:: February 2000 Newsletter ::
There are few things that make me happier than NEW DEFENSE BUDGET DAY! Yes, it’s that time of year—the FY2001 budget has arrived. I feel like a kid at holiday time, when the Sears Christmas catalogue would arrive, with color photos of toys I might one day possess. I would pore through it, eagerly imagining a new mountaintop home for my GI Joe dolls, complete with a missile defense system (that worked).
Except this year’s catalog has about six toys. No, I don’t think you could call this a Christmas budget. Fighter procurement remains anemic, with a request for 52 planes (plus 10 Harrier rebuilds), up from 33 in FY1999 and 51 in FY2000. Certainly one of the more important (and weird) aspects of the FY2001 budget is the C-17 cut, from 15 planes to 12. The rationale is that DoD feels confident that the UK RAF will buy or lease these three C-17s. This is certainly a potential major market breakthrough—the first export of a US strategic transport. But if it doesn’t happen, isn’t DoD still obligated to buy them because of the MYP contract? And haven’t we learned our lesson after the heavy-handed and disastrous JSTARS sales effort?
Comanche RDT&E has grown but again, without a plan to pay for procurement of this impressive but unfunded machine, this increase is meaningless. Meanwhile, Lockheed Martin got the C-130J procurement it wanted for Christmas—two vanilla C-130Js and two KC-130Js. The latter may even be plus-upped in Congress—the USMC KC-130J fleet is quite old. But, if John McCain is our next president, the C-130 is in some trouble—while he’s pro-defense, he regards the Hercules as pork.
In other news, European nations have followed through on their proposal to create a common structure for defense and crisis management. Are they funding a joint transport fleet, or at least an A400M program start? A joint mobile reaction force? A common arms procurement agency? A new JSTARS or ground surveillance force for Europe? Well, not exactly. According to a prominent story on page two of the Financial Times (Feb. 12), the new structure contains the following swift and decisive action items (as Dave Barry would say, I swear I am not making this up):
“An interim political and security committee comprising representatives of the member states at senior official or ambassadorial level to manage and help develop policy.”
“An interim military body comprising representatives of the member states’ chiefs of staff to give military advice to the political and security committee and Javier Solana, the EU’s foreign policy supremo.”
“National military experts seconded to the general secretariat of the EU council of ministers to advise the military body and Mr. Solana.”
And that’s it, or at least that’s what I read before my eyes began to glaze over. Apparently, production of bureaucrats (and associated office equipment) is to increase by 30%. So it just goes to show: no matter how unimpressive the US defense budget is, the Europeans have it worse.
All is far from lost in Europe, however. Flight International has broken the story that Malaysia is close to selecting the A340-500/600 over the 777-X. Ouch. That would eliminate a potential 777-X launch customer. EVA may be close to signing, but MAS would be a major defeat for Boeing. Worse, if Singapore decides to follow MAS (there’s a first) and stick with Airbus for its long-haul needs, Boeing may have reason to regret its GE-only 777-X strategy. Some key 777 users really prefer Rolls-Royce, and it might be a bigger issue than Boeing believed.
Meanwhile, an engineer’s strike has stopped Boeing’s deliveries. The SPEEA people sound genuinely enraged. I’m not a huge fan of everything organized labor does, but it does seem that Boeing’s attitude towards labor relations has gotten somewhat confrontational—the company barely got through negotiations with the machinists, now the engineers are mad at them. If this isn’t resolved soon, Boeing might miss its target of 480 planes delivered in 2000.
Speaking of which, I’ll have a Commercial Jet Transport overview update next month. Send me an e-mail if you want an advance copy of the deliveries spreadsheet. I’ll also update the Fairchild Dornier jet families, Harrier, S-76, Falcon, Dauphin, P-3, and others.
As for this month’s supplement, the highlight is an A3XX report—with a production forecast! There are two overviews—Fighters and Special Mission Aircraft. If you want a color copy of the first, send me an e-mail, and I’ll send it back in Acrobat format. I’ll be back in my office on March 1st
Yours, ‘Til Teal Group Is A Line Item On The Budget,
© Richard Aboulafia 1997-2006, All rights reserved.