Navy Awards Boeing $9.6 Billion in Contracts
Boeing Co. has received orders valued at about $9.6 billion to make scores of new Super Hornet jet fighters and to develop a new version of the aircraft, the company said Monday.
The Navy awarded a five-year, $8.6-billion contract for 210 F/A-18E/Fs and a separate $1-billion contract to create the EA-18G, a new electronics warfare version of the jet that would be capable of jamming and attacking enemy radar, Boeing said.
“Multiyear procurements have driven stability and increased cost efficiencies with the program,” said Capt. B.D. Gaddis, the Navy’s program manager for the F/A-18.
The Super Hornet manufacturing team is led by Boeing, with Northrop Grumman Corp. as the primary subcontractor. General Electric Co. makes the engines and Raytheon Co. provides radar systems. Boeing, whose military sales have been growing while demand for its commercial aircraft slumps, has been trying to rebuild credibility with Pentagon officials after two executives left amid a federal review of the way the company bid for defense contracts.
The Pentagon has put an order for aerial tankers on hold as it investigates whether Chicago-based Boeing’s ties with military officials got the company a favorable price. The Justice Department is investigating Boeing’s possession of documents belonging to rival Lockheed Martin Corp.
Boeing recalled Harry Stonecipher from retirement this month to become chief executive after Chairman Philip Condit resigned amid the investigations.
Shares of Boeing have risen 9.4% since Stonecipher took over on Dec. 1. The stock gained 53 cents to $42 on the New York Stock Exchange Monday before the order was announced. Shares of Century City-based Northrop rose 57 cents to $95.04, General Electric added 11 cents to $30.83, and Raytheon closed 21 cents higher at $30.22.
The new contract will run from 2005 through 2009. Boeing currently is making 222 Super Hornets under an $8.9-billion contract, awarded in June 2000.
Sixty percent of the fighter is assembled at a Boeing plant in St. Louis, with the remaining 40% at Northrop Grumman’s El Segundo plant, the Pentagon said.
The new G model, whose contract starts next year, is designed to detect and transmit to ground attack planes the locations of surface-to-air radar and missile batteries.
Starting in 2009, the EA-18G will replace the EA-6B Prowler as the military’s primary jamming aircraft.
The Navy plans to buy about 90 F/A-18G aircraft as part of its $50-billion program in which Boeing and Northrop will produce as many as 552 F/A-18E/F and models. The Navy already has spent $25 billion on the program.
The new contract calls for the delivery of as many as 42 aircraft per year starting in fiscal 2005.
