Boeing Confident Fighter Line Will Be Open in 2020s

Boeing Co. is increasingly confident a pipeline of potential orders will keep its combat jet plant in St. Louis open into the 2020s, the aerospace company's chief executive said Monday.

The drying up of deals for its F-15s and F/A-18 family of aircraft had led Boeing to warn that the future of the jet assembly lines at its main defense facility in Missouri were in jeopardy, exacerbated by the failure last year to win a huge contract to build a new Air Force bomber.

Boeing Chief Executive Dennis Muilenburg said recent Pentagon budget proposals, if approved by Congress, would buy more F/A-18s and potential overseas F-15 deals gave the plant more breathing room.

"We clearly have opportunities to extend that business into the 2020s," he told reporters after Boeing's annual meeting in Chicago.

Boeing has slowed production to keep the lines running and invested its own cash in some raw materials ahead of prospective orders, but Mr. Muilenburg said both were running efficiently, and the optimism of fresh deals had helped it retain staff. Many had opted for buyouts as the fate of the plant hung in the balance.

Without new deals, production of the F/A-18 could end in 2017, while the last batch of F-15s bound for Saudi Arabia is due to roll off the production line in 2019.

After the loss of the bomber deal to Northrop Grumman Corp., Boeing has turned its attention to winning an upcoming deal for hundreds of new trainer jets, bidding in partnership with Saab AB. It is also pursuing a replacement fleet of surveillance planes and a possible unmanned jet from the Navy, though all three are being fiercely contested.

Boeing has already boosted the St. Louis defense plant with work on its upcoming 777X passenger jet, and Mr. Muilenburg said marrying efficiency improvements from its commercial and military aircraft arms was central to winning future deals.

The company has embarked on another round of cost-cutting to boost productivity, and Mr. Muilenburg said leveraging ideas derived from suppliers was crucial to their success. He said more than 80% of its suppliers had signed up for the first phase of its Partnering for Success productivity initiative, and Boeing was working through 2,000 ideas from its supply base for the second phase.

Some Boeing suppliers have expressed concern about its cost-cutting efforts and push to provide more services to airlines.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

May 02, 2016 13:05 ET (17:05 GMT)

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