Boeing to shut down C-17 production
- From: "Leadfoot" <notspam@xxxxxxxxxx>
- Date: Fri, 18 Aug 2006 09:15:21 -0700
http://news.yahoo.com/s/ap/20060818/ap_on_bi_ge/boeing_cargo_plane
By GARY GENTILE, AP Business Writer
Boeing Co. said Friday it will begin shutting down production of its C-17
cargo plane, the last to be built in Southern California, because Congress
has not funded new purchases.
The decision could affect thousands of Boeing workers in four states and
thousands of others employed by companies that supply parts for the C-17.
The Chicago-based company said it has told its suppliers and subcontractors
to stop work on planes beyond those already on order. Boeing said it has
enough orders to continue production through the middle of 2009.
The company has spent millions to keep its supply line active, in hopes
Congress would authorize new purchases. But Friday, Boeing said it could no
longer afford to keep the program going.
"The C-17 is one of the Defense Department's most successful acquisition
programs ever," said Ron Marcotte, vice president and general manager of
Boeing Global Mobility Systems. "But we can't continue carrying the program
without additional orders from the U.S. Government."
The decision affects long lead-time items purchased from suppliers, many of
which have to be ordered as long as 34 months in advance.
The company left open the possibility that it could continue production if
it receives new orders.
"This move will be the first step in an orderly shutdown of the production
supply chain, should no further orders be received from the U.S.
government," Boeing said in a press release.
The move could ultimately affect 5,500 Boeing employees in California,
Missouri, Georgia and Arizona who are directly tied to the C-17 program.
Thousands more work to support existing planes. Boeing this week signed a
contract to provide support and spare parts for the Royal Australian Air
Force's C-17 fleet.
But the decision will first hit the 25,000 employees of the nearly 700
companies in 42 states that supply parts and systems for the plane, Boeing
said.
The giant cargo plane, nicknamed the Globemaster III, has been used since
1991 to airlift heavy equipment and transport troops. Supporters say its
ability to land on short dirt runways has helped take the load off supply
trucks that come under heavy fire in Iraq and Afghanistan.
Production could be restarted if Congress approves funding, which could
happen as early as next month. But restarting the supply chain would be
costly and add millions of dollars to the cost of each plane - about $154
million each.
The C-17 plant is the last major airplane factory left in Southern
California, which once was a center for aircraft production. Earlier this
year, Boeing delivered its last 717 passenger jet, also built in Long Beach.
.
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