ADVERTISEMENT

U.S. Wanting to Buy Fewer Chinooks Sees U.K., U.A.E. Buying More

U.S. Wanting to Buy Fewer Chinooks Sees U.K., U.A.E. Buying More

(Bloomberg) -- Boeing Co. is close to selling 24 Chinook helicopters to the United Arab Emirates and the U.K., according to Army Secretary Ryan McCarthy, a move that may assuage U.S. lawmakers who have rejected his service’s plans to curtail its purchases of the aircraft.

“I believe we will be the position here very shortly to take the next step for notification to Congress” of a proposed sale of 10 additional Chinooks to the U.A.E, with the U.K. likely to buy an additional 14, McCarthy said in an interview. “I’m personally involved with those efforts.”

The Army’s proposed five-year budget plan, starting in the current fiscal year, called for saving $962 million from fiscal 2021 through 2024 by cutting 28 of 68 previously planned Chinook heavy-lift helicopters and shifting much of the money into two new reconnaissance and transport helicopter programs. Both House and Senate appropriations panels rejected that plan in their pending 2020 spending measures, but the fight will be rejoined next year.

The Chinook cutback is the most controversial part of the Army’s budget strategy to cut as much as $31 billion from 186 existing programs through 2024 and to lower troop levels -- all to provide funds for new projects intended to position the service for a potential conventional conflict with Russia or China.

McCarthy and senior Army leaders say the service already has 10% more of the latest model Chinook model than needed.

U.S. Wanting to Buy Fewer Chinooks Sees U.K., U.A.E. Buying More

Philadelphia Plant

Army officials say the added foreign sales should be sufficient to ensure that scrapping 28 helicopters won’t cripple Boeing’s Philadelphia-area plant.

The U.K. is “going through the process with us on the pricing,” McCarthy said, and he met with his British counterpart a few weeks ago. “They’ll be back here in the November time frame” to keep working on details, he said, and agreement may be reached on a formal “letter of acceptance” next spring, one of the last steps to a contract.

McCarthy said the service is also looking at the potential to equip the Afghan National Security Forces with Chinooks “but that’s not nearly as mature at this point.”

“The CH-47 is largely alone in its class, and most militaries of any size need something large like this,” said Richard Aboulafia, a military aircraft analyst with the Teal Group. Export orders, continued U.S. special operations Army purchases and possible add-ons by Congress “will keep the line alive for the next five years at least,” he said.

The U.A.E. previously purchased 20 of the Chinook’s F model, the latest version, and the U.K. has 60 Chinooks of various versions. India and Singapore have recently purchased the copters directly from Boeing. The Chicago-based contractor also has additional potential sales opportunities for as many as 60 with Germany and 20 with Israel.

In their rejection of the Army’s cutback plan this year, the appropriations panels earmarked $28 million for purchases of advanced parts for more F models.

Boeing Victory

The committee actions represented a major victory for Boeing and a bipartisan group of lawmakers from Pennsylvania, Delaware and New Jersey, where the helicopter is built or where most workers live. The members had lobbied heavily against the Army’s proposal.

“Boeing is working closely with the Army and Congress on a number of sales opportunities,” said company spokesman Andrew Africk. “Given the timing and quantity of these potential opportunities, we remain concerned that plans to cancel or truncate the CH-47F Block II upgrade program will diminish capabilities available to soldiers and harm the U.S. defense industrial base.”

Asked if the Army had failed to communicate its rationale for Chinook cutbacks effectively, McCarthy said, “Congress wants to know that there is a lot of vigor behind our methodology.”

“Congress is just asking, ‘How did you do it?’” McCarthy said. The proposal has generated “a lot of churn and energy, and we want to make sure that doesn’t turn into angst and aggravate them.”

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert

©2019 Bloomberg L.P.