Army's bid to cut Boeing's helicopters meets resistance
By TONY CAPACCIO | Bloomberg | Published: May 1, 2019
A coalition of lawmakers, including Democratic presidential candidate Cory Booker, is working to blunt the Army's plan to stop buying a model of Boeing's Chinook helicopter for at least five years.
Booker was one of nine senators with home-state interests who signed an April 1 letter urging their chamber's defense policy and appropriations committees to block the proposal. A similar March 28 letter from House lawmakers from affected locales went to leaders of that chamber's defense panels.
The Army's proposed budget calls for saving $962 million through 2024 by cutting 28 of 68 previously planned Chinook heavy lift helicopters — all 22 of an upgraded standard model plus six of a version for special operations.
The Chinook proposal is the most controversial part of the Army's plan to shift through 2024 as much as $31 billion saved from trimming 186 existing programs and lowering troop levels into new projects intended to position the service for a potential conventional conflict with Russia or China.
It's also a test for the lobbying clout of Chicago-based Boeing, its congressional allies and its workers. Boeing spent $15 million last year on lobbying, the third-most among corporate spenders behind Google and AT&T Inc., according to disclosures filed with the Senate.
The Senate letter said that halting Chinook purchases could cost 1,000 jobs across the nation, illustrating the geographical reach of Boeing's influence.
All of the members who signed it have parochial interests in the issue: They're from Pennsylvania, Delaware and New Jersey, where the Chinook is built or where most of its workers live; from states like Montana, where the Army National Guard flies the helicopter; or from Arizona, where Boeing wields influence because it makes its Apache copters there.
"Boeing leadership expressed support for our modernization strategy, and said they would support our budget," Army Secretary Mark Esper said in a statement. "So it's not entirely clear now why they are taking this position."
But Boeing signaled it's not ready to give in on the Chinook.
"Chinook symbolizes our country's commitment to help soldiers complete their missions and return to their families," company spokesman Jerry Drelling said in a statement. "We look forward to providing future capabilities through our continued partnership with the Army."
Another Boeing official, who's familiar with the discussions with Esper, said the company didn't tell him it accepted the Chinook cuts.
In an interview, Esper said that "we've got to free up the money" for the Army's future helicopter needs. The service's five-year request for a program to develop new vertical-lift aircraft is now $5.38 billion, up from $690 million.
Esper said in the interview that although he was aware of the congressional opposition he's yet to see push-back from defense committee leaders.
"The proof will be in the mark-ups," he said, referring to the crafting of the defense policy bill that's due to begin in May with the Senate Armed Services Committee, followed by its House counterpart.
House Armed Service member Rep. Mary Gay Scanlon is likely to be among those fighting the proposed halt in procurement. Scanlon, a Pennsylvania Democrat who represents the district of Boeing's Chinook plant, has said the cut will jeopardize some of its 4,580 workers. Forty percent of them live in her district.
Army Under Secretary Ryan McCarthy said in an interview that "I understand industrial base concerns," but he said that contractors seeing programs cut should focus on the "tremendous opportunities" for aviation programs from future projects.
An example is Boeing's unit in Mesa, Arizona, one of five winners of awards announced April 23 to produce prototype designs for the Future Attack Reconnaissance Aircraft. The work could be valued at as much as $772 million.
McCarthy also noted that the Chinook could continue to be produced for potential foreign military sales, including to the U.K. and Saudi Arabia.
"We're going to reach out" and talk with the senators who wrote to champion the Chinook because they're not on the defense committees and might not be familiar with the Army's thinking, McCarthy said. "We've got to work a little harder to make sure they have a full appreciation of the decisions."
Bloomberg's Bill Allison contributed.