Boeing Official Says ‘Post-Production’ Contract Isn’t The End For C-17 Plant
By Sean Belk - Staff Writer
July 17, 2012 – Despite the United States Air Force recently announcing the authorization of a contract that includes “post-production” planning of Boeing’s C-17 program, a top official for the program said the aerospace company is still holding out for “strong customer demand” to extend the life of the Long Beach production plant.
Bob Ciesla, Boeing’s vice president of airlift and C-17 program manager, said in a statement sent via e-mail to the Business Journal that the contract, worth up to $500 million, allows the U.S. Air Force to purchase critical spare assemblies and initiates planning for “the eventual disposition of certain production components,” such as tools from Boeing and suppliers.
But he said the company still sees a “long-term future” for the program and remains fully focused on capturing new orders from existing and new foreign customers in addition to potential domestic opportunities. The line currently employs several thousand workers in Long Beach. Ciesla added that the 10-year contract, which has yet to be officially awarded, does not impact current production.
“Boeing continues to see a long-term future building and delivering the C-17 Globemaster III,” he said. “We remain focused on the demand for affordable, reliable and capable airlift globally, and it’s not uncommon in the normal course of business to begin planning for post-production with the Air Force customer. We are actively pursuing international sales and see strong customer interest in the capabilities only the C-17 can deliver.”
Fears the production plant will eventually shut down have been circulating for years since the U.S. Air Force, the program’s largest customer, has indicated it no longer needs the heavy-lift military aircraft amid substantial U.S. defense budget cuts.
Boeing announced last year it would reduce its production rate of the large aircraft starting this year. The plant now makes 10 instead of 15 C-17s per year.
As a result, the company announced reducing its C-17 workforce in Long Beach by 900 employees. Cindy Anderson, spokesperson for the C-17 program, said the job reductions were initiated this year and have yet to be fully completed. But no additional job reductions are expected, she said.
While the post-production contract allows the U.S. Air Force to purchase building parts that could be stored for future use, the company would still be able to continue its production if the line is extended, Anderson said. Ciesla added, “Should the Air Force determine requirements to place orders for critical spare parts, there’s no better time than now to leverage purchasing efficiencies while suppliers are equipped.”
Currently, the C-17 program has a backlog of 20 aircraft, including seven for the U.S. Air Force and 13 for international customers, he said. Foreign orders have been placed in recent years, mostly for humanitarian aid missions, by the United Arab Emirates, the United Kingdom, Australia and India, which purchased 10 aircraft.
Based on current, confirmed orders, C-17 production is expected to continue through third quarter 2014. But Ciesla added, “We see strong customer interest in the capabilities of the C-17 . . . Additional sales to new and existing international customers, as well as future domestic opportunities, have the potential to extend the line for years beyond this timeframe.”