Boeing Co. announced Friday that it will stop procuring parts for any new C-17 military cargo aircrafts that are not under contract or firmly committed by the U.S. government or international entities.
Due to the lack of further aircraft orders, Boeing said they will begin a major workforce reduction in early 2008, with plans to completely close the production line by mid-2009.
The announcement will affect over 7,000 Boeing employees in California, Missouri, Georgia, and Arizona, directly involved in the C-17 program, and the program's nationwide supplier workforce of more than 25,000 people. Approximately 700 companies in 42 states provide parts and services for the C-17.
According to Dave Bowman, vice president and C-17 program manager, Boeing had hoped to keep the production line operating while the federal government decided on the future of the C-17 program, particularly due to recent concerns over the aging C-5A fleet.
Currently, Boeing is on contract for 190 U.S. Air Force C-17s, and independent analysis indicates a requirement for at least 222 of these aircraft. Based on the 34-month lead time necessary to build a C-17, Boeing needed a commitment now to avoid a stoppage in production.
In 2006, Boeing accepted significant risk and used company resources to fund the supply base and production line for 22 aircraft until mid-August.
At that time, there was substantial international customer interest and the Air Force had designated additional C-17s as the number one priority on its FY2007 Unfunded Priorities List (UPL).
But this year, the Defense department did not request funding for new C-17s in the FY2008 defense budget, new international interest is much less than it was a year ago and the Air Force has put only two C-17s on its FY2008 UPL.