Early funding for Boeing jets on hold for now - US Navy

WASHINGTON, June 13 Fri Jun 13, 2014 4:07pm EDT

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WASHINGTON, June 13 (Reuters) - The U.S. Navy will not release $75 million in initial funding already approved for more Boeing Co electronic attack jets until U.S. lawmakers clarify that they plan to buy more of the jets in fiscal 2015, the Navy's top arms buyer said Friday.

Assistant Secretary Sean Stackley said three of four key congressional committees had added funding to the Navy's fiscal 2015 budget request for one to 12 additional EA-18G Growlers, but the Senate Appropriations Committee (SAC) had not yet acted.

"We're not going to release the (advanced procurement funding) for the Growlers unless we have confidence that they are in there," Stackley said after a briefing at the Pentagon. "With the SAC not appropriating yet, we can't make that call."

Congress approved $75 million in the fiscal 2014 budget to start early procurement for more EA-18G jets, but the Navy is waiting for more clarity before releasing the money to Boeing.

Boeing is lobbying lawmakers to buy more planes and extend production at the St. Louis facility where it builds F/A-18 Super Hornets and EA-18G Growlers beyond 2016.

The Navy did not fund any F/A-18s or EA-18Gs in its fiscal 2015 budget request, but later added $2.1 billion for 22 Growlers to an "unfunded priorities" list sent to Congress, citing emerging needs for more electronic attack capability.

Boeing executives have said they can build two jets a month instead of four without raising the cost of the jets. At that rate, a 12-jet order would extend production for six months.

Stackley said the Navy would talk with Boeing about slowing deliveries of Super Hornets and Growlers already on order to help extend the production line, but not at added cost.

"What we're not going to do is incur additional cost to stretch things out unnaturally," he said. "But if we can efficiently attach to the existing contracts, that would be in our best interest."

Boeing is also chasing possible orders for the F/A-18 in the Middle East that could extend the line, but it remains unclear if those orders will come in time to extend the St. Louis line.

Navy Secretary Ray Mabus last month told Reuters the Navy could use more electronic attack aircraft because it was the only military service now providing that capability, but said the F-35 fighter jet being developed by Lockheed Martin Corp could "do a lot of the same things."

"While it would be nice to have some more Growlers, I think ... you can bridge to the F-35 that's coming in on the carrier with an amount of acceptable risk," he said.

The Navy plans tests this summer to look at the impact of expanding the number of Growlers on an aircraft carrier from five to seven, followed by the first sea-based tests of the F-35C model planes in the fall. (Reporting by Andrea Shalal; Editing by Jonathan Oatis)

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