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Press-Telegram - Boeing takes a gamble on the C-17
Boeing takes a gamble on the C-17
Local: Company will pay to keep the line open through 2010, in the hope Congress will fund more planes.
By Don Jergler, Staff writer
Article Launched: 06/20/2007 09:37:21 PM PDT
Boeing is investing its own money to keep the C-17 production line running while Congress decides whether to purchase more of the aircraft.
(Press-Telegram)LONG BEACH - Boeing Co. will front its own money to keep the C-17 assembly line in Long Beach open through at least 2010, company executives said.
The company told workers on Tuesday that it is committing Boeing resources to build 10 new C-17s. An order of 10 more planes would keep the line from shutting down, allowing the possibility of an even larger order to come through later.
Boeing had announced in March that it was taking steps to close down the line.
The move comes after C-17 funding was given a low priority on the Air Force wish list that goes to Congress and the President, who didn't include funding for the craft in his version of the budget.
However, Boeing officials said they have received recent hints from the Air Force and Congress that funding for more C-17s could be forthcoming.
A letter from Dave Bowman, Boeing vice president and C-17 program manager, announced the news to federal, state and local officials who had banded together to lobby for more C-17s.
"Because of your hard work, we have continued bipartisan Congressional support, and increasing signs that the U.S. Air Force is interested in 30 additional C-17s," Bowman wrote.
Boeing has directed key suppliers
to begin work on new aircraft beyond the 190 currently on order, he wrote.
The company has delivered 166 of the 190 planes on order. The final craft was scheduled to be delivered in mid-2009 and the assembly line was due to be shut down at that point.
Boeing officials say the 30 added planes, if approved by Congress, would extend work on the line through at least 2010.
Boeing officials won't know how far into 2010 the line could stay open until funding is identified.
"It buys time while Congress completes its decision-making process," said C-17 spokesman Garry Lesser.
It costs about $200 million to build a C-17. From the time of a contract issuance to the delivery of a craft takes about 34 months. It takes about nine months to assemble a C-17 once the craft's components are delivered.
City officials who lobbied for the C-17 expressed some hope about the news.
"We're guardedly optimistic," said Robert Swayze, the city's economic development director. "It's a great signal from Boeing that they believe there's hope that at least 10 planes will be identified in Congressional funding."
The House Armed Services Committee has authorized funding for more C-17s, but the Senate Armed Services Committee has yet to approve that authorization.
"The fact that Boeing turned the line back on, Boeing's giving the signal to the Air Force that they're committed to the plane, and I'm sure their hope is that the Air Force will give the signal back to Congress that they want those 10 planes," Swayze said.
Boeing employs 5,500 workers on the C-17 line, and another 5,300 employees through suppliers in the state. It's estimated the program indirectly generates another 10,000 jobs statewide.
"We estimate the total annual payroll for employees working on the C-17 to be over $1 billion a year," Swayze said.
Should no C-17 funding be found in the federal budget, the company would not only close the line, but it would be forced to pay certain suppliers who are keeping their shops open because of this week's decision.
"Turning the supply chain back on is a financial risk to Boeing," Bowman wrote. "But this decision reflects the company's long-standing willingness to ensure the viability of the C-17 supply base and to minimize cost - if and when the Air Force decides to buy additional C-17s."
Boeing takes a gamble on the C-17
Local: Company will pay to keep the line open through 2010, in the hope Congress will fund more planes.
By Don Jergler, Staff writer
Article Launched: 06/20/2007 09:37:21 PM PDT
Boeing is investing its own money to keep the C-17 production line running while Congress decides whether to purchase more of the aircraft.
(Press-Telegram)LONG BEACH - Boeing Co. will front its own money to keep the C-17 assembly line in Long Beach open through at least 2010, company executives said.
The company told workers on Tuesday that it is committing Boeing resources to build 10 new C-17s. An order of 10 more planes would keep the line from shutting down, allowing the possibility of an even larger order to come through later.
Boeing had announced in March that it was taking steps to close down the line.
The move comes after C-17 funding was given a low priority on the Air Force wish list that goes to Congress and the President, who didn't include funding for the craft in his version of the budget.
However, Boeing officials said they have received recent hints from the Air Force and Congress that funding for more C-17s could be forthcoming.
A letter from Dave Bowman, Boeing vice president and C-17 program manager, announced the news to federal, state and local officials who had banded together to lobby for more C-17s.
"Because of your hard work, we have continued bipartisan Congressional support, and increasing signs that the U.S. Air Force is interested in 30 additional C-17s," Bowman wrote.
Boeing has directed key suppliers
to begin work on new aircraft beyond the 190 currently on order, he wrote.
The company has delivered 166 of the 190 planes on order. The final craft was scheduled to be delivered in mid-2009 and the assembly line was due to be shut down at that point.
Boeing officials say the 30 added planes, if approved by Congress, would extend work on the line through at least 2010.
Boeing officials won't know how far into 2010 the line could stay open until funding is identified.
"It buys time while Congress completes its decision-making process," said C-17 spokesman Garry Lesser.
It costs about $200 million to build a C-17. From the time of a contract issuance to the delivery of a craft takes about 34 months. It takes about nine months to assemble a C-17 once the craft's components are delivered.
City officials who lobbied for the C-17 expressed some hope about the news.
"We're guardedly optimistic," said Robert Swayze, the city's economic development director. "It's a great signal from Boeing that they believe there's hope that at least 10 planes will be identified in Congressional funding."
The House Armed Services Committee has authorized funding for more C-17s, but the Senate Armed Services Committee has yet to approve that authorization.
"The fact that Boeing turned the line back on, Boeing's giving the signal to the Air Force that they're committed to the plane, and I'm sure their hope is that the Air Force will give the signal back to Congress that they want those 10 planes," Swayze said.
Boeing employs 5,500 workers on the C-17 line, and another 5,300 employees through suppliers in the state. It's estimated the program indirectly generates another 10,000 jobs statewide.
"We estimate the total annual payroll for employees working on the C-17 to be over $1 billion a year," Swayze said.
Should no C-17 funding be found in the federal budget, the company would not only close the line, but it would be forced to pay certain suppliers who are keeping their shops open because of this week's decision.
"Turning the supply chain back on is a financial risk to Boeing," Bowman wrote. "But this decision reflects the company's long-standing willingness to ensure the viability of the C-17 supply base and to minimize cost - if and when the Air Force decides to buy additional C-17s."
