Boeing Tells C-17 Suppliers Line May End in 2009
ST. LOUIS, Aug. 18-- Due to the lack of U.S. government orders for the C-17 military cargo aircraft, The Boeing Company (NYSE:BA) is directing program suppliers to stop work on uncommitted airplanes. This move will be the first step in an orderly shut down of the production supply chain should no further orders be received from the U.S. government.
For over a year, Boeing spent its own money protecting the C-17 supplier base. This investment was intended to keep the production line viable while the U.S. Government and Boeing pursued international orders, and to allow time for the U.S. Government to update its post-9/11 mobility requirements, if they chose to do so. During that time Boeing received international orders and commitments for more than a dozen of the advanced air lifters. Congress has added funding for up to three more as part of its recent 2007 budget deliberations. However, when the orders are totaled, there are not enough to sustain continued production beyond mid-2009.
Since late 2005, Boeing has stressed the need for a commitment from the U.S. Government for continued C-17 procurement or the company would be forced to make the difficult decision to begin winding down the production line.
This action will ultimately affect the 5,500 Boeing jobs in California, Missouri, Georgia, and Arizona, directly tied to the C-17, and the program's nationwide supplier workforce that totals more than 25,000 people. Nearly 700 companies in 42 states provide parts and services that go into each C-17.
"The C-17 is one of the Defense Department's most successful acquisition programs ever," said Ron Marcotte, vice president and general manager of Boeing Global Mobility Systems. "No one questions its operational value. But we can't continue carrying the program without additional orders from the U.S. Government."
The stop-work orders affect long-lead items from suppliers that, in many cases, are built 34 months before a C-17 is delivered. Boeing is re- evaluating the financial impact should the U.S. government not order additional C-17s, and may incur costs aside from any recovered from the U.S. government.
A unit of The Boeing Company, Boeing Integrated Defense Systems is one of the world's largest space and defense businesses. Headquartered in St. Louis, Boeing Integrated Defense Systems is a $30.8 billion business. It provides network-centric system solutions to its global military, government and commercial customers. It is a leading provider of intelligence, surveillance and reconnaissance systems; the world's largest military aircraft manufacturer; the world's largest satellite manufacturer; a foremost developer of advanced concepts and technologies; a leading provider of space-based communications; the primary systems integrator for U.S. missile defense; NASA's largest contractor; and a global leader in sustainment solutions and launch services.
CONTACT:
Rick Sanford of Boeing Global Mobility Systems,
+1-562-593-7512,
rick.sanford@boeing.com ,
or Gary Lesser of Boeing+Global Mobility Systems,
+1-562-593-5233,
gary.a.lesser@boeing.com ,
or Paul Lewis of Boeing Communications,
+1-562-797-2186,
Paul.j.lewis2@boeing.com
Web site: http://www.boeing.com/
