Boeing Confident Fighter Line Will Be Open in 2020s
03 May 2016 - 3:20AM
Dow Jones News
Boeing Co. is increasingly confident a pipeline of potential
orders will keep its combat jet plant in St. Louis open into the
2020s, the aerospace company's chief executive said Monday.
The drying up of deals for its F-15s and F/A-18 family of
aircraft had led Boeing to warn that the future of the jet assembly
lines at its main defense facility in Missouri were in jeopardy,
exacerbated by the failure last year to win a huge contract to
build a new Air Force bomber.
Boeing Chief Executive Dennis Muilenburg said recent Pentagon
budget proposals, if approved by Congress, would buy more F/A-18s
and potential overseas F-15 deals gave the plant more breathing
room.
"We clearly have opportunities to extend that business into the
2020s," he told reporters after Boeing's annual meeting in
Chicago.
Boeing has slowed production to keep the lines running and
invested its own cash in some raw materials ahead of prospective
orders, but Mr. Muilenburg said both were running efficiently, and
the optimism of fresh deals had helped it retain staff. Many had
opted for buyouts as the fate of the plant hung in the balance.
Without new deals, production of the F/A-18 could end in 2017,
while the last batch of F-15s bound for Saudi Arabia is due to roll
off the production line in 2019.
After the loss of the bomber deal to Northrop Grumman Corp.,
Boeing has turned its attention to winning an upcoming deal for
hundreds of new trainer jets, bidding in partnership with Saab AB.
It is also pursuing a replacement fleet of surveillance planes and
a possible unmanned jet from the Navy, though all three are being
fiercely contested.
Boeing has already boosted the St. Louis defense plant with work
on its upcoming 777X passenger jet, and Mr. Muilenburg said
marrying efficiency improvements from its commercial and military
aircraft arms was central to winning future deals.
The company has embarked on another round of cost-cutting to
boost productivity, and Mr. Muilenburg said leveraging ideas
derived from suppliers was crucial to their success. He said more
than 80% of its suppliers had signed up for the first phase of its
Partnering for Success productivity initiative, and Boeing was
working through 2,000 ideas from its supply base for the second
phase.
Some Boeing suppliers have expressed concern about its
cost-cutting efforts and push to provide more services to
airlines.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
May 02, 2016 13:05 ET (17:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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