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National Defense > Blog > Posts > Boeing Exec Predicts First International V-22 Osprey Sale Next Year
Boeing Exec Predicts First International V-22 Osprey Sale Next Year
By Stew Magnuson



The Boeing Co. is anticipating opening up new international markets next year for both its CH-47F Chinook heavy lift helicopter and the V-22 Osprey, a senior company executive said Oct. 24.
 
“I firmly believe we will have our first international sale sometime in 2013, or no later than the first quarter of 2014,” Mark Ballew, Boeing’s director of business development for mobility rotorcraft, said of the tilt-rotor Osprey it produces in partnership with Bell Helicopter.
 
He would not reveal the name of the first international customer, but added that there were in-depth discussions with a handful of other countries interested in the aircraft as well.
 
“It is more than, ‘Here is a V-22 and what it does.’ It’s, ‘What are the delivery dates? What would be the supportability concepts?” he told National Defense on the sidelines of the Association of the United States Army annual conference in Washington, D.C.
 
Further, there are three new countries close to signing contracts with Boeing for its recently upgraded F-model Chinooks. “We think we will have two, if not three contracts next year.”
 
Boeing already sells the dual-rotor aircraft, which has been in production since the early 1960s, to nine nations.  It is currently delivering a variant to Canada. Italy and the Netherlands also recently put in orders. One of the new nations may be India, which is looking to buy either Chinooks or Russia’ s MI-26. Ballew expects India to decide by the end of the year, and for negotiations on a 15-aircraft contract to begin shortly thereafter.
 
Meanwhile, Boeing is waiting for the U.S. budget process to get resolved in order to move forward with multi-year contracts on both the Chinook and Osprey. For the Army's CH-47F, the contract would be for 155 aircraft with options for 60 more for foreign military sales that would keep the production line going until about 2020. For the Osprey, the Marine Corps is looking to purchase 91, with an additional seven for Air Force Special Operations Command.
 
Multi-year contracts allow for lower purchase prices by making the long lead time for materials and components more predictable, and give Boeing the ability to buy materials in bulk. However, they do lock the military into contracts that cannot be adjusted during austere times.  
 
“We are all striving to get this multi-year award. There has been nobody [in the Army] who says, ‘no we don’t want the multi-year award.’” Boeing hopes the contract is awarded as soon as the budget is authorized. It is looking to international contracts to offset the risk that it is pushed back to April or May if there is an impasse in Congress.
 
“Our goal is to be able to sustain our current level of work, not to have to lay anybody off,” Ballew said.

Photo Credit: Defense Department


Comments

Re: Boeing Exec Predicts First International V-22 Osprey Sale Next Year

Yes, the next V-22 sale is always next year, to an undisclosed buyer. This has been reported every year for over two decades.

When our elite SEAL force flew into Pakistan to kill Osama Bin Laden, they chose old H-60 helicopters rather than their new CV-22s. Perhaps the H-60s were chosen because they are smaller, but the larger backup aircraft that were also used for this mission were CH-47s. As our military began its drawdown in Afghanistan, the first aircraft sent home were the new CV-22s! And the Marine Corps delayed the retirement of their 30 remaining 45+ year old CH-53Ds and sent them to Afghanistan, rather than send more new V-22s.

An amazing spin was how the Marine Corps increased its total buy from 360 V-22s to 384, claiming this will save $1.75 billion. Marine aircraft are purchased through the Navy. Three decades ago, the Navy expressed interest in 48 HV-22s for shipboard use, but found them unsuitable due to extreme downwash, and chose the MH-60S for this role over a decade ago. However, the V-22 program kept the Department of the Navy order of 408 V-22s on the books. As the final production run of the V-22 is planned, no one pretends the Navy will get 48 V-22s, so the Marines laid claim to the 48 extras, and announced that it would help "save" money by adding just 24 of the Navy's unwanted 48 V-22s to their order.

This game is working its way through Congress as the Bell-Boeing team works to lock-in another five-year production contract. They hope Congress will not notice the Marines added 24 V-22s to their requirement, and this five-year $8 billion buy increases the cost of each V-22 from $62 million in the current five-year contract, to $81 million for each of 98 more V-22s over the next five years, a 30% increase!
Carlton Meyer at 10/26/2012 11:30 PM

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