Pointing to the lack of enough international orders and uncertainty caused by U.S. military budget cuts, plans to close its long-running production line in 2015, the company announced.
“Ending C-17 production was a very difficult but necessary decision,” Dennis Muilenburg, president and chief executive officer of Boeing Defense, Space & Security, said in a statement.
Boeing will close the line after completing the last of 22 C-17s for international customers.
The decision will impact about 3,000 jobs, many of them at the airlifter’s Long Beach, Calif., final assembly facility. The decision was broadcast at an all-hands meeting there to employees in St. Louis; Macon, Ga. and Mesa, Ariz. Workforce reductions and supply-chain impacts are expected to begin primarily in 2014, says Nan Bouchard, Boeing vice president and C-17 program manager.
Bouchard says she does not anticipate that the Long Beach facility would house a new production program.
Between now and the late 2015, Boeing will continue producing 22 Globemasters for international customers.
Of those 22, two are for an unnamed international customer, and seven are yet to be delivered to India, which has ordered 10.
“We have certainly discussed follow-on orders with India,” Bouchard says, adding she would defer to the Indian government about whether it will buy more.
Boeing does not yet have orders for the remaining 13, Bouchard notes.
Bouchard would not discuss the unnamed international customer. Potential additional international buyers include Kuwait, Algeria and Saudi Arabia. Boeing could also sell the Globemaster to a repeat customer: Australia, Canada, India, Qatar, the United Arab Emirates, the U.K. and the 12-member Strategic Airlift Capability initiative of NATO and Partnership for Peace nations.
Boeing has a post-production contract with the U.S. Air Force and will continue to evaluate C-17 tooling and work with the service on what it would like to retain for spare parts. That may enable the Air Force to one day make C-17s again. But, Bouchard notes, “No plans are in place to do that.”
Long Beach is a Boeing-owned facility, so not all closure costs will be borne by the Air Force, she says.
The Globemaster first flew in 1991 and since then has racked up more than 2.6 million flying hours. The Air Force has purchased 223 of the airlifters, and Boeing has delivered to other countries.