Boeing Pushes Price In Its Pitch To Sell Fighter Jet To Pentagon

Buying more F/A-18s to tide us over until the F-35 came out would have been a perfect solution if we had not already spent billions of dollars to build 202 F-22 Raptors! What good 202 planes would do when they need to replace the 1000 F-16s and over 800 F-18s that we currently have in the inventory is beyond me!

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August Cole
Wall Street Journal


Boeing Co. is trying to sell a fighter jet to the Pentagon by employing an increasingly effective weapon in the defense industry: price.

The F/A-18 Super Hornet isn't exactly the most cutting-edge weapon on offer. The Navy began flying the newest version of the plane 10 years ago. But today, Boeing believes the jet has a new appeal by virtue of a price that runs as low as $49.9 million.

Boeing's pitch for an updated version of a plane that was first developed in the 1970s reflects a shift in the way both the Pentagon and defense contractors are thinking about weapons in an era of trillion dollar deficits.

The company says that if the Navy places a large enough order for more F/A-18s, the price will drop by as much as $4 million per plane from the Pentagon's last big order in 2003. And because the plane is already in production, there aren't likely to be any unexpected cost increases. "Once we tell them a price, it's not going to change," said Dan Korte, vice president and general manager of Global Strike Systems at Boeing's Integrated Defense Systems unit.

While most government departments are routinely under pressure to save on everything from copy paper to subcontractors, the Defense Department, with its budget has always represented something of an exception. Even in tight times, Pentagon officials have argued that developing the most sophisticated weapons was a crucial component of maintaining American power and security.

But that might be about to change. Recent comments by top Pentagon officials indicate that the military may be willing to retreat on firepower if it means advancing on cost. "We will pursue greater quantities of systems that represent the 75% solution instead of smaller quantities of 99% exquisite systems," said Defense Secretary Robert Gates at a Senate hearing last month.

That equation will be tested by the Obama administration as the Pentagon moves forward with its plan to replace much of its aging fighter fleet with a single new design made by Lockheed Martin Corp.

Lockheed bested Boeing in 2001 to win the contract to build the F-35 Lightning II, also called the Joint Strike Fighter. Involving more than 2,400 planes, the contract is the biggest Pentagon contract award ever. It could also leave Lockheed as the lone U.S. fighter maker if Boeing isn't able to find new avenues for its F/A-18.

The Air Force, Navy and Marines will each get a different version of the F-35 at a total cost currently expected to be just under $300 billion. U.S. allies will buy hundreds, perhaps thousands, more. The Marines are scheduled to receive their first operational jets in 2012, the Air Force in 2013, and the Navy in 2015.

Lockheed estimates the fighter will cost about $65 million apiece for the Navy version. The company argues that the F-35 is actually more cost effective because it includes electronic warfare technology and other advanced systems and sensors that don't come with planes such as Boeing's F/A-18. In addition, the F-35 requires less maintenance and is designed to last 33% longer than current fighters, the company contends.

Although the F/A-18 isn't a direct substitute for the stealthier and far more computerized F-35, every cost increase or hiccup on the Lockheed program makes Boeing's proposed solution look even better. Already, the costs for the Lockheed plane have ballooned by more than $69 billion, according to a recent memo by the Defense Department's top weapons buyer, who criticized insufficient prototyping. In the Pentagon's 2009 budget, more than $6 billion is going to the F-35 program.

Boeing's push is tied in part to concern in the Navy and in Congress about having sufficient numbers of fighters to fill out the Navy's carriers. To address the shortfall of fighters that will peak in 2017, the Navy is considering alternatives ranging from keeping old F-18s in the air thousands of hours longer to buying new ones, said Thomas Laux, Assistant Secretary of the Navy for Air Programs.

The decision whether to buy new F/A-18s will be one of the first that the new administration must make as it formulates its budget for 2010. Mr. Laux said the F-35 is "fundamental to our future force structure" but it is important for the program to stay on track through development and into production.