Boeing awaiting fate of Chinook Block II funding in U.S. defense budget

Boeing is “anxiously awaiting” a final U.S. defense budget for the new fiscal year, hoping that Congress will override the Army’s decision to cut all funding to a major CH-47 Chinook upgrade program.

Many lawmakers were concerned that canceling Block II upgrades for the Army’s CH-47F helicopters could harm Boeing and its supply chain. Boeing Photo
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Three of the four congressional defense committees voted to restore funding for the program in their versions of the 2020 National Defense Authorization Act (NDAA) and appropriations bills that pay for it. Now the House and Senate versions of the final budget bills must be reconciled, which could happen as soon as next week.

Many lawmakers were concerned that canceling Block II upgrades for the Army’s CH-47F helicopters could harm Boeing and its supply chain. Boeing is on contract to build three Engineering and Manufacturing Development (EMD) test aircraft, but the Army stripped procurement funding for the upgrade kits in its five-year spending outlook.

Boeing is pushing ahead with its assigned work under the EMD phase, hoping Congress will disagree with the Army’s assessment that the Block I configuration is sufficient until a new future heavylift aircraft comes online.

“EMD is going well,” said Chuck Dabundo, Boeing’s H-47 program manager. “It’s steadily been on course, on cost, on schedule. … We’ve been working closely with the Army and Congress. We are aware that three of the committees marked to restore funding in the FY 20 budget and we are anxiously awaiting that budget to be released to see what gets finalized.”

The first two EMD aircraft are complete and have been ferried out to Mesa, Arizona, where they are undergoing flight testing, he said. They are scheduled for limited user testing with the U.S. Army late next year.

The third test aircraft is in the company’s delivery center in Philadelphia and getting ready to fly to Huntsville, Alabama, for a month of testing at the Army’s aviation center of excellence there. It then will fly to Naval Air Station Patuxent River in Maryland for further assessment by government engineers.

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“There hasn’t been any real impact yet,” said Randy Rotte, Boeing’s director of global sales and marketing for cargo helicopters. He pointed out EMD is leading to a planned production decision in fiscal 2021, when the Army will ultimately decide whether to upgrade some or all of its 542 Block I Chinooks.

So, the program effectively is funded through fiscal 2021. The Army did include about $18 million in long-lead time materials in its 2020 budget submission but defunded production in its outlook. That’s what Boeing is hoping gets restored.

“Both appropriations put that funding in their version of the bill and now we’ll see what comes out of conference and that will protect the schedule,” Rotte said. “It really now will be up to, in February, when the next . . . budget comes out, what’s in it for Block II.”

“As you might expect,” Rotte added, “if there is one year of gap, our list of actions that we could take is different than if it’s five years, in terms of our suppliers, what we’d be willing to take risk on.”

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