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 Dan Gillian, who runs Boeing's F/A-18E/F and EA-18G electronic
attack jet programs, told Reuters the company would decide in coming
weeks whether to buy titanium and other materials needed to start
work on the jets, even before the Kuwait deal and potential U.S.
Navy orders are finalized.
He said Boeing would weigh strong expected demand for the warplanes
against the risk that the orders could still fail.
Delays in orders for the jets mean Boeing must decide whether to
invest hundreds of millions of dollars into the F/A-18 program, even
as its commercial division faces job cuts and a federal
investigation into whether it properly accounted for two jetliners,
the 747 and 787.
"Based on the demand signals we see today, I’m confident that we’ll
be building F/A-18s into the 2020s," said Gillian, who spoke to
Reuters on Thursday before news of the accounting probe broke.
Gillian said Boeing was encouraged by the U.S. Navy's proposed
funding to buy two F/A-18E/F Super Hornets in a supplemental war
budget and 14 more jets in the fiscal 2018 base budget.
Boeing has slowed production from three planes a month to two
planes, and needs the Kuwait order to be finalized soon to keep
production going until the Navy's expected fiscal 2018 orders,
Gillian said. Analysts have said the Kuwait order could be worth
more than $3 billion to Boeing.
The U.S. Navy may also add a dozen more F/A-18 fighter jets to its
list of "unfunded priorities" in fiscal 2017, a document used by
lawmakers to adjust funding in the Pentagon's annual budget request,
according to a U.S. official and industry sources who were not
authorized to speak publicly.
Congress approved a similar request last year to help the Navy deal
with a shortfall in carrier-based fighter. Lawmakers ultimately
added $1.1 billion to the Navy's fiscal 2016 budget to buy five
F/A-18E/F Super Hornets and seven EA-18G Growlers.
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Gillian said current Navy orders will keep the St. Louis plant
running through June 2018, but the line could continue into the
early 2020s if the additional Navy and Kuwait orders are approved.
That would put Boeing in a stronger position to compete for
potential orders from Finland, Belgium, Spain and Denmark, he said.
The Kuwait Super Hornet order and a separate Boeing F-15 sale to
Qatar have both stalled as the Obama administration negotiates a
10-year agreement with Israel on U.S. military aid.
U.S. defense officials, including Navy Secretary Ray Mabus, have
raised concerns about the slow pace of arms sales approvals, and
particularly the Kuwait F/A-18 sale, given the consequences for the
industrial base.
Delays have prompted Qatar to halve its expected purchase of F-15s
and pursue a separate deal with France's Dassault Aviation <AVMD.PA>
for 24 Rafale fighter jets, according to sources familiar with the
matter.
For its part, Kuwait has said it is sticking to plans to buy both
the Boeing planes, and a separate deal for 28 Eurofighter jets. U.S.
sources had expected the Boeing deal to win approval last year.
The fighter planes are of increasing importance to Kuwait, which is
part of the Saudi-led coalition fighting insurgents in Yemen, and is
primarily supporting that effort with its air force and fleet of
existing F/A-18s.
(Editing by David Gregorio)
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