December 30, 2013
Credit: Ted Carlson
Remember the Last Supper? This wave of 1990s defense company mergers was intended to solve the industry's post-Cold War overcapacity problem. If overcapacity is measured in corporate names or headquarters staff, then mission accomplished. Unfortunately, overcapacity is best measured in factories and programs, and aside from Grumman's F-14 and Northrop's B-2, no active military aircraft lines were terminated in the 1990s. Whether through reinvention or exports, most lines stayed alive.
Yet the past few months have seen stark harbingers of looming pain. In September, right after Boeing delivered the 223rd and final U.S. Air Force C-17, the company announced the line would close in 2015. A month later, South Korea rejected the Boeing F-15 for its F-X 3 competition, dooming the proposed Silent Eagle variant and probably killing the line after the last of Saudi Arabia's current order is delivered in 2018.
In December, the Boeing F/A-18E/F lost the Brazilian FX-2 competition, one of several key international defeats. A pre-solicitation announcement for 36 additional Super Hornets in fiscal 2015, placed by the Navy at the FedBizOpps.gov website in October, was withdrawn several days later, probably under pressure from the Defense Department. The last Super Hornet is scheduled to be delivered in 2016, and Boeing said it must decide this March whether it will preserve the line with company funding.
The problem is not confined to Boeing's legacy programs. Lockheed Martin, which delivered the last F-22 last year, says its F-16 backlog only takes production through mid 2017. Beechcraft's last T-6 is slated for delivery in 2016. Bell-Boeing's V-22 program will expire around 2020, unless funding is found for additional aircraft. While no other U.S. military rotorcraft lines are threatened, 2011-18 procurement is being cut in half.
That leaves the U.S. with two secure, dedicated fixed-wing military production lines (and only one prime contractor): Lockheed Martin's F-35 and C-130J (see above). Boeing is building its KC-46 tanker and P-8 maritime patrol derivatives of commercial jetliners, but the P-8 is slated to wind down around 2020, too.
There are few new programs in the pipeline. The Air Force's T-X trainer should generate an off-the-shelf jet production line, but not until the next decade. The Long Range Strike-Bomber is just starting development, and we are unlikely to see any production aircraft until 2025, at the earliest.
There is not much planning behind this carnage. While the C-130J is one of the few secure lines, with healthy ongoing procurement for the Air Force, Special Operations Command, Marines and export customers, it only barely survived the ax. Just eight years ago, the Defense Department moved to end procurement, effectively killing the C-130J line. If this move had not been averted, there would be an aging fleet of 40-plus-year-old C-130s in constant demand but with no replacements in sight.
Today, the C-17 line is closing just as the U.S. is pivoting its forces toward Asia. This means the country will need greater strategic mobility just as it is killing its only strategic airlifter, with no funding in sight for a replacement. The faction of the Navy that wants to continue Super Hornet procurement is also mindful of the risk of killing the old before the new F-35C has proven itself for carrier operations.