Miltary spending and Boeing
Wed March 5, 2014
Defense Budget Excludes Boeing's F/A-18 Fighter Jets
Boeing’s F/A-18 fighter jet built in Hazelwood was left out of the Pentagon’s $496 billion proposed budget for fiscal year 2015.
With no additional funding for the Super Hornet and Growler jets the production lines are expected to shut down by the end of 2016, putting thousands of jobs at risk.
Boeing official said in a statement that they were disappointed.
The company called the aircraft "the backbone of the Navy’s carrier air wings" and said it would work with Congress to add funding for the jets.
It went on to say if production is not extended "the U.S. will be solely dependent on one tactical aircraft manufacturer for years to come." That manufacturer is Lockheed Martin.
Richard Aboulafia, vice president of Analysis with Teal Group Corp., said the chances are slim that Congress will find more money for the jets.
"Really not good at all," he said. "They’re making a compelling case for the strategic need [for the jets], but, on the other hand, in this budget environment finding the better part of $2 billion dollars is going to be tough."
Aboulafia said getting Congress to add money for the F/A-18 program will be further complicated because the company will have to lobby to have funding returned for some of its other aircraft, including the P-A Maritime Patrol.
"It took a really big hit in the budget, and that’s one of the highest priorities for new start defense program," he said.
Boeing’s vice president of F/A-18 and EA-18 programs, Mike Gibbons, told Reuters last week the company is considering slowing down production of the Growler from four per month to two.
That would keep the line open until mid-2017.
Aboulafia said that tactic only buys Boeing a few months. He said the company will have to make a decision by early next year at the latest in order to fund suppliers.
The analyst said he thinks the odds of a foreign country coming forward to order more jets before then are not in Boeing's favor.
Congress has to authorize and approve the Pentagon's budget. Defense Secretary Chuck Hagel is to testify before the Senate Armed Services Committee on Wednesday and the House Armed Services Committee Thursday.
Follow Maria on Twitter: @radioaltman
Planes and People
Economy & Innovation