Boeing Co. will start the process of ending its C-17 cargo plane program as early as tomorrow after failing to secure orders from the Pentagon, and unwilling to extend financial guarantees to its suppliers, The Wall Street Journal reported Thursday.
Boeing has enough orders to continue manufacturing the C-17 through 2008, but needs commitments by Friday or will tell its suppliers to halt production, as many parts need to be ordered months in advance.
The C-17 program is one of Boeing's largest, on which the Pentagon spends about $3 billion annually for the transport plane, the Journal reported.
The Journal said Boeing could yet win a last-minute order, and Congress and the Pentagon could devote spending for orders in the future. However, a break in production will drive the cost of the plane higher than the government's current price of about $200 million each.
Meanwhile, people familiar with the program said Boeing has committed at least $90 million to its suppliers since last year to keep the parts moving. Barring a late deal, Boeing is expected to tell its C-17 suppliers to stop work on parts for planes for which there are no firm commitments, the Journal reported.
More than 5,000 people work on the jet program at Boeing's Long Beach, Calif., factory, and the company said about 25,000 workers total are linked to the program, including subcontractors.