S. Defense Department said in a prepared statement. Lockheed will provide a total of 40 Air Force and 20 Marine Corps versions of the aircraft through 2009.

The contract is the largest for the C-130J and will ensure that the program is profitable. Lockheed developed the C-130J in the early 1990s to replace the C-130 Hercules, the world's most widely used aircraft for hauling troops, cargo and armored vehicles. The Pentagon's top tester has said the new version is unreliable.

Europe's Airbus SAS had sought to supply the U.S. government with its A400M transport aircraft. Robert Stevens, Lockheed's president, said Wednesday he expected to win the order.

Lockheed has contracts for 118 C-130Js, dubbed "Super Hercules," and needs to sell 120 to turn a profit on the program. It has delivered 94 and has agreements with the U.S., the U.K., Italy, Australia and Denmark. Rolls Royce Plc's Defense North America unit, based in Indianapolis, provides the engines.

The Pentagon's director of equipment testing, Thomas Christie, said last month that the C-130J isn't reliable and may be too vulnerable to small arms fire. Christie, Pentagon Director of Operational Test and Evaluation, said the plane has deficiencies in hardware and software and hasn't met "required measures" of "effectiveness and suitability.'

Lockheed said most of the problems are fixed; the Air Force says they're being worked on and is confident they'll be solved.