Boeing’s Fighter Jet Future Hinges on Trainer for 2020s Aces

  • St. Louis presentation unveils T-X model designed with Saab
  • Lockheed, Northrop, Raytheon also vie for $11 billion award

Boeing Co.’s future in the fighter-jet business may ride on the sleek wings of a trainer it’s entering in the U.S. Air Force’s $11 billion bidding contest, with the planemaker’s factory hub in St. Louis on the line.

The world’s largest aerospace company faces a dogfight with Lockheed Martin Corp., Northrop Grumman Corp. and Raytheon Co. for the contract to produce 351 jets through the T-X advanced trainer program. The winning entry would replace the aging T-38 fleet on which U.S. military pilots have honed their flying skills since 1961.

The new T-X fighter by Boeing.

Source: Boeing

With lights pulsing and booming music, Boeing and Sweden’s Saab AB unveiled their entry Tuesday in St. Louis for the competition that kicks off late this year. Their jet melds a twin tail reminiscent of Boeing’s Super Hornets with a General Electric Co. engine and systems honed through Saab’s Gripen jets.

But the real innovation comes through new technology and production processes the companies say will slash manufacturing costs, Darryl Davis, president of Boeing’s Phantom Works research and development organization, told reporters.

“Our T-X is real, ready and the right choice for training pilots for generations to come,” said Leanne Caret, chief executive officer of Boeing’s defense unit.

Boeing is the last of the major defense contractors to reveal its concept after plane spotters glimpsed Northrop Grumman’s entry making a test flight last month. And there’s more than a little symbolism to the site Boeing chose to debut the first proposed trainer model: the St. Louis manufacturing center where the company churns out F/A-18 Super Hornets and F-15 fighter jets.

“This is their last chance to provide a next-generation dedicated military aircraft for the company and St. Louis,” said Richard Aboulafia, an aerospace and defense analyst with Teal Group. “The Super Hornet can go on for another five years easily, and ditto for the F-15. But the bridge to a sixth-generation fighter would depend on some kind of combat version of this.”

Boeing fell 1.2 percent to $128.53 at 3:01 p.m. in New York, leaving the stock down 11 percent this year.

Few Contests

Military aircraft contests are few and far between in an era of budget constraints, and the Chicago-based planemaker needs new orders to preserve the Missouri industrial base and engineering acumen gained with the 1997 acquisition of McDonnell Douglas Corp. Boeing’s military arm has been eclipsed by the rapid growth of the commercial-jet unit this decade. The defense division accounted for 31 percent of sales last year, down from 50 percent in 2010.

The manufacturer has suffered high-profile losses: last year’s stealth-bomber competition to Northrop Grumman, and the joint strike fighter contest to Lockheed’s F-35 in 2001.  Boeing’s largest recent contract win, valued at $51 billion, is for an aerial refueler derived from the 767 jetliner, which is manufactured outside Seattle.

The winning T-X design may go on to claim hundreds of overseas orders and spare parts stretching over decades as the Pentagon program spurs other countries to upgrade their trainer fleets. Teal Group forecasts a global market for 2,737 turbine trainers valued at $32.3 billion over the next decade, up from the $19.9 billion of the aircraft delivered from 2006 through 2015, according to a June research report.

Cash Squeeze

The U.S. Air Force isn’t expected to release final contest criteria until December, picking a winner next year who would begin production in fiscal 2018. The new trainer isn’t slated to begin preparing a new generation of pilots for combat for another eight years. The gap could be longer if funding is squeezed by programs like the F-35 fighter, the KC-46A tanker and a new stealth bomber, the Congressional Research Service said in a report last year.

It’s uncertain how the Air Force will weigh an aircraft’s performance against its production costs. Boeing and Northrop Grumman may be at a disadvantage since they are bidding clean-sheet designs against supposedly less expensive, in-service models: the T-50A offered by Lockheed and Korea Aerospace Industries, and Raytheon’s T-100, based on Leonardo’s M-346 trainer.

Aboulafia thinks the Lockheed aircraft has an edge “as the only off-the-shelf, supersonic design. We don’t know to what extent Boeing and Northrop Grumman will exceed expectations.”

Next Model

Boeing already is assembling its second production trainer in St. Louis, employing some of the advanced manufacturing techniques developed over the past five years through its secretive “Black Diamond” initiative. They range from using 3D printing for the plane’s ductwork to a canopy developed with injection molding that shaves a six-week process down to eight days.

But the company wants to make sure that work counts in the upcoming competition. Boeing has urged Air Force planners to hold to current criteria “if they are serious about the cost curve,” rather than tilting judging so that planes that exceed threshold requirements will have an advantage, said Davis, the Phantom Works president.

By teaming with Sweden’s Saab, Boeing gained a way to tamp down costs and jump-start sales in international markets, said George Ferguson, an analyst at Bloomberg Intelligence. “There’s a reason why a number of these teams teamed up with foreign participants,” he said.

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