The release of next week's Pentagon budget request to Congress will set the stage for one of the first of several key decisions for Boeing's defense sector, which recently came under new leadership.

Ever since Lockheed Martin snatched the $398 billion winner-take-all F-35 program in 2001, it has been no secret that Boeing's fighter business as it is known today—anchored by the twin-engine F-15 and F/A-18E/F manufactured in St. Louis—would come to an end. The questions have been when it will end and to what extent a newly defined Boeing Defense, Space and Security will emerge.

If the U.S. Navy opts not to purchase more Super Hornets or EA-18G Growlers, new CEO Chris Chadwick will have to decide just how long the company will carry the production line to finalize orders with potential international customers, such as Canada and Denmark. Self-funding the line is a gamble, however. And waiting for more buyers depends in part on whether Lockheed Martin blunders again in developing the F-35, which could drive customers such as Australia to a legacy fighter.

Dennis Muilenburg, Chadwick's predecessor and heir-apparent to company CEO Jim McNerney, made the difficult decision to close the decades-old C-17 production line in Long Beach, Calif., last September. With the fate of Boeing's airlifter business sealed until a new program is crafted, the question now is what becomes of its tactical fighter business. Since paralysis is now standard for the annual budget drill in Washington, and defense spending reductions have forced the Pentagon to delay new programs—such as a T-38 replacement, new bomber and unmanned aircraft for carrier use—there is no clear near-term successor for the tactical aircraft base. “We want to stay in that business,” says Chris Raymond, vice president of business development and strategy for the defense unit.

Until the passage of the 2014 budget last month, the last of Boeing's F/A-18 orders was slated for rollout in 2016. The 2014 budget added another 22 ship sets, buying roughly a year for the line.

Production is now at four per month, with a plan to drop to three per month early next year, says Mike Gibbons, vice president for the Super Hornet and Growler programs. The company may decide later this year to drop to two per month, he says, depending on potential orders from the Navy or others.

Boeing and its suppliers have “put some money out there” to protect the supply chain for forgings used in the aircraft's center and aft fuselage bulkheads, arresting hook and main and nose landing gear, Raymond says. Those are the parts that must be ordered first. Suppliers “will look at their schedule and share that risk with you to a point,” Raymond says.

Even if production is slashed by half, to 24 annually, the company will “be able to maintain a price close to what we offer today,” says Karen Fincutter, a Boeing spokeswoman. This is partly due to lessons from the long C-17 production drawdown, which was also achieved while stabilizing price.

Although it is in a slightly less dire situation, the F-15 is not far behind, with orders until 2018. “While the F-15 has more time to secure additional orders, it's critical to include Super Hornets or Growlers in the fiscal 2015 budget,” Fincutter says.

However, the loss of South Korea as an F-15 customer to the F-35 was a blow for Boeing's tactical fighter plans. The decision effectively killed the so-called Silent Eagle development project focused on reducing the radar cross section of the F-15 through strategically placed stealth coatings and the use of conformal weapons bays.

The Silent Eagle included a package of other upgrades, such as an improved electronic warfare suite, fly-by-wire and an active, electronically scanned array radar. But, much like the so-called Advanced Super Hornet upgrade options (conformal fuel tanks and an updated cockpit), this type of work will not make up for the loss of a manufacturing line. The St. Louis site employs about 15,000 people.

Boeing is teamed with Lockheed Martin against Northrop Grumman for the forthcoming competition for a next-generation, stealthy bomber, which is likely to take place in the black world. So a win would probably mean a split in work share between the two companies. On the T-38 replacement program, dubbed the T-X, Boeing is the only bidder planning to build a design from the ground up; its competitors plan to modify existing designs. Boeing is teamed with Saab on the T-X effort.

Meanwhile, line closure activities are underway in Long Beach. Boeing has sounded alarms about the facility's demise quarterly, rounding up the last orders from foreign customers until announcing the closure.

The last C-17, which does not yet have a customer, will roll off the line at the end of next year, says Fincutter. Orders for India and Kuwait are being assembled; another 13 on the line will be white tails for which Boeing must find a customer. Progress selling these unclaimed airlifters will determine whether Boeing found the sweet spot in shuttering the C-17 line or was overly ambitious.

With this decision, Boeing is closing the only large airlifter line left in the U.S. The impact to Boeing and the country's large aircraft manufacturing capacity is not insignificant, but the question about Boeing's future as a tactical fighter manufacturer is perhaps a more existential one. Even without the C-17, it will continue to build large aircraft, and its booming commercial airplanes business will offset some of the loss.

Boeing's defense unit is also a major player in missile defense (with the Ground-Based Midcourse Defense program), military space (with 10 Wideband Global satellites on order) and rotorcraft (with Apache and Chinook helicopters solid at least until the mid-2020s). These sectors are more stable at the moment.

A funding decision for the F/A-18 line is expected by year end, company officials say.