Boeing might End C-17

[+Fates 63]

Boeing said on Friday it would end production of its C-17 military cargo plane in mid-2009 if it did not receive any further orders from the US armed forces.

 

Boeing said in a widely expected announcement that it told suppliers to stop work on four planes for which there is no firm funding, which it said was the first step in the long process of shutting down its supply chain.

 

Boeing, which has been lobbying the US Congress to continue production of the plane, said the last C-17 would roll off its Long Beach, California production line in mid-2009 unless it won new Department of Defense orders.

 

The Chicago-based company said shutting the production line could ultimately cost 5,500 Boeing jobs in California, Missouri, Georgia, and Arizona.

 

The aircraft, with a list price of about $US200 million ($A263.21 million), is designed to carry large equipment and troops to hard-to-reach airfields. It has been in service since the 1990s.

 

It is one of Boeing's most significant projects, bringing in about $US3 billion in annual revenue. Boeing's defence unit is on track to post about $US30 billion in revenue this year.

 

The company said it is evaluating the financial impact of closing production and may incur costs which are not recoverable from the US government.

 

Its stock fell $US1.07 to $US77.52 on the New York Stock Exchange.

 

Executives said a letter was sent to all 700 supplier companies on the aircraft, directing them to stop work on planes that lack funding.

 

Boeing said it made the decision to begin winding down its supply chain now because some components on the aircraft must be ordered 34 months before assembly of the plane.

 

"No one questions its (the C-17's) operational value," said Ron Marcotte, general manager of Boeing's Global Mobility Systems unit, in a statement. "But we can't continue carrying the program without additional orders from the US

 

government."

 

Boeing has orders on its books to build 44 more of the aircraft. Twenty-six are being built for the US Air Force, rounding off its order for 180 of the planes.

 

A further 18 are to be built mostly for international customers, including Australia, Canada, Britain and NATO.

[BUFF 8]

That would be a shame particularly - as I suspect that there may be a requirement for a good few more a couple of years further down the line from the likes of the UK, Australia etc.

I didn't know that Canada had actually ordered the C-17 (I know that they have expressed intent but Canada's defence procurement almost makes Britain's look good).

[SayethWhaaaa 245]

Yeah, the RAAF wasn't too keen on the acquisition either because they're quite happy with the C-130J-30 for most of its transportation tasking but the MoD recently purchased some 59 (can't quite remember the exact numbers) of M1a1 Abrahms tanks and then came to the realisation for them to be appropriatly deployable for the ADF's needs, they'd need something to airlift them, and relying on the USAF wasn't an option to strategic planners.

There's some resentment about the acquisition process here because the overall cost including maintenance and operaterations was something in the order of Aus$2 billion (US$ 1,534,095,267.32, give or take ) and it was certain that it would cut into the various F-111 programs. And many in the RAAF are still pissy with Boeing's intransigence about problems associated with various systems (most notably the F/A-18 programs and are worried that associated upgrades and tech transfers won't take place (such as with the JSF) And given that Boeing's still not happy about losing out in the MultiRole Tanker/Transport tender, maybe their fears are justified.

 

This really sucks hard because we do buy some good toys from the US but business/poitical disorganisation (be it Australian or US) has screwed the ADF heavily in the past...