- The Washington Times - Friday, August 18, 2006

LOS ANGELES (AP) — The Boeing Co. said yesterday it would start shutting down production of its cavernous C-17 military cargo plane, marking the probable end of aircraft manufacturing in a region that once dominated the industry.

Unless Congress authorizes new orders, the decision could trigger a ripple of job cuts nationwide, including more than 7,000 Boeing employees and an additional 25,000 workers in 42 states that provide parts for planes still moving everything from tanks to troops around Iraq and Afghanistan.

Layoffs probably would not be immediate — Boeing has several dozen pending orders, enough to keep production into 2009. But the Chicago company said yesterday it would no longer spend tens of millions of its own dollars making planes that may never be sold just to keep the supply lines open in hopes of new business.

“We can’t continue carrying the program without additional orders from the U.S. government,” said Ron Marcotte, vice president and general manager of Boeing Global Mobility Systems.

Nicknamed the Globemaster III since it first flew in 1991, the C-17 has been valued for its ability to land on short dirt runways such as those overseas or during disaster relief. The flying warehouses played a major role airlifting supplies into areas devastated by last year’s Gulf Coast hurricanes.

Congressional leaders have been lobbying to extend C-17 production and added money for three more of the aircraft in the 2007 defense spending bill, which has not passed the Senate. Boeing said it could keep the program if Congress funds at least 10 more planes, though a delay would increase costs above the current price tag of about $200 million each.

“We haven’t given up,” Mr. Marcotte said.

There is some political will to salvage production.

The Long Beach plant is the last major airplane factory left in Southern California — earlier this year, Boeing delivered its last 717 passenger jet from a sprawling complex of buildings that have been churning out planes since the 1930s. Workers have assembled 15 of the planes each year in a hangar big enough to fit several C-17s at once.

Though far from past levels, aircraft production still provides thousands of high-paying jobs.

“This is the last Californian aircraft on a line that will be dying in an election year,” said Richard Aboulafia, an aerospace analyst at the Teal Group, an aviation consulting firm in Fairfax. “I can’t imagine Congress won’t come through.”

The Air Force isn’t counting on it.

Though the Air Force has put seven more C-17s on its list of unfunded priorities, a Department of Defense study recently concluded that the 180 C-17s already produced or ordered meet military transport needs.

“It is unfortunate that the Air Force and the administration have not been clear with regard to their future plans for additional C-17 production,” Sen. Dianne Feinstein, California Democrat, said yesterday. “They have, instead, sent mixed messages, happy to let the Congress do what is necessary to buy more aircraft, but unwilling to make the difficult budget decisions to ensure that production continues.”

Boeing said it has buyers for 18 of the 22 planes it has funded for production, among them NATO and the Australian Air Force.

The company yesterday told suppliers to stop work on the remaining four. That decision affects long lead-time items purchased from suppliers, many of which have to be ordered as long as 34 months in advance.

If more planes aren’t ordered, Boeing said first to lose jobs would be 1,000 workers in St. Louis, 600 in Macon, Ga., and 200 in Mesa, Ariz. The company could not say when those cuts would begin.

Senate supporters may try to add funding for more planes when the 2007 defense spending bill is on the Senate floor in September and hope for additional funding in the 2008 budget cycle.

“Mothballing the C-17 line is a waste of taxpayer dollars and is not in the best interest of our nation’s security,” Sen. Barbara Boxer, California Democrat, said yesterday.

Boeing’s shares fell 97 cents, or 1.2 percent, to close at $77.62 on the New York Stock Exchange.

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