{"id":17097,"date":"2020-04-29T14:52:20","date_gmt":"2020-04-29T14:52:20","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2020\/04\/29\/boeing-gets-another-827m-charge-on-the-kc-46-program\/"},"modified":"2026-08-07T21:35:16","modified_gmt":"2026-08-07T21:35:16","slug":"boeing-gets-another-827m-charge-on-the-kc-46-program","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/air\/2020\/04\/29\/boeing-gets-another-827m-charge-on-the-kc-46-program\/","title":{"rendered":"Boeing gets another $827M charge on the KC-46 program"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2014 Boeing took a $827 million hit <a href=\"https:\/\/www.defensenews.com\/industry\/2018\/10\/24\/boeing-adds-another-179m-in-cost-overruns-to-kc-46-as-delivery-draws-near\/\" target=\"_blank\">as cost overruns continue <\/a>for the KC-46 tanker program, the company announced Wednesday.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">About $551 million of the pre-tax charge was caused by new expenses associated with designing and integrating a <a href=\"https:\/\/www.defensenews.com\/breaking-news\/2020\/04\/02\/done-deal-boeing-will-have-to-rip-and-replace-kc-46-sensor-and-camera-systems-on-its-own-dime\/\" target=\"_blank\">new Remote Vision System for the tanker <\/a>as part of an April agreement with the Air Force.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The remainder of the charge reflected \u201cproductivity inefficiencies and COVID-19 related factory disruption,\u201d according to a news release. KC-46 production <a href=\"https:\/\/www.defensenews.com\/coronavirus\/2020\/03\/23\/kc-46-p-8-production-to-stop-as-boeing-temporarily-shuts-down-production-in-puget-sound-area\/\" target=\"_blank\">stopped for about three week<\/a>s over the past month due to a temporary shutdown at Boeing facilities in the Seattle area \u2014 including the factory in Everett, Wash., <a href=\"https:\/\/www.defensenews.com\/industry\/2020\/04\/13\/boeing-to-reopen-the-kc-46-and-p-8-production-lines\/\" target=\"_blank\">where the tanker is produced<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With the new charge, Boeing has now racked up about $4.6 billion in cost overruns over the life of the KC-46 program. Those expenses must be completely paid by Boeing under the terms of the $4.9 billion fixed-price firm contract it agreed to in 2011.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The bill comes as Boeing contends with the continued grounding of the 737 MAX and instability to the air travel market posed by COVID-19, which has led to lost orders and disruptions throughout the company\u2019s production lines.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the RVS deal struck in April could potentially mark a new chapter for the tanker program, which has been mired in disputes between Boeing and the Air Force for years.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The RVS \u2014 integrated by Boeing with cameras and sensors from Collins Aerospace \u2014 feeds live video and other data to the boom operator, who is able to use those cues to pump gas into another aircraft. But the Air Force has complained that the system does not work properly in all lighting conditions, leading to an increased risk of the KC-46 accidentally scraping the aircraft receiving fuel.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under the terms of the new deal, Boeing will make incremental hardware and software improvements to the existing system, but it will also design a new \u201cRVS 2.0\u201d with high-definition color cameras, better displays and improved computing systems not on the market when the first RVS was developed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">During an earnings call with investors on Wednesday, Boeing CEO Dave Calhoun said the defense market continues to be healthy with solid demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Overall, first quarter revenue for Boeing\u2019s defense sector decreased to $6 billion, down from about $6.6 billion in 2019. Most of that reduction was due to the KC-46 charge, according to the company, but a number of other defense programs were also impacted by the coronavirus pandemic, leading to reduced margin.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><i>This story is developing. Check back with Defense News for more details.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Most of the charge is the result of expenses associated with the tanker&#8217;s troubled Remote Vision System.<\/p>\n","protected":false},"author":7,"featured_media":28889,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":7,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[7,160,12,36],"tags":[],"coauthors":[3384],"class_list":["post-17097","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-air","category-daily-news-roundup","category-industry","category-newsletters"],"acf":{"subheadline":"","legacy_arc_id":"AML5RYWHU5C4XPXPZSXGHGBT64","arc_canonical_url":"\/air\/2020\/04\/29\/boeing-gets-another-827m-charge-on-the-kc-46-program\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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