Riddle me this, investor: What has two wings, carries 85 tons in its belly, and always seems about to crash from the load -- yet never does?
Answer: A Boeing
Boeing's neverending story
It's September again, Fools, and you know what that means. It's time to scan the skies over Capitol Hill, looking for flak targeting Boeing's C-17.
Yes, the U.S. Congress is once again balking at buying C-17s. Boeing says it needs the taxpayer to ante up for somewhere between 10 and 15 Globemasters to justify keeping the production lines running. Any less, and Boeing will begin winding down its extensive supply line. It will inform parts makers large and small, from United Technologies
So far, it's not looking promising. At last report, the House of Representatives was looking to fund just three more planes; the Senate, 10, max. If that's the best they can do, you can expect Boeing to repeat its 2006 gambit -- arguing that once it starts losing momentum, this program will grind to a halt in 2011. If that happens, it will take nearly 10% of Boeing's annual Integrated Defense Systems revenue with it.
Be careful what you wish for
Between its long lead time and its high price tag (around $200 million), you can understand why a cash-strapped Pentagon might want fewer C-17s. Yet every time it raises the hatchet, Boeing patiently reminds the generals that, yes, you can kill our golden goose, and yes, we'll wind down the program if you want -- but make good and darn sure this is what you want. Because Lockheed Martin's
This year, Boeing has added a new threat to its arsenal: a website explaining why we need more C-17s. Putting military requirements aside, Boeing touts the nearly 700 suppliers who help build the C-17, the 30,000 people employed in building the planes, and the $8 billion the program contributes to America's economy.and
Stay tuned. Your portfolio may depend on it.
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