Orion Replacement Seen As Vital For Company's Military
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The high profile award of the US Air Force's new aerial tanker
contract to Northrup Grumman has been a public defeat for Boeing,
but in the big picture, the company's military business is doing
just fine.
Last week, Boeing announced first-quarter earnings that beat
Wall Street projections. As he filled in the details, CEO Jim
McNerney observed to the Seattle Post-Intelligencer that the
company won nine of 11 major US military contract competitions last
year. "Our hit rate has been very, very high," he said.
Among the programs succeeding in the shadow of the KC-X tanker
controversy is the P-8A Poseidon, due for first deliveries to the
US Navy next year. The plane is based on the 737, but will be
supplied to the Navy equipped with bomb bay doors and weapon pylons
under its wings. The planes will replace aging P-3 Orions which
have been flying since the 1960s. Adm. Gary Roughead, chief of
naval operations, calls the P-3, "tired iron."
The Navy wanted 100 planes, and Lockheed proposed supplying an
updated P-3, but Boeing won the bid, and will provide 100 of the
new, 737-based submarine hunters. The victory was good news after
Boeing lost another Navy contract to Northrup last week, to supply
44 unmanned aerial vehicles for use in patrolling for surface
ships. Those will be used in conjunction with the new P-8A manned
aircraft.
The P-I observes that the P-8A, which will be the first military
plane Boeing builds on a standard commercial assembly line, may be
the last 737 variant built at the company's plant in Renton,
Washington. By the time the last of the Navy's Poseidons are
delivered, Boeing is expected to have started production on a
replacement for the 737, which will likely be built in Everett.
The P-8A could also be the last fixed-wing plane Boeing builds
for the military for quite a while. Richard Aboulafia of the Teal
Group, an industry consulting firm, notes that Boeing's fighter
production has peaked, and production of the C-17 transport is
winding down. How the P-8A performs its missions dropping sonobuoys
and detecting subs will determine, among other things, whether
Boeing can sell the plane to other nations.
"This is pretty much it," Aboulafia said. "It better work,
because Boeing has a lot riding on this in the fixed-wing market
for military aircraft integration."