The Navy's fiscal 2015 budget plan omits funding for any extra
F/A-18E/F Super Hornets or EA-18G Growlers, according to several
sources familiar with the issue. The White House is due to submit
its 2015 budget request to Congress on March 4.
While the 2015 budget does not include funding for shutting down the
F/A-18 production line in St. Louis after 2016, the Navy plans to
add such termination funding to its 2016 budget, said one of the
sources, who could not speak publicly.
That spells bad news for Boeing, which needs additional orders from
the U.S. Navy to continue producing the fighter planes, according to
industry executives and analysts.
Navy officials have said they would like to keep buying Super
Hornets and Growlers, but cannot afford to do so given tough budget
pressures that have already forced the service to propose
eliminating one of 11 U.S. aircraft carriers.
That means Boeing must now appeal to U.S. lawmakers to fund an
additional batch of Growlers to keep the line running for one more
year while it continues to hunt for foreign sales.
The program has strong support among lawmakers but a dearth of
funding for aircraft carriers and other priorities may complicate
Boeing's efforts. Many traditional defense hawks have also died or
left Congress, and many current lawmakers are more worried about
deficits than maintaining defense spending.
Boeing officials declined comment, noting that the fiscal 2015
budget has not been released. But the company is already airing
advertisements on a local Washington radio station and its lobbyists
are working their connections on Capitol Hill.
Boeing contributed $1.3 million to individual lawmakers and
political action committees in 2013 and spent $15.2 million on
lobbying efforts, ranking as the 13th biggest spender, according to
the Center for Responsive Politics.
Boeing's F/A-18 program manager Mike Gibbons has said the company
needs to build about two planes a month to keep costs down, which
would require extra funding of at least $$1.2 billion, but Boeing is
studying possible savings by combining the F/A-18 and F-15
production line, which runs through 2018.
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Industry experts note Lockheed Martin Corp <LMT.N> builds just one
F-16 a month at its Texas plant and say Boeing may be able to
maintain F/A-18 production at a lower rate.
Boeing remains in competition for orders from Canada and Denmark,
and sees other prospects in the Middle East. But none of those
foreign orders are likely to materialize in time to maintain the St.
Louis F/A-18 line past the end of 2016.
Boeing and U.S. officials had hoped to land a big F/A-18 order from
Brazil, but Brazil in December said it would buy the Gripen built by
Sweden's Saab <SAABb.ST> after documents leaked by former National
Security Agency contractor Edward Snowden revealed U.S. spying on
Brazilian President Dilma Rousseff.
Brett Lambert, a former top Pentagon official, said lawmakers still
viewed F/A-18 purchases as a hedge against possible delays in the
F-35 fighter jet program, although he said the program was more
stable than just a few years ago.
Proponents of additional F/A-18 purchases argue that the F-35 has
not completed development, and that continued issues with its
software development could delay the ability of the Marine Corps to
start using the plane in combat from mid-2015.
(Reporting by Andrea Shalal-Esa; editing
by Lisa Shumaker)
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