How is Boeing Going to Steal Lockheed’s Business?

Boeing (NYSE:BA) is hoping a big letdown for competitor Lockheed Martin (NYSE:LMT) will give it the upper hand in landing more military aircraft contracts.

The Pentagon has proposed delaying the purchase of 179 Lockheed Martin F-35s as the first batch of the fighter aircraft exceeded their target budget by $1 billion and the company made delays in deliveries. The Pentagon is trying to cut $487 billion from its budget over the next decade.

Boeing wants to make the most of Lockheed’s potential loss. In a document distributed to members of Congress, the Chicago-based Boeing pressed lawmakers to sanction additional production of its Super Hornet fighter jets, valued at about $2.5 billion. Boeing’s current contract, worth $5.3 billion for 124 aircraft, ends in 2013. Boeing wants $60 million for advance purchases of materials to keep building F/A-18 E/F Super Hornets beyond 2015.

The world’s largest aerospace company said the additional money would help it prevent the shutdown of the aircraft’s assembly line in St. Louis, helping to reduce the potential for a shortage in Navy jets. Boeing added that its Super Hornet program supports 100,000 jobs and has 1,900 suppliers, including Northrop Grumman (NYSE:NOC), General Electric (NYSE:GE), and Raytheon (NYSE:RTN).

The company seems to have convinced some members of Congress already. Senator Claire McCaskill (D-Mo.) said adding Super Hornets would be “a bargain” to the Navy. “We need the jets on the carriers,” McCaskill told Bloomberg.

The Navy plans to move completely to a combination of Super Hornets and F-35s plans and retire the older versions of the F/A-18. Will Lockheed’s loss be Boeing’s gain?

To contact the reporter on this story: Aabha Rathee at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com