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Boeing, U.S. Navy in talks about stretching EA-18G jet production

By Andrea Shalal

WASHINGTON, Dec 19 (Reuters) - The U.S. Navy on Friday said it was in talks with Boeing Co about slowing production of its EA-18G electronic attack jets to keep the St. Louis facility running through the end of 2017, after Congress approved funding for 15 more planes.

The Navy is seeking to modify Boeing's existing contract for EA-18G jets, or Growlers, and F/A-18 Super Hornets to add the extra jets funded by Congress in the fiscal 2015 U.S. budget, said Rob Koon, spokesman for the Navy's Naval Air Systems Command.

President Obama on Tuesday signed the fiscal 2015 spending bill into law. It includes $1.46 billion for 15 more Growlers, and up to $100 million to cover the cost of slowing the current production rate from three to two aircraft a month.

By building two jets a month instead of three, Boeing will be able to stretch jet orders through the end of 2017, preserving the tooling and jobs associated with the line for as long as possible.

Koon gave no details on the cost of "stretching" the production line, or when the two sides are likely to reach agreement on a modified contract.

Boeing spokeswoman Caroline Hutcheson said the company should be able to keep building planes through the end of 2017 given the added funding and an expected agreement with the Navy about slowing deliveries of jets already on order.

She said Boeing was ready to discuss possible additional orders with the Navy and the U.S. Department of Defense as they finalized their fiscal 2016 budget request.

Few details have emerged about the Navy's fiscal 2016 budget plans, but Chief of Naval Operations Admiral Jonathan Greenert last month told Reuters the Navy was looking at possible additional orders of Growlers for the period.

The Navy is also assessing whether to start upgrading or replacing the first 137 Boeing F/A-18E/F Block 1 jets delivered since they lacked AESA radar systems, which make the jets less vulnerable to enemy attacks.

Navy spokesman Rob Myers said the extra jets funded by Congress in fiscal 2015 would help ensure the Navy had "appropriate airborne electronic attack (AEA) assets" to meet its requirements and those of the joint force.

He said the funding also preserved the Navy's options to order more jets in the future, noting that the Defense Department was continuing to evaluate its "joint electronic warfare and strike fighter requirements."

Jets funded in fiscal 2016 would be built in 2018. Boeing has said it needs to build at least two planes per month to keep production costs economical.

To date, Boeing has delivered 527 of 563 F/A-18E/F Super Hornets ordered by the Navy, and 114 of 138 Growlers.

(Reporting by Andrea Shalal; Editing by Christian Plumb)