Business

November 30, 2012

Boeing hopes defense cuts would spare tanker

Joshua Freed
Associated Press

Boeing expects its new tanker for the U.S. Air Force to be untouched by cuts in defense spending next year, its top defense executive said Nov. 29.

Defense contractors have been getting ready for automatic defense cuts that are a part of the so-called fiscal cliff that starts in January if Washington lawmakers can’t strike a budget deal. Those cuts total $55 billion for next year and about $500 billion over 10 years.

That would be on top of $500 billion in cuts to projected spending over 10 years that President Obama and congressional Republicans already agreed to last year.

Nearly half of Boeing’s revenue comes from defense and space programs.

Boeing has tried to plan for a worst-case scenario of $1 trillion in cuts over 10 years, said Denis Muilenburg, who runs its defense business. However, the company expects the actual cuts to be more like $750 billion, he said.

“We’ve been taking aggressive actions on workforce reductions, facility reductions, and other affordability actions, to protect ourselves against that worst-case scenario,” he said.

One of Boeing’s major defense projects is a new aerial refueling tanker for the Air Force. Even if there are spending cuts, “I think actions will be taken to protect the schedule on the tanker, and to keep it at a full funding level,” Muilenberg said.

To make up for declining Pentagon spending, Boeing has been trying to get more overseas business. For example, it’s selling F-15 fighter jets to Saudi Arabia. This year, international customers will account for more than 25 percent of Boeing’s defense business, Muilenberg said, up from 7 percent five years ago. He sees that running at 25 percent to 30 percent in future years.

The company is also looking for more overseas customers for its C-17 military cargo plane. India has ordered 10, with its first plane due this summer. Boeing has been delivering C-17s to the U.S. Air Force for 21 years, but has just five more to deliver on an order of 223.

Boeing has slowed production to 10 cargo planes per year, down from 15, Muilenberg said. At the slower rate it has enough orders to keep the Long Beach, Calif. assembly line running through the third quarter of 2014, he said. Boeing is aiming to get orders to keep it running longer than that, he said.




All of this week's top headlines to your email every Friday.


 
 

 
DOD photograph by Air Force MSgt. Adrian Cadiz

Carter announces manufacturing initiative to aid war fighters

DOD photograph by Air Force MSgt. Adrian Cadiz Defense Secretary Ash Carter announces the creation of a National Manufacturing Innovation Institute to produce hybrid electronics during a speech at the National Full Scale Aerody...
 
 

U.S. Army awards CIRCM contract to Northrop Grumman

The U.S. Army Aug. 28 awarded Northrop Grumman a $35,372,762 cost-plus-fixed-fee, fixed-price incentive, and firm-fixed-price hybrid contract with options for engineering and manufacturing development and low-rate initial production of the Common Infrared Countermeasure program. Work will be performed at Northrop Grumman’s Land & Self Protection Systems Division facility in Rolling Me...
 
 

Northrop Grumman awarded position on Air Force training systems acquisition III contract

The U.S. Air Force has awarded Northrop Grumman a position on the Training Systems Acquisition III indefinite delivery/indefinite quantity contract to support war fighter training systems at global U.S. Air Force operating locations. Twelve companies have been awarded positions on TSA III, which has a ceiling value of approximately $20.9 billion over 10 years, if...
 

 
Navy photograph

Raytheon and U.S. Navy collaborate to optimize minehunting sonar

Navy photograph The Remote Minehunting System and AN/AQS-20A Minehunting Sonar on USS Independence. Raytheon is working closely with the Naval Undersea Warfare Center — Division Newport to enhance the features of the comp...
 
 

Boston Engineering receives Air Force contract to advance UAV motor control capabilities

Boston Engineering today announced a $150,000 contract from the U.S. Air Force to enhance its UAV capabilities and to also reduce drone noise. Specifically, Boston Engineering will demonstrate an embedded motor control platform to accelerate U.S. Air Force UAV research and development initiatives. Embedded motor controllers underpin critical UAV operations including drone propulsion and sensors...
 
 

Boeing receives $1.49 billion contract for 13 P-8A Poseidon ircraft

Boeing will provide the first P-8A Poseidon maritime surveillance aircraft for Australia and additional P-8As for the U.S. Navy following a $1.49 billion contract award from the Navy for 13 aircraft. The order includes nine aircraft for the U.S. Navy and four Poseidon aircraft for the Royal Australian Air Force, a long-time partner to the...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>