The Pentagon announced on Tuesday that US aircraft manufacturer Boeing has won two contracts worth over $7 billion in total, aimed at enhancing the military capabilities of the United States.
The aviation giant secured a nearly $4.7 billion Army contract, which includes AH-64 Apache helicopters, Longbow Crew Trainer Systems, and related equipment.
Simultaneously, the Pentagon revealed that it signed a $2.4 billion contract with Boeing for the production of the 12th batch of aircraft, G081 ordering and licensing agreements. This Air Force contract includes an additional 15 KC-46 Pegasus refueling aircraft.
Amid the signing of the new contracts, NASA announced on November 24 that it was slashing its investment in Boeing’s troubled Starliner spacecraft and reducing the number of astronaut missions, opting for an unmanned flight for the next International Space Station (ISS) mission.
Boeing not only faces the setback of NASA turning to SpaceX but also has been dealing with the impact of a strike for several months.
On November 13, thousands of Boeing machinists at the St. Louis plant voted to end a three-month strike that had been ongoing since August. Workers had been demanding higher wages and improved working conditions, and Boeing ultimately agreed to a deal, including a 38% pay raise over four years and a $12,000 bonus. The workers returned to the factory on November 16.
Reports indicate that the strike led to production halts at Boeing’s facilities in Washington and Oregon, resulting in losses of $9.7 billion for the company and its suppliers. Boeing also manufactures B-52 bombers, F-18 fighter jets, and Chinook helicopters.
In a recent audit report, the Department of Defense Inspector General’s Office criticized Boeing for overcharging on C-17 Globemaster III transport plane parts, with the price of a lavatory soap holder inflated by as much as 7943%, adding nearly a million dollars in costs over several years.
Despite these additional costs, the Air Force has not renegotiated with Boeing on a $11.8 billion contract signed in 2011 and a subsequent $23.8 billion agreement extending to 2031, with the Inspector General’s Office urging stronger price oversight. Boeing agreed earlier this year to pay a $51 million fine for 199 violations of arms export regulations.
Foreign Boeing employees in China and other regions had accessed sensitive data on fighter jets, including F-22, F-18, F-15 aircraft, AH-64 Apache helicopters, and even Air Force One technical specifications. Russia and Israel both had access to some leaked information. Boeing strengthened its review process and appointed a compliance officer after the scandal broke out.
In 2021, Australia terminated the procurement of Airbus Tiger helicopters and instead opted for Boeing AH-64E Apache Guardian helicopters. Then Australian Defense Minister Linda Reynolds emphasized that Apache had an outstanding record of combat validation.
Since 2018, Boeing’s debt has risen to $57 billion, and the strikes have forced the company to lay off employees, impacting 17,000 positions. Boeing has also incurred losses in some contracts, such as the KC-46 tanker project exceeding costs by over $7 billion and Air Force One overshooting the budget by about $3 billion.