Boeing Company (NYSE:BA) to discontinue C-17 production

Posted by Chris Bell September 19, 2013 0 Comment 1811 views

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.

About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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