“Ending C-17 production was a very difficult but necessary decision,” said Dennis Muilenburg, president and chief executive officer of Boeing Defense, Space & Security. “We want to thank the highly skilled and talented employees who have built this great airlifter for more than two decades– and those who will help us as we continue to build the remaining 22 aircraft and support and modernize the global fleet for decades to come. The C-17 remains the world’s most capable airlifter with unmatched readiness and cost-effectiveness.”
Boeing will continue after-delivery support of the worldwide C-17 fleet as part of the C-17 Globemaster III Integrated Sustainment Program (GISP) Performance-Based Logistics agreement. The GISP “virtual fleet” arrangement provides the highest airlift mission-capable rate at one of the lowest costs per flying hour, according to Boeing.
“Our customers around the world face very tough budget environments,” Muilenburg said. “While the desire for the C-17’s capabilities is high, budgets cannot support additional purchases in the timing required to keep the production line open. What’s more, here in the United States the sequestration situation has created significant planning difficulties for our customers and the entire aerospace industry. Such uncertainty forces difficult decisions like this C-17 line closure. We will continue to make tough but necessary decisions to drive affordability and preserve our ability to invest for the future.”
Boeing expects a charge of less than $100 million, which will be recorded this quarter, as a result of this announcement. The charge will not impact financial guidance for the year, according to Boeing.
Nearly 3,000 employees support the C-17 production program in Long Beach; Macon, Ga.; Mesa, Ariz. and St. Louis. Workforce reductions will begin in early 2014 and continue through closure. Boeing will provide employee assistance including job-search resources, financial counseling, retirement seminars and help locating potential jobs within and outside of the company, the company stated in its press release.
“We recognize how closing the C-17 line will affect the lives of the men and women who work here, and we will do everything possible to assist our employees, their families and our community,” said Nan Bouchard, vice president and C-17 program manager.
Additionally, the C-17 industrial team includes more than 650 suppliers in 44 states. Boeing and its suppliers provide 20,000 jobs in support of C-17 production.
Since the first flight on Sept. 15, 1991, the C-17 has amassed more than 2.6 million flying hours supporting airlift of troops and large cargo, precision airdrop of humanitarian supplies and lifesaving aeromedical missions. Boeing has delivered 257 C-17s, including 223 to the U.S. Air Force, and a total of 34 to Australia, Canada, India, Qatar, the United Arab Emirates, the United Kingdom and the 12-member Strategic Airlift Capability initiative of NATO and Partnership for Peace nations.
Fifth District Councilmember Gerrie Schipske, whose district includes the Boeing facilities, called the decision “the end of an era” that began in the 1940s. “The production of excellent aircraft for military and commercial use has provided thousands of well paying jobs for Long Beach residents and has been the heart of skilled trades jobs in our community,” Schipske said. “I hope that Boeing will provide retraining for their employees for comparable paying jobs in our city.”
She said that Long Beach Mayor Bob Foster and the City Council had “done everything possible” to convince the U.S. Air Force to continue to purchase the C-17 aircraft, but to no avail. However, she found a few potentially positive results from the cessation of the program.
“This is an opportunity for other companies in the area to take very experienced, well-trained Long Beach workers and put them to work in tech and growth industry jobs,” Schipske said. “It’s important to be able to provide new opportunities for these workers while the city of Long Beach has an 11.9-percent unemployment rate as of August and a 22-percent poverty rate.”
The councilmember also indicated that the C-17 site will most likely be added to the Douglas Park development planned by the developer Sares-Regis Group, which, Schipske said, is doing “incredibly well.”
She also said she hopes the company will contribute to the city’s historical preservation. “I’m hopeful that Boeing will give the City of Long Beach the historical archives from the early days of McDonnell Douglas manufacturing on the site to the present,” Schipske said. “It would be a great gift from Boeing to ensure that important history of our city’s role in producing aircraft for our nation and ultimately for the world.”
In an email issued by Mayor Foster, he said that, while not unexpected, the announcement closes the chapter on production of a remarkable aircraft. “As work slowed over the last several years, we worked side by side with Boeing to extend the C-17 line for seven additional years,” Foster said. “There’s a sense of sadness to see the end of an institution, but Boeing has grown its commercial aircraft work and announced an engineering design center over the past few years that solidifies the company’s commitment in Long Beach.”
Sources: Boeing, Foster’s office, Schipske’s office