Boeing has added a loss of $217 million for the MQ-25 Stingray program, according to company earnings released today. The figure is part of over $3.3 billion in financial losses incurred across major fixed-price development programs like the T-7A Red Hawk and KC-46A Tanker.
The company attributes the loss to higher production costs for engineering and manufacturing development units than were anticipated, with the initial EMD units still proceeding through the factory. The increase also “reflects recent and projected factory performance as well as higher than anticipated complexity of the production build,” according to the financial report.
Along with the recent loss, Boeing confirmed that risk for additional future losses remains.
Earlier this year, Senate appropriators proposed a major cut to the Stingray program -- over $450 million slashed from the Navy’s fiscal year 2025 budget request, bringing funding to $50 million. This follows critical obsolescence redesign efforts and a subsequent reprogramming request for the MQ-25 program, which will be used as an aerial refueler off aircraft carriers, as well as a gatherer of intelligence, surveillance and reconnaissance.
In its financial report Wednesday, Boeing stated that initial units are expected to complete production in 2025 and commence flight testing soon thereafter. Final assembly operations will be initiated at the company’s new facility at Mid-America St. Louis Airport in Mascoutah, IL in early 2025, the report adds.
“The thing that I think is so important is that we’re not admiring these risks but we’re acting on them,” Boeing CEO Kelly Ortberg said in Wednesday’s company earnings call. “So, we've been carrying risks in these programs, and I don't think we've been doing enough work with our customers to figure out how to de-risk these things” before original agreements are surpassed by rising costs.