End of Boeing line won't damage key suppliers-US

Sun Apr 6, 2014 1:25pm EDT
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By Andrea Shalal

WASHINGTON (Reuters) - Shutting down a Boeing Co (BA.N: Quote) fighter jet production line in St. Louis after 2016 would not drive any key suppliers out of business, a senior U.S. defense official said, citing a recent Pentagon review.

The Defense Department decided it could skip further orders for Boeing's F/A-18 fighter jets and EA-18G electronic attack planes after concluding that a halt in their production would not jeopardize suppliers for other big weapons programs, said Elana Broitman, the Pentagon's top industrial base official.

"Nothing piqued our concern (about) a critical supplier going away entirely if ... they do indeed have to close that line," Broitman, deputy assistant secretary for manufacturing and industrial policy, said in an interview on Friday.

Broitman's office carefully monitors the health of the U.S. defense industrial base, and provides additional funding or other aid in select cases if the manufacturers of key components are likely to go out of business or stop making those parts.

Those pressures are mounting as U.S. military spending declines as a result of mandatory budget cuts, the end of the war in Iraq and the withdrawal of U.S. forces from Afghanistan.

Current orders for the Boeing jets ensure production through the end of 2016 and possibly into mid-2017, but the company needs to decide in coming months whether to start shutting the line down or keep buying certain components from suppliers that take years to build.

The Navy's fiscal 2015 budget request did not include money for any more of the Boeing planes, but the Navy has now asked lawmakers to add $2.1 billion to the budget for 22 more EA-18G Growlers, if money becomes available. Growlers jam enemy radars so fighter jets can carry out their attack missions safely.

Congress is weighing the Pentagon's overall budget request, and $36 billion in items identified by the Navy and other services as "unfunded priorities." But lawmakers have said they intend to stick to budget caps, which means that funding for any of those items would reduce spending in other areas.   Continued...

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young