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 Boeing said that it would shut the production line in Southern
California three months earlier than anticipated, in mid-2015
instead of late 2015, a decision that affects about 2,200 workers
there. The closure also affects 300 workers in St. Louis, 300 in
Macon, Georgia, and fewer than 200 in Mesa, Arizona, spokeswoman
Cindy Anderson said.
Boeing first announced plans to close the line last September, and
at the time said it would produce 22 more of the four-engine planes,
which are capable of carrying heavy machinery, tanks and medical
supplies around the globe. It has since delivered five of the
planes. It now plans to build 10 in 2014 and seven in 2015.
"Based on current market trends and the timing of expected orders
... we have decided to build three fewer aircraft in 2015," Anderson
said.
Boeing cited faltering sales when it announced plans to close the
line last September. Of the 262 jets delivered so far, 223 went to
the U.S. Air Force. The Air Force, which is under budget pressure,
took delivery of its final new C-17 last year.
Foreign sales have not offset the loss of U.S. military orders.
Boeing said it has logged 39 foreign sales to Australia, Canada,
India, Kuwait, Qatar, the United Arab Emirates, Britain and a
12-nation group known as the Strategic Airlift Capability
consortium.
A sale to Kuwait in February put the price for one plane and related
equipment, training and support, at $371 million, according to the
U.S. Defense Security Cooperation Agency.
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By ending the C-17 program early, Boeing will take an
inventory-related charge of $50 million in the first quarter. That
charge is in addition to pension-related charges of less than $100
million that Boeing previously said it would take in closing the
line.
Boeing is in the process of laying off up to 3,000 employees who
worked on the program, and expects the job reductions to be
completed by mid-2015, Anderson said.
She said workers are being offered jobs at other Boeing factories
and that retirement and attrition also will reduce the number of
layoffs required.
(Reporting by Alwyn Scott; editing by Diane Craft, Grant McCool and
Jonathan Oatis)
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