Boeing gets a wartime shop window Defense work promises to offset impact of Sept. 11 Saturday, December 8, 2001
By JAMES WALLACE SEATTLE POST-INTELLIGENCER REPORTER A few weeks after terrorists crashed four of The Boeing Co.'s jetliners into America's heart on Sept. 11, a clever e-mail began making its way though the nation's second-biggest defense contractor, eventually reaching top executives. It was addressed to "Mr. Osama bin Laden." The e-mail, whose author is not known, said Boeing had noticed bin Laden's interest in its 757 and 767 commercial jetliners and wanted to introduce him to some of the company's other products. Then, the computer screen slowly filled with various Boeing military products, from fighters, bombers and air-refueling tankers to smart bombs. "Don't wait for an appointment," the e-mail concluded. "We will just drop in." And drop in Boeing did. Although the attacks on the Pentagon and twin towers of the World Trade Center triggered an airline financial crisis that sent Boeing's commercial operations into a tailspin, the war on terrorism now being played out in Afghanistan has been a showcase for the vast arsenal of Boeing's military weapons. It also created a pro-defense climate that will likely see bulletproof defense budgets and significant opportunities for the growth of Boeing's military business over the next several years. Some of those new defense programs will boost the hard-hit commercial airplane business in the Puget Sound region. "This fight that is going on halfway around the world has heightened the interest in airlift and tanking," said Jerry Daniels, president and chief executive of Boeing's Military Aircraft and Missile Systems headquartered in St. Louis. "I'm very optimistic about what's coming." Daniels' division accounted for $12.2 billion of Boeing's $51.3 billion in sales last year. Even with the loss in October of the $200 billion Joint Strike Fighter, or JSF, program, analysts expect Boeing's military sales to post solid growth over the next few years. Congress may approve money for the military to buy or lease as many as 100 Boeing 767s, which are manufactured in Everett, for conversion into military air-refueling tankers and surveillance aircraft. Boeing's 737, which is assembled in Renton, is being eyed as a maritime patrol and electronic warfare platform, The Air Force has signaled that it may soon order another 60 of Boeing's C-17 military cargo transports. A version of the company's new F/A-18 E/F Super Hornet is now being tested as an eventual replacement for the aging EA-6B Prowler electronic warfare jets. New and improved smart bombs are in development. And then there is Boeing's "ace in the hole," as Daniels called it. That's the X-45 unmanned combat air vehicle that was unveiled last year by the company's Phantom Works "This will be a true game changer," Daniels said in an interview with the Seattle Post-Intelligencer. "An unmanned air combat vehicle with the characteristics of (the X-45) will change the nature of warfare." Boeing and the Air Force are preparing the X-45 for its first flight early next year, perhaps by February. The unmanned combat vehicle represents Boeing's fighter business of tomorrow. The X-45 is designed to suppress an enemy's air defenses in the early stages of an attack. It would cost only about a third as much as a manned fighter and would carry out the most dangerous missions without putting a person in harm's way. The Predator, an unmanned air vehicle, is being used in Afghanistan, mostly to gather intelligence and for surveillance and reconnaissance. But for the first time, a Predator on a mission for the CIA fired missiles at targets on the ground. The Predator, however, was not designed as a weapons platform. Boeing's X-45 is. "You are now seeing the utility of unmanned vehicles, both in the information and reconnaissance modes and the very beginnings of using them in combat modes," Daniels said. "That's a very elementary step toward a true unmanned combat vehicle, but the trend is dragging us along. We can put an unmanned vehicle in there, and it can engage with extreme accuracy, and we don't have any of our kids at risk." With the loss of the JSF contract, the X-45 program will allow Boeing to "remain viable" as a prime contractor in the fighter business, Daniels said. Most defense experts believe the JSF will be the last manned fighter built in this country. The U.S. Air Force, Navy and Marines, along with the United Kingdom, plan to order up to 3,000 of the planes over the next 20 years, at a cost of about $200 billion. Another 2,000 of the fighters could be sold to foreign allies. The JSF represents the largest military procurement project ever, and after Lockheed Martin won the competition on Oct. 26 it was generally assumed that Boeing would end up with a good-size chunk of the design and development work. But