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Boeing would take a hit in Gates’ budget

Tue., April 7, 2009

SEATTLE – Boeing would be hit hard if a series of major defense budget cuts proposed Monday by Secretary of Defense Robert Gates are implemented.

Gates’ budget recommendations signal the approaching end of production for Boeing’s C-17 military cargo plane, built in Long Beach, Calif., and the F-22 advanced stealth jet fighter. Boeing builds the F-22’s wings and aft fuselage in Seattle, employing more than 1,000 people.

The Army’s $160 billion Future Combat Systems program of networked vehicles, drones and communications, on which Boeing is the lead contractor, is being significantly restructured. The $87 billion vehicle component of FCS is canceled.

Proposed cuts in missile defense programs include a throttling back of Boeing’s airborne laser program; the budget maintains funding for more research but cancels a second prototype aircraft.

Gates also recommends terminating some major programs that Boeing has been competing for, including the combat search-and-rescue helicopter, the $26 billion communications satellite constellation called TSAT, and preliminary development of a future long-range Air Force bomber.

Gates said the Pentagon remains committed to restarting the Air Force refueling tanker competition this summer, and he reiterated his opposition to the suggestion from Congress of splitting the contract between the two bitter contenders. Boeing is offering a 767 tanker in competition with a partnership between EADS and Northrop Grumman, which is offering an Airbus A330 tanker.

Fairchild Air Force Base, currently a base for aging KC-135 tankers, is expected to be among the early homes for a new refueling tanker.

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