Boeing Wins Contract for Long Beach Operation
In a major boost to its Long Beach operations, Boeing Co. said Monday it was awarded a $1.5-billion U.S. Air Force contract to overhaul the cockpits and electronics for one of the most widely used military cargo planes in the world.
The nation’s second-largest defense contractor said $485 million will be spent researching and developing new avionics for the C-130 Hercules, much of which will take place at Boeing’s military aircraft operations in Long Beach.
After years of retrenching, a Boeing spokesman said the contract could mean several hundred new jobs at its sprawling Long Beach complex. About 14,000 Boeing engineers, machinists and assemblers currently do commercial and military work there, down from about 40,000 workers during its heyday.
While manufacturing jobs have declined dramatically, the latest contract expands Southern California’s leading role in aerospace research and development, analysts said.
“It’s a big thing for us to win the contract,” said George Sillia, a Boeing spokesman for the company’s military aircraft and missiles operation in Long Beach, which also builds the C-17 military cargo plane. “It’s a very major program.”
In addition to producing the C-17, Boeing’s commercial airplane operations in the adjacent complex in Long Beach builds the 106-passenger 717 jet.
Boeing beat out rival Lockheed Martin Corp. for the contract in one of the more heated competitions. It marked a second major setback for the Bethesda, Md.-based defense contractor, which two years ago lost a bid to build the next generation of spy satellites for the National Reconnaissance Organization after having been the sole provider for more than 40 years. Boeing’s space and communications group, based in Seal Beach, won the contract.
Similarly, Lockheed has been manufacturing the C-130 since the company first developed the aircraft in the 1950s and was expected to take the lead role in upgrading the aging avionics. More than 1,400 have been built with about half of them owned by the Air Force.
Under the six-year, $485-million contract, Boeing will develop advanced all-glass cockpit panels and the latest avionics to replace aging and somewhat unreliable equipment on 519 C-130s. The engineering and manufacturing development of the avionics would take place in Long Beach, but not the actual outfit of the aircraft.
The company also was awarded a 12-year, $1-billion contract to make the modifications, replacing the old equipment with the new ones at its facilities in San Antonio.
Among the new avionics will be night vision imaging equipment as well as new software for a global air traffic management system.
Boeing said the new avionics system includes six digital instrument display panels and flight management system adopted from the 737 commercial airliner, both of which provide navigation, safety and communication improvements. Overall, the overhaul should make it easier for flight crews to fly the airplane, the company said.
In all, the contract could be worth up to $4 billion with follow-up orders from the Air Force as well as from foreign sales, Boeing officials said.
Boeing also beat Raytheon Co. and BAE Systems North America Inc. for the contract.
Los Angeles-based Northrop Grumman Corp. is one of the key suppliers under the new contract, Boeing said.
Boeing announced the contract after the close of markets. In trading on the New York Stock Exchange, Boeing shares rose $1.03 to close at $66.03, while Lockheed Martin shares fell 21 cents to $38.35.
