How the $1 trillion Boeing deal saved a U.S. manufacturer
Posted On July 2, 2021
Boeing’s $1.6 trillion deal to buy up to 60 percent of Lockheed Martin’s C-17 transport planes won’t go through Congress until early next year, and the administration will still need congressional approval to complete it.
The deal will allow the Pentagon to get the C-27J, a military jet that can carry up to 787 cargo, and to upgrade the C130J transport aircraft that can deliver nearly 2,000 troops to Iraq and Afghanistan.
Lockheed’s $6.8 billion deal to acquire General Dynamics Land Systems Corp. is expected to be completed by the end of the year, while Boeing’s is expected in early 2017.
Boeing’s deal will require Congress to approve a deal with President Donald Trump that will allow Lockheed to buy a majority stake in the C17 and C130 planes, which will be used for the wars in Afghanistan and Iraq.
Trump said in October that he would be happy to see Lockheed buy a “small percentage” of the planes.
“That’s what I’m happy to do, because I think it would be good for the American taxpayer, it would allow us to get a lot of jobs done, I think that would be a good thing,” Trump said.
Congress has been wary of buying up companies for military purposes, but a deal to sell a large chunk of Lockheed’s assets would be an exception.
Lockheed is the largest U.N. contractor in the world and has been lobbying Congress for years to purchase the C177 Globemaster III aircraft.
But Trump has refused to sign off on the deal.
He has called the deal a “disaster” and a “total failure” by U.K.-based Boeing and Lockheed.
In October, the Pentagon awarded the contract to Lockheed for up to $2.7 billion to upgrade C-130J aircraft to carry up a full complement of 1,500 troops to Afghanistan, Iraq and Somalia.
The U.C. Davis and California State University universities are also expected to get part of the cost.
This story was updated at 10:15 a.m.