Boeing announces end of C-17 cargo plane production
One day after California Gov. Arnold Schwarzenegger personally asked the Bush administration for additional federal support of the C-17 Globemaster III aircraft program in Southern California, Chicago-based Boeing announced a firm decision to end production of the plane in 2009.
Citing a lack of further federal and international C-17 orders for the plant closure, Boeing also said Friday that it immediately plans to stop procuring parts for the jet and start issuing layoff notices to the 5,700-plus workforce at the Long Beach plant next year.
Boeing has previously stated that because of the 34-month lead-time in obtaining parts from suppliers, a decision on the closure had to be made now.
'We had hoped to keep the production line active and viable to protect this important national asset affordably while the U.S. government completed its decision process,' said a statement issued Friday from Boeing's Dave Bowman, vice president and C-17 program manager.
The Bush administration's fiscal year 2008 budget request and the fiscal year 2007 Emergency Supplemental request did not include monies for additional C-17 production, despite the Air Force incorporating the C-17 into its unfunded request list. The Pentagon has remained somewhat unclear about the official position on the plane. The Air Force has called the C-17 a critical component of their supply and deployment strategy, but allocations for more of the $220 million planes have not been forthcoming.
Boeing said Friday that it has notified 700 suppliers, which employ more than 7,000 workers in 42 states including California, Missouri, Georgia and Arizona, of the shutdown. Nearly 350 company suppliers in California, employing up to 6,000 skilled workers, face an impact of some kind due to the closure. Boeing estimates that there are roughly 25,000 U.S. jobs tied to the C-17 production. The governor's office stated Thursday that C-17 production impacts the national economy to the tune of $8.4 billion a year with nearly $4 billion of the impact within California.
“The impact of discontinuing production would be disastrous in California and across the nation,” said the governor in his letter Thursday to the Armed Services Committee and Committee on Appropriations in the Congress. Schwarzenegger has made numerous pleas to the Pentagon and the Bush administration to prevent ending production of the plane.
'Given the impacts,' Schwarzenegger said, 'it is clear that accepting the administration's budget request to shut down the C-17 would be a grave mistake and would contradict the Congress’ strong bipartisan support for the program.'
The C-17 is one of Boeing’s most visible projects, bringing in about $3 billion in annual revenue. The company has delivered 167 C-17s out of 209 orders, including those for the United Kingdom, Australia and Canada. Production and delivery will continue on the remaining 22 aircraft under order. Unless further orders are placed, the last plane will roll off the former McDonnell-Douglas assembly line in Long Beach in October 2009. The plane is the last major aircraft still under construction in Southern California, once a world center of aerospace production.
