About $1.15 Billion Defense Contract Goes To Boeing Operation Based In Mesa
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$1.15 Billion Defense Contract Goes To Boeing Operation Based In Mesa info
December 28, 2006
Apache copters' work will extend into 2010 at plant
By Jason Massad, East Valley Tribune
Boeing's plant in Mesa has won a $1.15 billion contract from the U.S. Department of Defense to rebuild 126 Apache helicopters over the next three years.
The contract calls for Boeing to overhaul older Apache helicopters with millions of dollars in technology upgrades. The U.S. Army would receive 96 helicopters while 30 would be delivered to a foreign military.
The contract is part of an ongoing effort by the Defense Department to modernize its fleet of roughly 700 Apache attack helicopters, a workhorse in Iraq and Afghanistan.
The contract also answers some questions about Boeing's short-term future at Falcon Field Airport in Mesa. With the company's next major defense manufacturing contract pushed back until 2010, the new contract means that Boeing could stem any potential layoffs of its 4,700 workers at Falcon Field and avoid halting business with local contractors.
The company has a $2.3 billion economic impact on Arizona every year, employing nearly 90 percent of its work force in Mesa and putting $572 million into the pockets of the state's defense suppliers, according to an Arizona State University study.
"That's what I think is exciting. You have gap funding through to the next major contract," said Councilman Rex Griswold.
Representatives of the Arizona Department of Commerce said the contract was a boost to an aerospace export industry that already ranks among the top 10 in the nation.
"This is tremendous news for Boeing and Arizona. The aerospace industry is alive and well," said spokesman David Drennon.
The Boeing plant is scheduled to begin the Apache overhauls next year.
For the project, Army's older Apache models, with analog technology, are stripped to the frame. The craft will be outfitted by Boeing with new digital wiring, upgraded radar systems to map battlefields and an improved weapon system. Each refurbished helicopter costs about $10 million, significantly less than the $25 million to $28 million it would cost to build one of the helicopters from scratch.
The Defense Department contract helps ensure that the Apache manufacturing line at Falcon Field doesn't stop. With an upcoming major deal to build 200 or more of the next generation of Apache helicopters in 2010, the order will keep the production line going in 2007, 2008 and 2009.
Boeing will likely avoid the costs it could have faced in reassigning or laying off workers, ramping down business with its suppliers and then rehiring workers and shouldering start-up costs associated with the manufacturing process in 2010.
News of the contract comes about a week after Boeing officials threatened that the plant at Falcon Field might have to be relocated if Mesa city leaders didn't protect Williams Gateway Airport, a base for test flights of the Apache helicopters, from a new housing development.
The 3,000-home development was approved by the Mesa City Council after an 11th-hour compromise with Boeing.
The new contract reinforces the importance of the Boeing plant, said Charles Deaton, executive director of the Mesa Chamber of Commerce. "We've always been so protective of the area," he said. "Boeing was serious about the problem it created for them."
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