Boeing’s Pentagon Takeover

Boeing’s growing clout with U.S. President Donald Trump’s Pentagon can no longer be ignored.

Trump announced Sunday morning on Twitter that he is forcing outgoing Defense Secretary James Mattis to leave earlier than expected, and he named Deputy Secretary of Defense Patrick Shanahan, a former Boeing executive, as acting secretary. Mattis, a retired Marine general, was slated to leave at the end of February. Shanahan will now take over on Jan. 1.

“Patrick has a long list of accomplishments while serving as Deputy, & previously Boeing. He will be great!” Trump tweeted.

Although Shanahan has not been formally tapped for secretary of defense, which requires Senate confirmation, sources say he is one of the White House’s top picks for the job.

Shanahan’s ascent is just the latest manifestation of the growing influence the world’s largest aerospace company has in Trump’s Pentagon. In the last six months, Boeing has won three multibillion-dollar competitions for major Department of Defense aircraft programs, despite massive delays in delivering a new tanker fleet to the U.S. Air Force.

Now, senior Pentagon leaders are forcing the Air Force to purchase a new version of Boeing’s legacy F-15 fighter, a non-stealth jet that first flew in 1972, which will compete for the Air Force’s limited resources with Lockheed Martin’s new F-35 fighter jet.

The reportedly $1.2 billion proposal to buy a dozen new variants of the “F-15X,” the same version of the aircraft Boeing is building for Qatar, reflects Boeing’s outsize influence with senior leaders in the Trump administration, a phenomenon that dates back to the beginning of the president’s term. As early as February 2017, Trump floated buying additional Boeing F/A-18 Super Hornet fighter jets, instead of the F-35. The U.S. Navy placed an order for over 100 new Super Hornets this spring.

Trump also has a personal relationship with Boeing CEO Dennis Muilenburg. The two men negotiated directly to reach a $3.9 billion deal for a new Air Force One presidential aircraft, which Trump claimed saves taxpayers $1.4 billion.

Certainly, Boeing has fought hard to offer the Pentagon its products at extremely competitive prices and allowed the department to boast considerable cost savings.

Boeing has adopted “an across-the-board aggressive posture in lobbying, pricing, and product development, largely due to fears that they were being eclipsed,” said Richard Aboulafia of the Teal Group. In addition, “very strong profits from Boeing’s commercial jetliner side … permits more aggressive bids by the military side.”

Boeing declined to comment.

There is no indication that Boeing has an unfair edge in Pentagon procurement, but sources said the trend is nevertheless concerning.

The F-15X “is being forced on the Air Force” by senior Pentagon leaders, said one source with knowledge of the discussions. The same senior leaders are simultaneously trying to persuade the U.S. Marine Corps to buy Boeing’s F/A-18 Super Hornet, a newer version of another non-stealth aircraft first flown in the Vietnam War era, the source said.

“It is interesting that fourth-generation aircraft, an option which has been completely off the table for the Air Force and Marine Corps for two decades, is now thrust on the table and done so by senior leadership wholly outside the services,” the source said.

Experts said buying F-15Xs does not make financial sense for the Air Force. The F-15X is an “entirely new airplane given systems and structural updates” that would likely stand alone as its own fleet, much like how the C-model and E-model F-15s are treated as different types. This would drive require a separate infrastructure, injecting “massive significant programmatic and sustainment costs” over the life of the fleet, said Doug Birkey of the Mitchell Institute for Aerospace Studies Air Force Association.

While the F-15 carries more missiles than the F-35, the non-stealth aircraft will not be able to survive against a near-peer enemy such as Russia or China, which both have advanced anti-aircraft missiles and air superiority fighters. The only way such an aircraft would have a chance of surviving in that environment is if it were flanked by robust electronic warfare and surface-to-air missile radar-suppression capability—much of which the Air Force divested in the 1990s, according to Birkey.

“That’s a very expensive way of doing business and drives risk far higher,” Birkey said. “This isn’t about a one-to-one comparison with the F-35—it’s two entirely different ways of fighting.”

“It’s a troubling path,” Birkey continued. “Our concern is you are going to get this very small fleet, it is going to be a stepchild that is going to suck up finite resources, and it is not going to be usable in the missions in which you need to help the most.”

The F-15X proposal, which was first reported by Bloomberg, will be included in the Air Force’s upcoming budget request to Congress.

The Pentagon would not confirm the proposal on the record.

“Since we are still in the pre-decisional budget coordination, the department won’t comment on the budget until it is released,” said Defense Department spokesman Lt. Col. Mike Andrews.

Chief Pentagon spokesperson Dana White said Mattis is focused on a smooth transition.

“The Secretary of Defense serves at the pleasure of the President,” White said. “Sec Mattis will work with Deputy Shanahan and department leadership to ensure that the DOD remains focused on the defense of the nation during this transition.”