Ridley Boeing plant wins $4B helicopter contract

Boeing Co.'s Delaware County factory received a $4 billion contract from the U.S. Army to build 177 CH-47F Chinook helicopters, with deliveries starting in 2015, the defense contractor said Tuesday.

The five-year deal ensures steady work at the Ridley Township facility through the end of the decade and includes options that allow the Army to purchase up to 38 more of the tandem-rotor transport helicopters, Boeing said.

In an era of defense cutbacks from the winding down of wars in Iraq and Afghanistan and automatic across-the-board reductions in defense spending under a controversial federal budget agreement, a veteran defense analyst was surprised by the deal.

"It's almost like the politics of the last year or two just flew out the window. It's weird," said Richard Whittington, of Drexel Hamilton L.L.C.

Boeing's announcement emphasized the $800 million in taxpayer savings enabled by the five-year deal, as opposed to annual purchases, which make it hard to get lower prices from suppliers.

"This multiyear contract provides unprecedented savings for the U.S. Army and American taxpayers," Col. Robert Barrie, Army project manager for cargo helicopters, said in the announcement.

Boeing, which recently announced the layoff of 41 union workers, is now producing five Chinooks and three V-22 Osprey tilt-rotor aircraft each month at the factory that stretches between I-95 and the Delaware River south of Philadelphia International Airport and has provided well-paying blue-collar jobs for generations.

The plant employs 6,200, a figure that is not expected to change much despite the new contract.

"We don't anticipate any major increases in hiring," Boeing spokesman Andrew H. Lee said. "The great thing about this multiyear contract is that it builds a lot of stability into the workforce both for Boeing and our supply base," Lee said.

The Boeing plant, which operates three shifts a day, is still building Chinooks under a previous five-year $4.3 billion Army contract announced in 2008. That base contract was for 181 helicopters, with options for 34 more.

In anticipation of a new deal, Boeing recently spent $130 million to modernize and expand its Chinook operation, which is housed in a building that was built in 1929 by Baldwin Locomotive to manufacture railcars.

The Army's long-term plan calls for the purchase of 464 CH-47Fs. It now has 241 of the aircraft. Chinooks, which typically have a 30-year service life, first went into production in the early 1960s.

Chris Owens, president of United Auto Workers 1069, which represents mechanics, technicians, and others at the plant, called the new contract great news for the plant and for the region, but remains puzzled about the layoffs, which were announced this month and are expected to be completed over the next several months, according to the union.

"The company is staying pat in their answer to me that it's a business decision to stay competitive," Owens said.

"We're hoping we can either slow it down or stop it completely," he said.

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