Although The Boeing Co. lost the competition to supply air-refueling tankers to the U.S. Air Force, it still has one major military aircraft development program in the works.
Starting next year, it will deliver the first of what could be more than 100 737s, modified with bomb bay doors and weapon pylons under the wings, to the U.S. Navy. Over the next decade or more, the P-8A Poseidon will replace the aging fleet of prop-engine Lockheed Martin P-3 Orion planes that have been used for hunting subs and military maritime missions since the Cold War days of the 1960s.
Under unusually tight U.S. government security regulations that prevent most non-U.S. citizens from getting within 10 feet of the Poseidon work areas, final assembly of the first of those Navy planes started earlier this month at Boeing's Renton plant.
It is the first time a Boeing military plane has been built "in line" on a commercial production line.
Boeing calls the program a "hybrid," reflecting the close cooperation between Boeing Commercial Airplanes and the company's military business.
The Poseidon could turn out to be the last of the 737s that Boeing assembles in Renton, assuming it has a commercial replacement for its single-aisle commercial jetliner before all the Navy planes are delivered. That 737 replacement plane, which Boeing says won't be ready until at least 2015 or later, is likely to be assembled at Boeing's Everett plant, not in Renton.
And with Boeing's fighter production having peaked, and production of the C-17 transport winding down, the 737 could be the last fixed-wing plane that Boeing makes for the military for some time, from about 2014 on, according to Richard Aboulafia of the Teal Group, an industry consulting firm.
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| The Boeing Co.'s first P-8A Poseidon fuselage goes into final assembly in Renton. A fleet of the modified 737s will replace the U.S. Navy's aging sub hunters starting next year. | ||
"This is pretty much it," Aboulafia said. "It better work, because Boeing has a lot riding on this in the fixed-wing market for military aircraft integration."
Last week, when Boeing announced first-quarter earnings that were better than Wall Street expected, Chairman and Chief Executive Jim McNerney said Boeing's military programs are running well, including the P-8A. McNerney noted that the company won nine of 11 major U.S. military competitions last year. "Our hit rate has been very, very high," he said.
But earlier this year, Boeing lost the tanker competition to a team of Northrop Grumman and EADS, the parent of Airbus. Boeing has appealed. And last week, Boeing lost to Northrop again for a Navy contract to build maritime surveillance aircraft. Northrop will supply the Navy with as many as 44 unmanned aircraft that will be used with the Boeing P-8A planes.
The P-8A will mostly hunt for submarines, while the unmanned planes, a version of Northrop's Global Hawk, will scan the ocean for surface vessels.
Boeing will initially supply the Navy with five P-8A test planes, two of which will be used for ground testing. First flight is set for next year. The Navy currently plans to purchase 108 Poseidons and field the first operational squadron in 2013.
Boeing was considered the underdog for the Navy contract. Lockheed Martin was offering an improved version of the P-3. Instead, the Navy went with a jet that can fly faster, higher and has more range and payload.
The P-8A is a derivative of the company's 737-800 commercial jet, but with the wings of the 737-900ER (extended range).
It will be able to carry 120 sonobuoys, which are dropped in the ocean to track subs. It also has two pylons under each wing for weapons. The P-8A can be refueled while flying. Inside the P-8A, the crew will sit at computers analyzing data from the jet's sensors, much as they do now on Boeing's 707 airborne and control plane, as well as the 737 airborne early warning planes being built for Turkey and Australia.
Boeing also could build versions of the P-8A for other nations.
India, for example, is finalizing a contract for as many as eight of the 737s to replace its navy's Soviet-era Tupolev TU-42s, which, like the P-3 Orion, have seen their best days.
In December, the U.S. Navy grounded 39 of its P-3 Orion sub hunters -- nearly a quarter of the fleet -- because of concerns about fatigue cracking in the wings.
Adm. Gary Roughead, chief of naval operations, said last month the Navy would like to speed up delivery of the P-8A to deal with the Orion problems.
But that will depend on Boeing's ability to crank up 737 production even further, which won't be easy. Boeing is currently building around 31 of the commercial 737 jetliners a month to meet high demand for that plane.
"Boeing is working really hard with us," Vice Adm. David Venlet, commander of Naval Air Systems Command, told Inside the Navy, a military publication, late last month. "They've got a real rapid-flowing 737 line, and getting spots in the sequence (for the P-8A), you've got to tell them pretty far ahead."
He called the P-3 Orion "tired iron."
McNerney, during last week's earnings call, said Boeing continues to study 737 production but has not decided how much more it will raise rates to get more planes out the factory door. The current rate is higher than it has ever been. Boeing has a 737 backlog of more than 2,000 planes, having sold a record 846 last year and 739 in 2006.
Those commercial jets are assembled on two state-of-the-art moving production lines at the Renton plant.
But the P-8A is assembled in a separate building to allow all the necessary military modifications to be made on the line. This has required a number of controls to meet the requirements of the U.S. International Traffic in Arms Regulations, or ITAR.
The P-8A assembly line is fenced off with badge readers at entrances to ensure that only U.S. citizens can get close to the plane. Foreign nationals, even those who work for Boeing, are not allowed access without special clearance.
Even the P-8A fuselage must be transported to Renton under tighter security.
All 737 fuselage sections are manufactured by Spirit AeroSystems in Wichita, Kan., and then shipped by rail to Renton for final assembly. Those wingless, green fuselage sections on rail cars have been a common sight for years. But the P-8A fuselage must be hidden from view during its trip.
The P-8A fuselage differs from the passenger plane. It does not have passenger windows, but does have a large observation window -- and a big hole in its belly for dropping weapons.
With final assembly under way on the first plane, Boeing workers are installing systems, wiring and smaller parts in the fuselage. The wings, manufactured by Boeing in the same plant, will be attached later.
Boeing won the Navy competition in 2006 over Lockheed Martin in large part because it decided to have an ITAR-compliant P-8A line in Renton so the planes would not have to be flown off after assembly to complete the military work. That can now be done during final assembly, a much cheaper and more efficient process.
This was to have been the model for the 767 tanker program had Boeing won the Air Force competition. Taking a page from the P-8A, most of the military modifications to the 767 would have been done during final assembly of the planes on an ITAR-compliant line in Everett.
Instead, Boeing is left, for now, with Poseidon.
