News Column

Boeing Near Decision on Fate of C-17

August 15, 2013
Boeing C-17 cargo jets
Boeing C-17 cargo jets in a training exercise (photo: Dept. of Defense)

Production of Boeing Co.'s C-17 military cargo plane has been winding down for years. Now the company could know by the end of the year if it's winding down for good.

Boeing's chief financial officer said Wednesday that the planemaker is nearing a choice on whether to slow, or even stop, manufacturing on the mammoth four-engine jet, which employs hundreds of people in St. Louis.

"We'll have to make a decision sometime later this year," Boeing CFO Greg Smith said at an investors conference in New York, according to a Bloomberg transcript of the event.

McDonnell Douglas and later Boeing have been building the C-17 since the late 1980s, and Boeing is scheduled to deliver its final plane to the U.S Air Force next month. The company also has prolonged C-17 manufacturing by finding international customers, and it has contracts to deliver 10 more, mostly to India, through the third quarter of next year. But, for now at least, that's the end of the line.

The U.S. Air Force has made the plane the backbone of its troop transport fleet and used it extensively for humanitarian missions. But with more than 200 on hand and two wars winding down, the Pentagon has said repeatedly that it needs no new ones.

International customers from Australia to the United Kingdom to Qatar have bought a handful each, and Smith signaled Wednesday that more small international orders could lay ahead.

"We're diligently engaged with a number of interested parties," he said. "We've got an active pipeline. It'll be a question of how much of those we can firm up and firm them up within the timeframe that we need to meet our production needs."

Boeing has a lot riding on those deals.

It takes nearly three years, start to finish, to make all the parts that go in to the 174-foot-long plane. To keep its long-lead suppliers up and running, Boeing has spent $620 million on parts for planes which it doesn't yet have under contract, according to a regulatory filing in July.

Even if those orders do materialize, though, the current pace of 10 C-17s a year may not hold up. In early 2011, Boeing slowed annual C-17 production from 15 a year to 10, to match the rate needed by India. That slowdown prompted about 1,000 layoffs, most at the final assembly plant in Long Beach, Calif., but about 100 here in St. Louis, where the plane's nose, cargo door and other large components are constructed.

Boeing would not say how many people today work on the C-17 in St. Louis, and messages left with union officials here were not returned late Wednesday. But in 2009, the program supported about 900 Boeing jobs in St. Louis, and a company spokeswoman said there had been no big layoffs other than the one in 2011. A number of smaller aerospace suppliers in the region also make parts for the C-17.


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Source: Copyright St. Louis Post-Dispatch (MO) 2013

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