Boeing Company (NYSE:BA) to discontinue C-17 production
On Wednesday, Boeing Company (NYSE:BA) said that it will discontinue making the C-17 military-transport plane by 2015. This distinctive-looking plane has witnessed faltering sales. The company also said that it will be cutting-down its workforce that is involved in this 30-year old program, by 3,000 employees.
No new production at facility
Via this decision, the last major-aircraft production plant that the company has in Southern California will be closed down. Boeing Company (NYSE:BA) said that there are no imminent plans to move into any other production either military or commercial, into that space that has been vacated.
The company said that it will take a charge of below $100M in the current-quarter to discontinue the C-17 production in Long Beach as well as other facilities in Arizona, Mesa, Macon, Georgia and Missouri.
It said that this charge will not impact its full-year earnings in any way. It also said that they will try to place the laid-off employees somewhere else in the company. This shut-down move will also affect over 650 suppliers across 44 states in the country, where around 20,000 people are employed.
Planes still in production
Boeing Company (NYSE:BA) will start cutting-down the workforce by the start of 2014 as it still has 22 more of these planes in production. However, 13 of these planes have not yet been sold. So far, it has delivered 257 of these jets and 223 of them went to the United States Air Force. The Vice-president and C-17’s program manager, Nan Bouchard said that the company expects that the job-reduction related to this change will be moderated to a certain degree by deploying the employees to other programs.
The last aircraft will move through the company’s facility by mid-2014 and most of the lay-offs will commence around that time. One of the main reasons why production of these jets is being discontinued is because the sales have not been up to the mark. This is primarily because customers across the world and in the U.S have been facing very tough budget environments.