Boeing presses for new contract for Super Hornets

[tigershark]

Boeing presses for new contract for Super Hornets

 By Roxana Tiron
Posted: 03/18/08 06:01 PM [ET]

Boeing and its supplier companies are lobbying congressional defense committees to secure support for more Super Hornet fighter jets. 

Boeing has been eyeing the chance to sell more F/A18 E/F Super Hornets to the Navy for at least a year. But company officials are intensifying their push on the Hill this year, which they maintain is a crucial time to set the stage legislatively for a new multiyear contract buy of Super Hornets.

Next year, Boeing will reach the end of a five-year contract with the Navy for Super Hornets. The company is also slated to deliver another 89 aircraft to the Navy beyond the multiyear agreement. Those remaining airplanes will be delivered by 2012, when the domestic requirement for the Super Hornets would end.

The Navy is still in the process of figuring out the mix of aircraft it wants. Service officials could reach a decision this summer as they begin to outline the Navy’s budget for the next six years, starting in 2010.

Navy officials, including the chief of naval operations, have said that the service will face a shortfall of at least 69 fighter jets by 2016. Some predict that number could go as high as 200.

It isn’t clear whether the Navy will buy still more Super Hornets to meet that shortfall. “We are looking at all strategies,” said Capt. Mark Darrah, the program manager for the F/A 18 and EA-18 G (Growler), at the Navy League’s annual conference on Tuesday.

Boeing officials believe the Navy may need even more fighters than it currently projects. The shortfall assumptions are “fairly optimistic,” said Bob Gower, Boeing’s vice president for Boeing’s F/A 18 programs. 

The Navy bases its fighter needs on three assumptions: that older versions of the F-18 will fly for another 10,000 hours and won’t need to be replaced with the Super Hornet; that the Navy’s variant of the new Lockheed Martin -built Joint Strike Fighter will be ready in 2015; and that the Navy will be able to buy 50 JSFs a year, according to Gower.

Given the uncertainty, Boeing is offering to combine the remaining 89 Super Hornets the Navy already plans to purchase with the remaining 69 aircraft — the number projected as the shortfall — under a new multiyear contract. The contract would start in 2010 and extend for four years.

Boeing argues the Navy would save 10 percent by buying the aircraft under a multiyear contract versus buying the planes on an annual basis. Under the current five-year contract, Boeing is projecting to save the Navy about $1 billion. The Navy is buying 42 Super Hornets a year under that contract.

A new multiyear deal will require an OK from Congress. 

“We are looking for [fiscal year] ’09 permissive language that the Navy may enter into a multiyear,” said Gower.

Boeing is also seeking about $100 million to research and develop ways to lower the overall cost of the aircraft in the future.

In a show of force last month, Boeing brought its supplier companies to the Hill to press the case for another extended contract with the Navy. The companies visited 90 congressional offices, focusing mostly on the defense committees. Suppliers for the Super Hornet include Raytheon , Northrop Grumman , Honeywell , Rockwell Collins and ITT Industries .

The stakes are high for Boeing. The company fears that it could be inched out of the domestic fighter jet business if the Navy does not buy more Hornets after 2012. Boeing and Lockheed are the only two U.S. fighter assembly companies.

Lockheed beat Boeing in the competition to build the JSF and stands to see work from that win for several decades. Boeing is a subcontractor for the JSF. It is also the prime contractor on the Air Force’s F-15, but that fighter is also slated for termination over the next several years.

Boeing officials fear that by the time the Navy or Air Force want a new strike fighter or bomber, there will be only one company with the design, engineering and production capability left to step up to the plate — and it will not be Boeing.

The company has been making this case on Capitol Hill, where some lawmakers have already expressed similar concerns about an erosion of the domestic defense aerospace industrial capabilities.

The Super Hornet is expected to share carrier decks with the JSF until 2030. Boeing is also pursuing international sales for the fighter jet. The Australian government on Monday committed to buying 24 Super Hornets.

Link
http://thehill.com/index2.php?option=com_content&task=view&id=72165&pop=1&page=0&Itemid=32