Company's Aerospace Status Hinges On Wins, And Losses

Boeing is using the lull in the KC-X tanker bidding war to put some subtle pressure on the Pentagon, implying that a loss of the contract to Northrup Grumman and EADS could add to an erosion of Boeing's military technology capability.

Reuters reports Darryl Davis, president of Boeing's Advanced Systems unit, told reporters at the annual Air Force Association meeting Monday that the company is continuing to fund research and development of new military aircraft, but, "The technology base is eroding for Boeing as we move late into the next decade."

The new millennium has not been good to Boeing on the military front. In the last few years Boeing lost the $200 billion Joint Strike Fighter project to Lockheed Martin, and a combat UAV contract to Northrop Grumman Corp, which also won a Navy UAV contract.

Production of Boeing's C-17 transport and F-18 fighter jet are winding down, and Davis agreed with analysts who say Boeing's long-term military competitiveness is in jeopardy, especially if the Air Force delays plans to develop a new bomber and a possible sixth-generation fighter.

He added that a move by the Pentagon toward more testing of prototypes before awarding production contracts may boost competition, but, "Boeing can't fund everything on its own. We're not talking about a small amount of money."

One bright spot is the success of the V-22 Osprey tilt-rotor, developed jointly by Boeing and Textron's Bell Helicopter division. Boeing VP Gene Cunningham, head of the V-22 program, says the last six aircraft were actually delivered ahead of schedule, and an increase in the number of CV-22s ordered by the Air Force is driving increased investment in Bell-Boeing facilities.

FMI: www.boeing.com/ids