Boeing Super Hornet jobs in danger zone

ST. LOUIS — One of the most important assembly lines here is getting pretty short.

In late 2016, the final F/A-18 Super Hornet is due to roll out of Boeing Co.’s fighter jet plant north of Lambert-St. Louis International Airport. When it does, thousands of jobs at Boeing and hundreds of suppliers will leave with it, and another big chunk of the region’s manufacturing base will slip away.

And while nearly three years might be an eternity in some industries, it’s a blink of an eye in big-ticket defense manufacturing. Indeed, parts for that final F/A-18 are already starting to be manufactured. That means the aerospace giant is fast nearing crunch time in its bid to keep the Super Hornet line alive.

“This is a critical year for us,” said Mike Gibbons, Boeing’s vice president in charge of the program.

For Boeing, extending production of the Super Hornet and its high-tech cousin, the E/A-18 Growler, means keeping a foothold in a global fighter-jet market that’s being taken over by Lockheed Martin’s F-35, and keeping a skilled workforce and supply chain that can help it win the military’s next big jet.

For St. Louis, it means thousands of good jobs and hundreds of millions of dollars a year in the local economy. For taxpayers and the military, though, more Super Hornets may simply be more than they need.

Boeing is coming to the end of its last multiyear contract to build Hornets and Growlers, which are the workhorse of the Navy’s air fleet. That deal plus a contract with the Royal Australian Air Force, along with a recent decision to slow production from four planes per month to three, will stretch the line into late 2016.

Any orders beyond that have to happen now, in the 2015 federal budget that will start to wind through Washington next month. Pentagon budget-writers are drafting their final recommendations for defense spending, to be released by the Obama administration on March 4. A Navy spokeswoman declined to comment on F/A-18 spending before that date.

But Loren Thompson, a defense analyst with the Lexington Institute, a Washington-area think tank, said he thinks it’s unlikely defense officials will seek the roughly $2 billion it would take to buy another year’s worth of Super Hornets. Instead, he predicts, the Navy will put its limited resources toward the F-35C, its version of the Joint Strike Fighter, and start upgrading the Navy fleet now.

“That’s the bottom line,” he said. “The Navy cannot afford to both keep buying Super Hornets and to develop a new, more stealthy alternative. It has opted to go with the new plane.”

But that won’t be certain until March — and Boeing is still making the case for the Super Hornet. Last year it unveiled new upgrades designed to boost the plane’s stealth capabilities, radar and range. And Gibbons touts his jet, with its $52 million “fly-away” price tag, as a proven, cost-effective, “no drama” alternative to the F-35C, which didn’t even start flying until 2010 and hasn’t yet begun aircraft carrier testing.

That argument, along with delays and cost overruns on the Joint Strike Fighter program, helped Boeing win its last multiyear contract in 2010.

Despite improvements to the F-35 program, there’s “a chance” that argument could prevail again, and win the Super Hornet one more reprieve, said Todd Harrison, who studies the defense budget at the Center for Strategic and Budgetary Assessments in Washington.

“2015 was supposed to be the year the Navy went with the F-35C,” he said. “But we’re seeing some indications that they’re at least considering not making that decision.”

Boeing, too, says it likes what it’s hearing from the Navy and remains hopeful about the March budget. But it’s also preparing to take its case to Congress to press for the Super Hornet even if the Pentagon makes no request.

“If there are no jets, then it’s incumbent upon us to get the message out,” Gibbons said. “We’ll be calling our congressmen and our regional support networks.”

After all, Boeing has allies on Capitol Hill. The company is quick to point out that suppliers in 44 states make parts for the Super Hornet. And a variety of senators have urged more funding for the program.

Richard Aboulafia, a veteran defense analyst with the Teal Group, says these “plus-ups” — when Congress budgets weapons systems the Pentagon doesn’t ask for — are getting harder in these days of sequestration and tight budgets. Any billions for new Super Hornets, he said, will mean billions less for something else.

“I really don’t know where the cash would come from,” he said.

But Harrison suggested the Pentagon might frame the request as a supplemental budget, listing programs it would like to fund if Congress authorized more money. That could give lawmakers cover to open the checkbook a little wider.

“It could turn into a big lobbying battle on the Hill,” he said.

The Super Hornet won a small battle just last month, when a federal spending bill included $75 million to fund long-lead supply on the plane. That will pay for parts now on planes that may not ultimately be assembled — it takes two years to build a Super Hornet from start to finish — and spares Boeing from having to fund those suppliers out of its own pocket starting this spring.

“That takes a bit of the immediate heat off,” said Gibbons.

Another thing that would help is foreign sales, which can supplement production for the Navy and extend the line. That’s how Boeing has kept the F-15 production running for years. But on the Super Hornet, they’ve been hard to come by. Australia has ordered 24 of the jets and 12 Growlers, part of the mix of planes being assembled now. But that’s it. Japan and India are among the major U.S. allies who have passed on the Super Hornet in recent fighter buys. Then in December, Brazil chose Saab’s Gripen fighter over the Super Hornet for a 36-jet purchase, the last big foreign deal in the pipeline.

Gibbons says Boeing is working on other customers down the line. Denmark is planning a fighter jet purchase, and so is Malaysia. A couple of Middle Eastern countries he won’t name are mulling Super Hornets. Canada may hold a fighter contest. But all those deals will be competitive, none are imminent and none, Gibbons acknowledges, will be very big.

“The countries we’re talking with, any one of them are not the size order of the U.S. Navy or even (Australia),” he said. “We’re looking for multiple orders on top of a continued domestic line.”

If everything breaks right — a new buy from the Navy and a few foreign orders — Gibbons says Boeing could still be building Super Hornets in St. Louis in 2020. That could be long enough to turn the short assembly line into a bridge to whatever plane comes next — maybe the Air Force’s planned Long-Range Bomber — without having to lay off skilled engineers and assembly workers. That’s the hope, Gibbons said.

But there are a lot of hurdles along the way. The first one is coming up fast.

More in Herald Business Journal

Camano artist mixes flask, paintings for successful cocktail

Art flasks prove popular as bachelorette gifts, birthday presents and wedding favors.

Small retailers aim for emotional ties big chains may lack

“Put yourself into the community more and the money will come back to you.”

A look at what some stores have planned for Black Friday

With unemployment low, stores are hoping customers are in a mood to shop.

Boeing bolsters team for potential 797 with leading engineer

Terry Beezhold has been chief project engineer for the 777X program.

Uber paid off their hackers — they’re far from the only ones

“More and more companies have their own Bitcoin wallets for such cases.”

Airline defendants to pay $95 million in 9/11 settlement

The litigation claimed that security lapses led the planes to be hijacked in the Sept. 11 attacks.

Trump SoHo to shed ‘Trump’ amid reports of sagging business

The president’s company said it would have no comment beyond its news release announcing the move.

Uber reveals cover-up of hack affecting 57M riders, drivers

Uber acknowledges paying the hackers $100,000 to destroy the stolen information a year ago.

Mountlake Terrace-based 1st Security Bank wasn’t traded publicly during the recession, but it has seen a steady growth since the recession. (Jim Davis / HBJ)
How stocks in local banks fared since the recession

Every bank was hit hard during the recession, but most have bounced back in a big way.

Most Read