America's Reliance on Boeing Is a National Security Liability
With over 3,200 workers off the job, the military’s reliance on one politically connected contractor threatens innovation, accountability, and national security.
On August 4, over 3,200 Boeing workers walked off the job at three key plants in Missouri and Illinois, bringing production of military aircraft like the F‑15 Eagle and F/A‑18 Hornet to a halt.
This followed after members of the International Association of Machinists and Aerospace Workers overwhelmingly rejected Boeing's modified four-year contract. The strike could delay progress on the new F‑47 fighter jet, underscoring the fragility of national defense supply chains.
The timing is critical. Boeing recently secured a $20 billion contract to build the F-47, and production setbacks could ripple through national defense programs, pressuring both Boeing and the federal government to resolve the dispute quickly.
"It seems unlikely to me that the president would simply be quiet in the face of a labor dispute like this," observed Michael Duff, co-director of the Wefel Center for Employment Law at St. Louis University School of Law. "I think the president would exert as much pressure as it's currently thought he could, and then maybe try to exert more pressure than that." The potential for White House action demonstrates how national security rationale is increasingly normalizing government intervention in private industry disputes.
In FY 2023, Boeing Defense, Space, and Security ranked as the fourth-largest Department of Defense contractor, raking in $20.1 billion. As one of the government's primary suppliers, Boeing's disruptions ripple far beyond its factories, creating uncertainty for the Defense Department on vehicle deliveries, contract deadlines, and future military aircraft development. It also raises serious questions about the risks of concentrating national security infrastructure in the hands of a few powerful players.
Boeing's dominance is not just a product of its manufacturing capabilities but largely a result of its political sway. In FY 2023, Boeing spent $14.4 million on federal lobbying, securing lucrative contracts and shaping regulations to its advantage. Time and again, the company has landed multibillion-dollar deals, not necessarily by out-innovating competitors, but through its government ties. For firms like Boeing, the goal is not to deliver the best product at the best price but to maintain their position within the military-industrial complex.
This sets a troubling precedent. As the Mercatus Center's Christopher Coyne, Courtney Michaluk, and Rachel Reese noted in a 2015 working paper, "the military sector is characterized by an entangled network of government bureaus and private firms whose existence is dependent on continued government spending." This dependency fosters inefficiency and waste, as incentives shift from innovation to survival through government backing.
The consequences of this dynamic extend beyond inefficiency. Economist Robert Higgs' "ratchet effect" theory describes how governments use crises as pretexts to expand their power and how it rarely scales back once the crisis subsides. In Boeing's case, the strike could prompt the government to intervene, either by providing additional funding or pressuring negotiations, further entrenching the cycle of dependency. Each disruption becomes an excuse for less accountability and more intervention.
Boeing's failure to retain mechanics points to the risks in our defense supply chains. The company has delayed production of the new Air Force One by years, raising costs well beyond the $3.9 billion contract President Donald Trump signed in 2018. The project was expected to be completed by 2024. However, the delivery date is now projected for 2029 and will be a minimum of $2 billion over budget. The Pentagon attributes the delay to "ongoing design issues, modification rework, and workforce challenges." In response, Trump procured a $400 million Qatari Boeing 747 as a potential substitute. Ironically, retrofitting it to Air Force One standards could cost taxpayers another $1 billion, despite Trump stating it was a "GIFT, FREE OF CHARGE" on Truth Social.
Looking into Boeing's balance sheet reveals just how much risk the government is taking on with these contracts. A 2024 Congressional Research Service report warned, "analysts have speculated that Boeing could declare bankruptcy, which could negatively affect the company's performance on existing DOD contracts." This is yet another example of the government propping up underperforming private firms in a bid to direct industrial policy, ultimately costing the American taxpayer. As history shows, crises justify intervention, but never reform. Without course correction, Boeing's failures today will become tomorrow's justification for even deeper government entanglement.
To address America's overreliance on Boeing, the government must focus on two essential steps: diversifying defense partnerships and enforcing stricter accountability. Creating real competition among domestic firms and collaborating more openly with trusted international companies will fortify resilience and drive innovation throughout our defense supply chain. Take Airbus, for example: its collaboration with Parry Labs for the Marine Corps on the MQ-72C Logistics Connector, an unmanned aircraft that cuts risks and costs, is just one out of many contributions the company is making across sea, air, land, space, and cyberspace. Yet, since Airbus U.S. Space & Defense was founded in 2001, it has received just $6.5 billion, while Boeing pulled in over three times that sum from the DOD in 2023 alone. The message is clear: widening the supplier base with trusted international partners isn't just smart policy; it's vital to reducing vulnerabilities and jump-starting faster, better innovation in our defense sector.
Just as important is holding contractors to higher standards with tougher accountability measures. By introducing performance-based penalties for delays and cost overruns—tools already available in federal employment law—we can ensure obligations are met and taxpayer dollars aren't wasted. Clear consequences for underperformance lead to better outcomes in government contracts. Together, these changes will not only safeguard national security but also create a more dynamic, competitive, and resilient military-industrial sector.
