July 16, 2014 / 8:47 PM / 4 years ago

AIRSHOW-U.S. open to slower Boeing deliveries, but no extra cost

FARNBOROUGH, England, July 16 (Reuters) - The U.S. Navy might agree to accept slower deliveries of Boeing Co F/A-18 fighter jets and EA-18G electronic attack jets to help extend the company’s production line, but not if that adds cost to the program, a Navy official said Wednesday.

“The Navy could probably accept some slower deliveries, but my marching orders are not to do that at any additional cost to us,” Captain Frank Morley, who heads the F/A-18 and EA-18G program for the Navy, said at the Farnborough air show.

Boeing has been lobbying Congress to add $2 billion to the Navy’s budget for 22 more EA-18G Growlers, to keep the company’s production line in St. Louis, where the jets are made, open for year beyond 2016, when the final jets that have been ordered are slated to be finished.

Morley said Boeing had already used some of its own funds to pay for early procurement for another 12 EA-18G jets, which U.S. lawmakers appear likely to add to the Navy’s fiscal 2015 budget. A dozen more orders would keep the line running for six months at a minimum build rate of two jets a month.

Slowing the current build rate to stretch the line through the end of 2017 would likely increase costs, Morley said, adding that it was unclear if Boeing was ready to shoulder the extra cost of keeping the line running for another full year.

Boeing declined comment on the amount of money it had spent for advanced procurement or on the prospect of spending more to pay for a slower delivery schedule.

One congressional committee has added funds to the Navy that could possibly be used for that purpose, but the likelihood the measure will pass Congress this year is not certain.

The Navy’s fiscal 2015 budget did not include funding for additional F/A-18 or EA-18G jets, but Navy officials added 22 of the jets to a list of “unfunded priorities” submitted to Congress. They said demand for electronic attack capabilities would rise in coming years to keep up with growing threats.

Boeing’s top defense executive, Chris Chadwick, told reporters on Sunday that he hoped the company could maintain production of its F/A-18 and EA-18G fighters in St. Louis through the end of 2017 - a year longer than expected - if Congress approved additional orders of a dozen more planes.

But the Pentagon’s chief weapons buyer, Frank Kendall, later said that slowing production to extend the line was likely to increase costs at a time when budgets were already tight, and the Defense Department could not fund non-core needs. (Reporting by Andrea Shalal; Editing by Steve Orlofsky)

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