Good News For Boeing In 2010 As More C-17 Transports Will Be Ordered

The Obama Administration had requested no more funds for the C-17 transport in the 2010 Defense Budget. They had acquiesced in their mind to the inclusion of funding to buy several more in the 2009 Defense Supplemental bill passed by Congress last Fall. The Defense Department and U.S. Air Force state that the current plan to buy 205 of the heavily used transports are sufficient. Obviously Boeing (BA) would like to sell as many of the aircraft as it can to both the U.S. and overseas customers.

Both the House and Senate went ahead and added money in the 2010 Defense Appropriations for more aircraft. The House for only three and the Senate ten. The program is popular as it certainly is a system seeing use and provides jobs across the country. This means that many different Congressional Representatives and Senators like to add money for more of the transports. The head Defense appropriator in the House, Rep. John Murtha (D-PA), says that in good news for Boeing that the final bill when it comes out of conference will include funding at the Senate level, not the House. Ten is always better then three.

The total bill for the acquisition of the aircraft will be around $2.5 billion. It is estimated that 5,000 jobs alone in California at the old McDonnell Douglas plant rely on the program for employment. Another 25,000 across the country are related to the production of the aircraft. Then there are those who fly, maintain, fuel and make parts to keep it going. The multiplier effect of all this is quite high and provides impetus to keep it going.

The White House and Pentagon argue that just buying the aircraft is not the only cost. The ten aircraft will average $10 million a year each to keep flying. If they fly for thirty years that is $3 billion in un-inflated dollars the defense budget will need to contain to fly the aircraft. Of course that money is buying additional lift and transport capability that will support U.S. operations across the world.

The last word will be the Presidents, but it is hard to imagine he will veto the bill over this inclusion. Congress probably has enough votes to over turn the veto and the aircraft have a use waiting for them. There is also the consideration of jobs in the current “jobless” economic recovery. In fact one could argue as many have that buying military hardware would be one way to stimulate the economy. Somehow that wasn’t considered last March when the “Stimulus” bill was passed.