Photo courtesy of U.S. Air Force.
Additional reporting by Brian Addison.
The C-17 “Globemaster III” Long Beach assembly facility will be closed once production on the C-17 transport plane is completed in 2015, announced Boeing Co. on September 18, just one week after the 233rd and final domestic delivery of the last C-17 to the U.S. Air Force.
“Ending C-17 production was a very difficult but necessary decision,” said Dennis Muilenburg, president and chief executive officer of Boeing Defense, Space & Security, in a statement. “We want to thank the highly skilled and talented employees who have built this great airlifter for more than two decades– and those who will help us as we continue to build the remaining 22 aircraft and support and modernize the global fleet for decades to come.”
With nearly 3,000 employed under the C-70 program throughout Long Beach, Macon, Ga., Mesa, Az. and St. Louis, workforce cutbacks are expected to begin as early as 2014 into closure. These cutbacks might also affect employees at the Huntington Beach Boeing facility off of Bolsa Avenue.
“Shuttering the C-17 program is a direct result of sequestration and the federal government’s inability to compromise on a balanced budget,” said Supervisor Don Knabe in a statement. “Our leaders at the national level do not witness first-hand the direct effects their dysfunction creates. During a time when we are still putting men and women in harm’s way in the name of national security, these sequestration cuts have seriously limited our ability to protect ourselves domestically and abroad. The C-17 is a vital aircraft, having supported every major natural disaster around the globe during the last two decades and providing the versatility to complete any mission, anywhere: preserving peace, saving lives and delivering hope.”
Despite the facility closure, the Globemaster III Integrated Sustainment Program (GISP) will continue on, providing post-delivery support to the global C-17 fleet. C-17 production will continue at 10 planes per year for the remaining 22 orders that are in existence. Given more international interest–including orders from Qatar, Australia, the United Arab Emirates Air Force, the United Kingdom and Canada–following the U.S. government’s lack of interest in the aircraft, Boeing was unable produce the plane beyond 2015 while simultaneously maintaining financial viability.
Specifically, the Long Beach assembly facility was expected to remain open in the hopes of gaining new aircraft orders international contracts such as the aforementioned, the largest of which is a $4.1 billion deal with India.
“We recognize how closing the C-17 line will affect the lives of the men and women who work here, and we will do everything possible to assist our employees, their families and our community,” said Nan Bouchard, vice president and C-17 program manager.
Mayor Bob Foster, however, noted that despite the fall in interest within the U.S. and the eventual affect it will have on thousands of workers, Long Beach played a continual role of support.
“As work slowed over the last several years,” said Foster in a press release, “we worked side by side with Boeing to extend the C-17 line for seven additional years. There’s a sense of sadness to see the end of an institution, but Boeing has grown its commercial aircraft work and announced an engineering design center over the past few years that solidifies the Company’s commitment in Long Beach.”
5th District Councilmember and aviation history buff Gerrie Schipske was optimistic about the abandoned workforce, insinuating that other businesses could very well snatch up an already-trained corps of workers.
“This is an opportunity for other companies in the area to take very experienced, well-trained Long Beach worker and put them to work in tech and growth industry jobs,” Schipske said. “It’s important to be able to provide new opportunities for these workers while the City of Long Beach has an 11.9% unemployment rate as of August–in California the unemployment rate for the same period is 8.7%–and a 22% poverty rate.”
Boeing expects a recorded charge this quarter of less than $100 million as a result of this announcement; the charge will not impact financial guidance for the year.
“Our customers around the world face very tough budget environments. While the desire for the C-17’s capabilities is high, budgets cannot support additional purchases in the timing required to keep the production line open,” Muilenburg added. “What’s more, here in the United States the sequestration situation has created significant planning difficulties for our customers and the entire aerospace industry.”
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