Boeing flops, then flips, on JCA

A team that included L-3 Communications, Alenia Aeronautica and Boeing was selected to deliver the Alenia C-27J for the US Army and US Air Force.

L-3 is the prime contractor and Alenia is the platform supplier. Boeing had agreed to open and operate a second final assembly in Jacksonville, Florida, but the precise terms were never finalized.

Negotiations between Boeing and Alenia over the former's role have now ended without resolution.

"After negotiating with no real success, we jointly made the decision that Alenia could not afford to delay our investment anymore in Jacksonville," Alenia said.

However, Boeing has made conflicting comments. Last week, a Boeing spokesman told The Hill newspaper in Washington DC that the company had ceased negotiations with Alenia.

But Chris Chadwick, Boeing's president of precision engagement and mobility systems, told reporters on Monday that negotiations remain ongoing.

Chadwick says "we're trying to close the business case" with Alenia regarding JCA.

Both Alenia and L-3 officials emphasized that Boeing's departure will not affect the delivery schedule. The JCA contract calls for the first C-27J delivery to the army before October.

"We're perfectly confident this is not going to have anything to do with schedule or delivery," L-3 says. L-3 also described Boeing's participation as an "exploration of a business relationship" that involved Alenia and Boeing only; L-3 was not involved in the negotiations.

Boeing's participation in the JCA programme dates back to 2006 during a heated competition between the C-27J and the C-295, with the latter offered by Raytheon/EADS North America. Boeing joined the L-3/Alenia partnership shortly before the USAF agreed to join the army's programme.

At the time, L-3 declared that its new partner "brings the ability to establish a streamlined, process-based production facility in the U.S. that will ensure on-time delivery to the JCA customers."

The terms of the agreement remained in flux even after contract award, which occurred shortly before the Paris Air Show last year.

During the air show, Boeing disputed statements made by L-3 executives, who had told reporters that Boeing's role in final assembly would not begin until after the 20th aircraft was delivered.

In fact, Alenia and Boeing were negotiating to open the second final assembly line in 2010, when the team is scheduled to deliver the 10th through the 14th aircraft to the army.

Alenia now plans to take over Boeing's disputed role in the programme, opening and operating the second final assembly line for the C-27J by itself.

"We've been building this airplane for almost a decade," Alenia said. "We know how to build the airplane."

The shift would fit into Alenia parent Finmeccanica's strategic plans to expand manufacturing and sales in the North American market. Finmeccanica is seeking to close a deal to buy US defence electronics firm DRS Technologies. AgustaWestland, another Finmeccanica subsidiary, has successfully opened new final assembly lines for the A119 and A109 helicopters in Philadelphia.