Can Boeing Weather Storm of Defense Cuts?
July 22, 2012
As Congress stares down a legal deadline to rein in the nation's runaway budget deficit, defense spending has become the prime target.
And that puts contractors including Boeing's defense division -- which relies almost entirely on military contracts -- in the cross hairs.
Still, analysts remain cautiously optimistic that the Hazelwood-based Boeing Defense, Space & Security can weather the potential loss of all or part of its $5.3 billion contract to produce 124 F/A-18 fighter jets for the U.S. Navy by 2015.
Boeing's defense business also has clients other than the Uncle Sam, which will help cushion a drop in U.S. military spending.
An agreement to provide F-15s to the government of Saudi Arabia, coupled with a potential deal to sell F/A-18 that the company may soon seal with Brazil, could go a long way to fill the void and preserve Boeing's local jobs through the end of the decade, analysts say.
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