[ Content | View menu ]

Boeing reports lower earnings, notes Pentagon uncertainties

Written on April 23, 2009

With the Pentagon seeking to scale back orders for some military aircraft, Boeing’s Integrated Defense Systems is facing uncertainties and may have to lean on international customers, the company’s top executive said Wednesday.

Boeing President Jim McNerney made the remarks while discussing the company’s first-quarter earnings with reporters. Boeing’s net income for the three-month period was $610 million — about half the 2008 level in the same period. McNerney blamed the effects of the global economic slowdown for dragging down demand for new commercial airplanes.

Earlier this month, Defense Secretary Robert Gates proposed capping future orders of Boeing’s C-17 transport plane and Lockheed Martin’s F-22 fighter jet, in which Boeing has a stake. Gates also wants to restructure the Army’s Future Combat Systems program, for which Boeing is lead systems integrator.

McNerney said the Pentagon’s priorities and delivery of President Barack Obama’s budget would mark the beginning of a lengthy authorization and appropriations process.

"It’s early days," McNerney said. "But there is no doubt that the budget implied by Secretary Gates’ priorities does put overall pressure on the budget."

Boeing has warned that terminating the C-17 production for the U.S. military would affect 30,000 jobs across the country and would shutter a major production facility in Long Beach, Calif payday loans. Work on the C-17 supports 1,000 Boeing jobs in St. Louis.

The Pentagon proposal seeks funding for 31 F/A-18 Super Hornets next year. Still, local political leaders vowed to watch future funding closely. Boeing has 4,000 employees who work on the final assembly of the fighter jets in St. Louis.

Integrated Defense Systems is well-positioned, in part because of a diverse portfolio and an increased focus on "international defense opportunities," McNerney said. The company’s international opportunities have picked up in recent years, he noted, adding that more countries are "taking responsibility for their national defense."

International customers have shown increasing interest in the C-17, as well as the St. Louis-built F-15 and F/A-18 fighter jets, McNerney said.

Fourteen C-17s are in service with international customers, and the United Arab Emirates announced in February that it would buy four of the aircraft. McNerney said there also was growing interest in the P-8A, a maritime patrol aircraft.

Source

Filed in: technology.

Comments closed