The U.S. Congress has given Boeing Co. (BA:US)’s Super Hornet fighter jet a lifeline, at least for now.
The omnibus federal spending measure contains a down payment of $75 million for 22 of the fighters that the Navy didn’t request.
The funding, signed into law on Jan. 17, will prod Navy officials to decide this year whether to spend as much as $2 billion for the unplanned planes as a hedge against delays of the F-35 Joint Strike Fighter.
At stake is Boeing’s staying power as a producer of fighter jets alongside Bethesda, Maryland-based Lockheed Martin Corp. (LMT:US), which builds the F-35 for the Navy, Marine Corps and Air Force. Any additional orders from the Navy could serve as a buffer as Boeing works to attract new customers in Europe, the Middle East and Canada.
“With some of the bumps in the road with the Joint Strike Fighter this is a very important line to keep open,” New Jersey Republican Rodney Frelinghuysen, the chairman of the House Appropriations Defense Subcommittee, said in an interview.
The additional $75 million is “a great sign from Congress that they understand the importance of the line,” Mike Gibbons, Boeing’s vice president for the program, said in a telephone interview. He said the Super Hornet is “very important” for continued competition and industrial base expertise.
The money could give Chicago-based Boeing a fighting chance to keep its St. Louis, Missouri-based production line open beyond 2016. The plant is where the F-18 E/F Super Hornets and an electronics-jamming version of the aircraft called the E/A-18 Growler are built.
Missouri’s senators, Claire McCaskill and Roy Blunt, make the case for the Super Hornet on lower cost, more options for the Navy’s fleet of tactical aircraft and employment in their state.
“What’s really important is, if you look at the squeezing of the budget, that we have a blend since it’s half the price” of the F-35, McCaskill, a Democrat, said in an interview.
Blunt, a Republican, warned against fighter shortfalls on Navy carriers if the Pentagon doesn’t order more planes.
He wrote in an Oct. 31, 2013 editorial in the St. Louis Post-Dispatch that the shortfall would leave “many American aircraft carriers without combat aircraft — like a bow without arrows.”
The Super Hornet program supports about 90,000 direct and indirect jobs and has 1,900 suppliers across the U.S., according to Boeing. The company estimates the program contributes about $6 billion to the U.S. economy. Suppliers include Northrop Grumman Corp. (NOC:US), which makes the aft and center fuselage; General Electric Co. (GE:US), which produces the engines; and Raytheon Co. (RTN:US), which supplies the radar.
The Navy’s decision to buy more Boeing aircraft depends on the wear and tear of its older fighter jets, and whether it projects an unmanageable shortfall of tactical aircraft on its aircraft carriers a decade from now. As a result of the Navy scaling back flight hours in 2012 and 2013, its most up-to-date analysis shows a shortfall of fewer than 30 aircraft.
Boeing builds two Super Hornet versions -- the single-seat E model and the two-seat F model. F-18s have been in service with the Navy since November 1999. The Navy’s first operational squadron of Super Hornets was formed in 2001.
The Navy plans to retire older versions of the F/A-18 and shift to a combination of Super Hornets and carrier-based F-35s. The Marines envision a strike-fighter fleet solely comprising its F-35 version -- designed for short takeoffs and vertical landings -- and carrier-based jets once it can no longer extend the life of its Hornets and Harrier aircraft.
Boeing plans to scale back production from four aircraft to three aircraft a month, which would take production through the end of 2016, Gibbons said. Under current plans, Boeing will have delivered 135 Growlers and 563 Super Hornets to the Navy by the end of 2016. Australia also plans to buy 12 Growlers. Boeing has delivered 24 Super Hornets to that country.
Keeping the production line open by trickling domestic orders may become even more important for Boeing after it lost a $4.5 billion Brazilian fighter jet competition to Sweden’s Saab AB (SAABB) in December. Boeing now is looking at potential new fighter contracts in Denmark, Canada and Kuwait. Other countries also could buy Super Hornets as they plan to replace their Lockheed F-16 aircraft with newer jets, Gibbons said.
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