Boeing's defense business is proving harder to turn around than executives initially predicted, with supplier errors and high manufacturing costs...
FILE PHOTO: The Boeing KC-46 Pegasus aerial refueling tanker is seen before a delivery celebration to the U.S. Air Force in Everett, WashingtonWASHINGTON - Boeing's defense business is proving harder to turn around than executives initially predicted, with supplier errors and high manufacturing costs contributing to $1.7 billion in losses this year on programs like the next Air Force One and NASA's Starliner capsule.
Unlike those companies, however, Boeing is locked into handful of contracts that force the planemaker to take a loss when technology development goes over budget. Byron Callan, a defense analyst with Capital Alpha Partners, said Boeing's 2025-2026 timeline to get to positive margins is feasible but questioned why it took the company years to institute programs to improve execution.Analysts also say there is little Boeing can do to offset the financial burden of its long list of fixed-price development contracts with customers like the U.S. Defense Department and NASA, which lock the planemaker into paying all costs above an agreed-upon threshold.
However, the company's current fixed-price development efforts, which include the U.S. Air Force's KC-46 refueling tanker and T-7 training jet, new Air Force One planes, the Navy's MQ-25 tanker drone, and NASA's Starliner have all continued to run over budget this year. A better bet, and one Boeing's defense segment is aggressively pursuing, is inking future contracts for next-generation fighter jets and cutting-edge drones.Judge Engoron comes this close to accusing Trump of perjury in a written orderJack Smith Asks Court To Jail Trump If He Keeps Yapping About Witnesses
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