The possible sale of seven dozen F-15 fighter jets to Saudi Arabia would keep Boeing Co.'s St. Louis defense division viable for years to come, analysts said.
The Wall Street Journal reported Monday that the deal with the Saudis had been reached and put the value of the deal at $30 billion. The fighters sold to the Saudi government would be modified in deference to security concerns expressed by Israeli defense officials.
"It's taken a long time to finalize the deal, and now we know why," said Richard Aboulafia, a defense industry and aviation analyst with the Teal Group in Fairfax, Va. "Eighty-four is a fantastic number."
Bloomberg Businessweek reported the sale would include the production of 72 Black Hawk helicopters, manufactured by the Sikorsky unit of United Technologies Corp, and the refurbishment of 70 existing F-15 fighter jets.
Sources told Businessweek that congressional notification of the contract should occur within two months. A Boeing official here said she could not confirm the transaction, noting that such a deal would be brokered between the U.S. and Saudi governments.
"It's strictly a government to government sale, so we can't talk about it," explained Boeing spokeswoman Patricia Frost.
But Aboulafia, an independent authority on defense industry matters, said, "It's a fair bet (the deal) will keep the line going until at least 2016 or 2017."
The F-15 announcement was not the only news affecting Boeing production in St. Louis.
Bloomberg News reported late Monday afternoon that Boeing is in line for a $7 billion contract to further the air life of "older" F/A-18 fighters in U.S. Navy fleet. Boeing manufacturers the F-18, also known as the Super Hornet, which is produced at the company's Hazelwood assembly plant.
Bloomberg said the government decided to extend the life of the F-18 fleet because of delays in production of new F-35 Joint Strike Fighters by the Lockheed Martin Corp. The $382 billion F-35 program is four years behind schedule.
Boeing builds the E/A-18G Growler and C-17 military transport components in addition to the F-15E Strike Eagle and the Super Hornet in Hazelwood. The defense contractor manufactures munitions at a separate facility in St. Charles. Nearly 12,300 people are employed at the two locations.
Aboulafia said the F-15 contract will help offset ongoing rumors and reports that F-18 production in Hazelwood may be curtailed.
The Navy announced in May that it has contracted with Boeing to build 66 Super Hornets and 58 Growlers. The deal is expected to be finalized in the near future.
Boeing spokesman Philip Carder said Monday the F-18 line is now projected to remain operational into 2015.
Aboulafia said the F-15 deal "buys" even more time for the St. Louis division.
"Now they can keep taking orders for six or seven years," the analyst said.