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Fri, Jun 30, 2006

Australian Defense Minister Slams Boeing Over Wedgetail Project

"Very Disappointed" With Delays

Australia's defense minister says he's tired of waiting for Boeing to deliver the six Airborne Early Warning and Control Aircraft the manufacturer is building for that country's military.

Bloomberg reports in a joint press conference with US Defense Secretary Donald Rumsfeld this week, Brendan Nelson said his country is "very disappointed" with significant delays in the program.

"I think Boeing has let the Australian government down, and I think they've let themselves down," Nelson said.

Nelson also said he's met with the head of Boeing's defense department, Jim Albaugh... and, he says, he gave Albaugh a message: Nelson intends to make "damn sure" Boeing delivers on their end of the bargain.

Despite his harsh words, however, Nelson was careful to note that he, and other Australian defense officials, are "confident" that despite the 18-month delay, they'll eventually get the aircraft coming to them.

The planes in question are part of the "Wedgetail" program, which uses Boeing's next-generation 737 commercial plane as the foundation for an early-warning radar platform. Boeing is also building a version of the plane for Turkey -- it's called the "Peace Eagle" there -- and that program has suffered from similar delays.

Boeing announced Thursday that it will take somewhere between a $300 million and $500 million pre-tax hit this fiscal quarter for the delays... revenue that Boeing's defense side -- currently a loss leader, compared to Boeing's profitable commercial operation -- really can't afford to lose.

FMI: www.boeing.com/defense-space/infoelect/wedgetail-737/

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