Boeing’s C-17 production to end in 2015

Boeing’s closure of the C-17 aircraft programme will impact around 20,000 jobs across the United States

Boeing Co has decided to ground the 20-year legacy of its prestigious C-17 aircraft programme, impacting around 20,000 jobs across the United States. Workforce reductions will begin in early 2014 and continue through the closure, the company said.

Suresh Pattali in Seattle

Announcing the decision here during a conference call from Long Beach in California, Dennis Muilenburg, president and chief executive officer of Boeing Defence, Space & Security, told a group of Middle East journalists that the economic condition across the globe and the sequestration situation in the US had forced the company to bring the curtain down on the large military transport aircraft that has amassed more than 2.6 million flying hours since its maiden flight on September 15, 1991.

Boeing will complete production of the C-17 Globemaster III and close the C-17 final assembly facility in Long Beach, California, in 2015. But production will continue at 10 C-17s per year for 22 additional new aircraft, the company said.

“Ending the C-17 production was a very difficult but necessary decision,” said Muilenburg.

“Our customers around the world face very tough budget environments. 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,” he added.

The sequestration situation in the US has also created significant planning difficulties for Boeing customers and the entire aerospace industry, Muilenburg said. “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,” he added.

Asked by Khaleej Times how many jobs would be made redundant by the plant closure, Muilenburg said 20,000 jobs, including nearly 3,000 employees supporting the C-17 production programme in Long Beach, Macon in Georgia, Mesa in Arizona, and St. Louis in Missouri would be affected by the closure.

The C-17 industrial team includes more than 650 suppliers in America’s 44 states. Boeing and its suppliers provide 20,000 jobs in support of the C-17 production.

Boeing said it would provide employee assistance, including job search resources, financial counselling, retirement seminars, and help in locating potential jobs within and outside of the company.

“We recognise 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 programme manager for C-17.

“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 modernise Boeing’s global fleet for decades to come,” Muilenburg said.

Boeing said it would continue after-delivery support of the worldwide C-17 fleet as part of its Integrated Sustainment Programme (GISP) Performance-Based Logistics agreement.

The C-17 remains the world’s most capable airlifter with unmatched readiness and cost effectiveness. The aircraft earned its name for 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 US Air Force, 34 to Australia, Canada, India, Qatar, the UAE, the UK and the 12-member Strategic Airlift Capability initiative of Nato and Partnership for Peace nations.

Asked if Boeing had another programme on mind to replace the C-17, Muilenburg replied in the negative. “There is no replacement programme whatsoever,” he added.

He, however, said Boeing would continue its partnership with Embraer to market its KC-390, a medium sized airlifter that the Brazilian defence firm has developed.

The KC-390 is a multi-mission mobility and aerial refuelling aircraft that is comparable with the C-27J, which is a programme the US Air Force has ended because of budget cuts.

Muilenburg said of the last 22 C-17 aircraft to be produced, 13 had not been allocated. While nine were an Indian Air Force order, two were for unnamed customers.

Asked if Boeing would reconsider the closure in the event of an extraordinary C-17 order, Muilenburg said the decision was final. “If at all there is an order, the unallocated ones will take care of it,” he said.

Boeing said it expected a charge of less than $100 million, which would be recorded this quarter, as a result of the closure. The charge would not impact financial guidance for the year, it added.

• Aviation