that probably won't happen, said Daniels, who met with Lockheed Martin officials a couple of weeks ago to discuss Boeing's possible role. "I'm not hopeful that Lockheed can offer us the major role that we would have liked," Daniels said. "But I can't sit around and wait, either. We are going to move off very aggressively on the unmanned combat vehicle and on other things. We are going to move out aggressively on those things and keep our people engaged." In addition to the unmanned combat vehicle, those "other" things include: The 767 as air-refueling tankers. The Air Force badly needs a replacement for its aging fleet of about 500 KC-135 tankers, which are based on the Boeing 707 airframe. Daniels said one trend in warfare has become clear since "Desert Storm." "We are being forced to conduct these fights at very long ranges," he said. And that requires that fighters and bombers be refueled several times in flight in order to reach and remain over their targets. "The tanker fleet for the U.S. Air Force averages over 40 years old," Daniels said. "They are almost twice the age of the pilots flying them." The Air Force is spending millions of dollars a year on maintenance. With a growing percentage of the tanker fleet on the ground undergoing repairs, fewer and fewer are available for missions. Boeing wants to replace the KC-135 with its 767 now in production as a commercial jetliner. Congress is poised to approve initial financing. The first 767 tankers for the Air Force would be several years away -- too far off to save jobs in the Puget Sound region. Boeing will eliminate up to 30,000 commercial jobs by mid-2002 as it cuts jetliner production by half in the wake of the airline financial crisis. But Boeing has calculated that up to 2,400 jobs eventually would be needed at the Everett factory to produce 20 767s a year for the Air Force. In addition to the U.S. Air Force, foreign governments also are interested in the 767 tanker. Italy recently decided to become the launch customer for the program. It has ordered four of the 767 tankers, the first one to be delivered in 2004. The Pentagon is also interested in the 767 as a military airborne surveillance platform. It is seen as a successor to the 707 E-3 Airborne Warning and Control System (AWACS) platform. Japan was the first customer for the 767 AWACS plane. Boeing has delivered four of the planes to Japan.. The 767 is also being considered as an eventual replacement for the 707 airframe that is used for the E-8 Joint Surveillance Target Attack Radar System, better known as J-STARS. "You will see a tremendous emphasis on intelligence, surveillance, reconnaissance and information platforms (in the future)," Daniels said The 737 jetliner. It could become the Pentagon's new aeromedical evacuation plane. Boeing is also trying to sell the 737 as a replacement for more than 200 P-3 Orion planes used by the Navy in maritime patrol and anti-submarine warfare. The C-17 transport. Boeing recently delivered the 79th plane to the Air Force as part of a previous order for 120 of the huge military transporters. The last of those planes would be delivered in 2004. An order for 60 more would extend production in Long Beach, Calif., until 2008. "Every study that has ever been done has highlighted the need for increased airlift capability," Daniels said. "I don't think there is any debate within the whole defense community about the need for those aircraft." He described it as close to "a sure thing" that the Air Force will order 60 more of the transports. The F-15 fighter jet. Boeing is essentially keeping the line warm by delivering 10 more of the fighters to the Air Force through 2004. But the line would shut down then without additional foreign orders. South Korea is considering an order for as many as 40 or more of the fighters. It is also looking at fighters made by other countries. "We are very hopeful," Daniels said. Korea could announce its decision before the end of the year. The F/A-18 E/F Super Hornet. This is a bigger and much more capable version of the F-18 Hornet, the Navy's mainstay carrier fighter. The Super Hornet has not yet seen action in Afghanistan. The Navy plans to order about 550 Super Hornets. Daniels said Boeing is aggressively working to cut the new fighter's cost, which would make it more attractive to foreign customers. That could also make the Super Hornet more competitive against the JSF, which might prompt the Navy to buy more of the Boeing fighters and fewer Joint Strike Fighters. Boeing is also looking at an electronic warfare variant of the Super Hornet that could replace about 125 aging EA-6B Prowlers. It would be known as the Growler and could be in development by 2003 if the Pentagon gives the green light. "I think it is not a matter of if, but when," Daniels said. "The 'when' will be fitting it into the Navy's overall budget requirement."
