As read here and elsewhere, Chicago-based Boeing Corporation has decided to cut the rate of C-17 production in Long Beach by one-third, producing ten aircraft per year instead of its current rate of fifteen.

Boeing is slowing down its production schedule in response to shrinking orders for its most excellent airlifter. “By slowing production the company is essentially buying itself some time,” so that the U.S. and foreign governments can “take a closer look at purchasing more planes,” according to Boeing spokesperson Jerry Drelling.

What does this mean for Long Beach? Simply that Boeing will be sacrificing an as yet undisclosed number of C-17 jobs in Long Beach so that the plant can stay open a few months longer. According to Los Angeles Times reporter W.J. Hennigan, should Boeing maintain its current production rate and no new orders are received, the C-17 plant would be closing altogether in 2012, two very short years from now.

Boeing seems to be doing everything it can both to sell more planes and to keep the C-17 line open as long as possible. On January 6th of this year Boeing and the United Arab Emirates Air Force and Air Defence announced that the UAE had signed a contract for the acquisition of six Boeing C-17’s. Two days later, on January 8th, Boeing announced that the U.S. government had received a Letter of Request from India‘s Ministry of Defence and the Indian Air Force regarding the potential acquisition of 10 C-17’s. Congress recently approved the purchase of ten new C-17’s despite that President Obama and Defense Secretary Gates have both been vocally opposed to funding any more planes.

These orders and potential orders are calculated into that 2012 deadline I mentioned so it makes perfect sense for Boeing to take the steps that it is to keep the line open a little longer in the hopes of getting more confirmed orders from somewhere.

These steps are not without some risk to Boeing. On its own C-17 website Boeing published this rather cryptic if thoroughly optimistic message:

“Because of continued bipartisan congressional support, and increasing public indications that the U.S. Air Force has requirements for additional C-17s, Boeing has extended company funding for production parts to include a total of 15 new aircraft beyond the 205 currently on contract through January, 2011. This decision will protect the option for cost-effective acquisition of C-17s in FY 09. Boeing is taking this action at its own risk with no negative impact to the government. We did not consult with the U.S. Air Force in regard to this decision.”

One has to wonder what the source could be of those increasing public indications that the U.S. Air Force has requirements for additional C-17s. Then again, perhaps it’s coming from the 30,000 workers in 43 states that all have a hand in C-17 production in one way or another.

Boeing is considered the top commercial business in Long Beach in terms of number of employees. Some 5,000 area residents trade their labor to Boeing for income to feed themselves and their families. Eventually, like it or not, orders for their most excellent plane are going to cease and most likely sooner, rather than later. So what is Boeing likely to do about that? Well, if past actions in Long Beach are any indication (717 production) once orders finally dry up Boeing will close the plant and leave 5,000 jobs and a huge chunk of vacant commercial real estate to be at once developed as a business park and to serve as a source of seemingly endless speculation for electric car companies and movie studios. In short, Boeing will do what Boeing’s stockholders expect… move on and keep earning a profit.

Boeing employees in Long Beach, if they are wise, are already planning for this eventuality and either lining up new jobs somewhere else or making themselves worth retaining by Boeing in some other capacity. Some of them are already scheduled to be laid off in the coming months, we just don’t know yet how many.

If they are wise, our Long Beach City Council is busy setting policies and developing incentives that will encourage more manufacturers to come here now so that those companies can help to fill the huge employment hole that Boeing will no doubt be leaving in just a few short years. I fear that if our City Government doesn’t do something fairly soon to better incentivize manufacturing and help to soften this blow, we will take the same sort of economic hit that we did when we lost the Naval Station and Shipyard in 1991 and the Navy Hospital in 1993. Those closures moved some 17,000 navy personnel, and all of their income, spending power and productivity, out of Long Beach for good.

I think we should be doing everything we can to prevent a repeat performance.

What do you think?

I very much welcome your questions and your comments!