Boeing CEO Kelly Ortberg emphasized that the latest charge on the beleaguered tanker does not reflect larger issues across its defense business, with executives attributing it to higher production support and supply chain costs.
Boeing defense chief Steve Parker also disputed that cost disputes drove a decision by the US Air Force to cancel the E-7 Wedgetail program, which has now led to NATO reversing plans to buy the aircraft as well.
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A recent Air Force document provides the clearest insight yet into the service’s evolving tanker strategy, as well as what might be needed to continue the production run of Boeing’s KC-46 Pegasus air refueler.
The Air Force plans to use the Boeing KC-46 Pegasus’s Capability Production Document “as the most affordable requirements basis” for the new program, potentially giving the embattled aerospace manufacturer a leg up in a competition.
The Boeing executives also touched on Japan’s ongoing effort to upgrade its fleet of F-15 Eagle interceptors, with Suding telling reporters that systems integration work is ongoing at Boeing’s facilities in St. Louis.
The new timeline is a setback for the beleaguered tanker, whose deliveries have been halted since February.
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The decision to pause deliveries was made on Feb. 27 by the service’s KC-46A program office “due to the identification of in the ‘outboard fixed-trailing-edge support structure’” of the two planes, an Air Force spokesperson said.
Boeing’s total year end charges of $4.9 billion on its troubled portfolio of fixed price weapons contracts is the largest-ever loss for its defense unit, up from losses of $4.4 billion in 2022.
Members of the International Association of Machinists and Aerospace Workers (IAM), which represents about 33,000 Boeing workers mostly in Washington state and Oregon, voted in a 59 percent majority to end the strike and will return to work on Nov. 6.
"In BDS [Boeing Defense Space and Security], our performance on fixed-price development programs is simply not where it needs to be," Boeing CEO Kelly Ortberg said.
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Japan would be permitted to buy up to nine additional KC-46A tankers, while Romania would be cleared to acquire 32 F-35As.
The strike stops production of Boeing’s 737, 767 and 777 jetliners in the Seattle region as well as military derivatives of those aircraft, which include the 737-based P-8 Poseidon maritime aircraft and the 767-based KC-46 tanker.
Initial flight tests showed that a mitigation technique "look[s] very promising" as an interim solution, an Air Force official said, suggesting the issue could be downgraded relatively soon.
The newest issue with the long-troubled tanker involves a part on the aircraft’s refueling boom.