thedrifter
06-18-07, 06:32 PM
US Marines Expect Rising Metals Costs To Push Up V-22 Price
June 18, 2007: 06:56 PM EST
PARIS -(Dow Jones)- As the U.S. Marines negotiate a $10 billion long-term contract for V-22 Osprey aircraft, they expect to pay the price of rising metals costs, the Pentagon's program manager said Monday.
Marine Col. Mathew Mulhern said the proposed long-term contract will trim some of the Osprey's current $70 million per-aircraft price tag. But contractors Boeing Co. (BA) and Textron Inc.'s (TXT) Bell Helicopter unit probably won't reach the $58 million cost target they have set for the program, Mulhern said in an interview at the Paris Air Show.
"We're not on a course right now to get to the $58 million," Mulhern said. " Specialty metals have taken a big chunk."
The proposed multi-year contract would set terms for a 167-aircraft Osprey purchase. The new aircraft can take off like a helicopter but fly like a plane, allowing them to fly higher and faster than traditional helicopters. The Marines say this will protect troops from ground attacks, particularly since the Ospreys aren't required to make as many refueling stops as older aircraft.
Mulhern said the Marines hope to close the deal in December 2007. But if the long-term contract doesn't come through, the V-22 program faces higher costs and possible delays.
"The program's funded for the multi-year. The program's going to take a hit if we don't get this," he said. Right now, the deal is in the fact-finding stage and a lot of work remains to be done, he said.
The V-22 must pass a pair of big tests this fall. In September, the Marines will send the new aircraft to Iraq for their combat debut. Soon after, the Air Force version of the new aircraft will undergo operational testing and evaluation, a major step in the weapons buying process.
Either event is enough to strain the Marine Corps program office, which manages procurement for both services. Together, the two milestones present a huge challenge for the fledgling Osprey program, Mulhern said.
Marines in combat will need steady access to spare parts and other support, and their needs would take priority if supplies run short. To guard against this risk, the Air Force has tried to stockpile supplies in advance and keep them separate from Marine Corps stores, Mulhern said.
In the long run, however, the two services will share maintenance and logistics services. The Marines are in line for the majority of planned Osprey purchases, but the Air Force aircraft will have more advanced equipment for flying special operations missions.
This year, the Marines and the Air Force have improved and strengthened their communication on maintenance and support issues, Mulhern said. The Pentagon wants to avoid a repeat of maintenance difficulties that plagued the Air Force during an earlier round of V-22 testing.
- By Rebecca Christie, Dow Jones Newswires; 202-862-9243; Rebecca.Christie@ dowjones.com
Ellie
June 18, 2007: 06:56 PM EST
PARIS -(Dow Jones)- As the U.S. Marines negotiate a $10 billion long-term contract for V-22 Osprey aircraft, they expect to pay the price of rising metals costs, the Pentagon's program manager said Monday.
Marine Col. Mathew Mulhern said the proposed long-term contract will trim some of the Osprey's current $70 million per-aircraft price tag. But contractors Boeing Co. (BA) and Textron Inc.'s (TXT) Bell Helicopter unit probably won't reach the $58 million cost target they have set for the program, Mulhern said in an interview at the Paris Air Show.
"We're not on a course right now to get to the $58 million," Mulhern said. " Specialty metals have taken a big chunk."
The proposed multi-year contract would set terms for a 167-aircraft Osprey purchase. The new aircraft can take off like a helicopter but fly like a plane, allowing them to fly higher and faster than traditional helicopters. The Marines say this will protect troops from ground attacks, particularly since the Ospreys aren't required to make as many refueling stops as older aircraft.
Mulhern said the Marines hope to close the deal in December 2007. But if the long-term contract doesn't come through, the V-22 program faces higher costs and possible delays.
"The program's funded for the multi-year. The program's going to take a hit if we don't get this," he said. Right now, the deal is in the fact-finding stage and a lot of work remains to be done, he said.
The V-22 must pass a pair of big tests this fall. In September, the Marines will send the new aircraft to Iraq for their combat debut. Soon after, the Air Force version of the new aircraft will undergo operational testing and evaluation, a major step in the weapons buying process.
Either event is enough to strain the Marine Corps program office, which manages procurement for both services. Together, the two milestones present a huge challenge for the fledgling Osprey program, Mulhern said.
Marines in combat will need steady access to spare parts and other support, and their needs would take priority if supplies run short. To guard against this risk, the Air Force has tried to stockpile supplies in advance and keep them separate from Marine Corps stores, Mulhern said.
In the long run, however, the two services will share maintenance and logistics services. The Marines are in line for the majority of planned Osprey purchases, but the Air Force aircraft will have more advanced equipment for flying special operations missions.
This year, the Marines and the Air Force have improved and strengthened their communication on maintenance and support issues, Mulhern said. The Pentagon wants to avoid a repeat of maintenance difficulties that plagued the Air Force during an earlier round of V-22 testing.
- By Rebecca Christie, Dow Jones Newswires; 202-862-9243; Rebecca.Christie@ dowjones.com
Ellie