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C-17 Globemaster III Production

On Sept. 18, 2013 Boeing announced that it would complete production of the C-17 Globemaster III and close the C-17 final assembly facility in Long Beach, Calif. in 2015. "Ending C-17 production was a very difficult but necessary decision," said Dennis Muilenburg, president and chief executive officer of Boeing Defense, Space & Security. "We want to thank the highly skilled and talented employees who have built this great airlifter for more than two decades and those who will help us as we continue to build the remaining 22 aircraft and support and modernize the global fleet for decades to come. The C-17 remains the world's most capable airlifter with unmatched readiness and cost effectiveness."

Boeing will continue after-delivery support of the worldwide C-17 fleet as part of the C-17 Globemaster III Integrated Sustainment Program (GISP) Performance-Based Logistics agreement. The GISP "virtual fleet" arrangement provides the highest airlift mission-capable rate at one of the lowest costs per flying hour.

"Our customers around the world face very tough budget environments. While the desire for the C-17's capabilities is high, budgets cannot support additional purchases in the timing required to keep the production line open," Muilenburg added. "What's more, here in the United States the sequestration situation has created significant planning difficulties for our customers and the entire aerospace industry. Such uncertainty forces difficult decisions like this C-17 line closure. We will continue to make tough but necessary decisions to drive affordability and preserve our ability to invest for the future."

Boeing expected a charge of less than $100 million, which will be recorded this quarter, as a result of this announcement. The charge will not impact financial guidance for the year. Nearly 3,000 employees supported the C-17 production program in Long Beach; Macon, Ga.; Mesa, Ariz. and St. Louis. Workforce reductions will begin in early 2014 and continue through closure. Boeing will provide employee assistance including job search resources, financial counseling, retirement seminars and help locating potential jobs within and outside of the company.

"We recognize how closing the C-17 line will affect the lives of the men and women who work here, and we will do everything possible to assist our employees, their families and our community," said Nan Bouchard, vice president and C-17 program manager. Additionally, the C-17 industrial team includes more than 650 suppliers in 44 states. Boeing and its suppliers provide 20,000 jobs in support of C-17 production.

Since the first flight on Sept. 15, 1991, the C-17 had amassed more than 2.6 million flying hours supporting airlift of troops and large cargo, precision airdrop of humanitarian supplies and lifesaving aeromedical missions. Boeing had delivered 257 C-17s, including 223 to the U.S. Air Force, and a total of 34 to Australia, Canada, India, Qatar, the United Arab Emirates, the United Kingdom and the 12-member Strategic Airlift Capability initiative of NATO and Partnership for Peace nations.

In November 1995 the Defense Acquisition Board (DAB) approved Milestone IIIB for full rate production of the C-17 program. The DAB also requested the C-17 program to plan, program, and budget for 120 C-17s and to conduct an analysis of the benefits of a multi-year contract. Of the 120 aircraft, forty-eight aircraft will be located at Charleston AFB; 48 at McChord AFB, WA; eight at Altus AFB, OK; and six with an Air National Guard unit in Jackson, MS. The remaining 10 C-17s will be redistributed as back-up aircraft inventory.

On 31 May 1996 Secretary of the Air Force, Sheila E. Widnall, signed letters of transmittal to McDonnell Douglas and Pratt and Whitney for 80 C-17 Globemaster III aircraft and engines, respectively, over seven years. The 80 aircraft purchased under multi-year procurement brought the C-17 fleet to 120 aircraft, with an expected contract completion date of November 2004. President Clinton previously signed into law a budget accord for the U.S. Government that contained language approving a multi-year purchase. The contracts were valued at $16.2 billion and will be the longest and the largest multi-year contracts ever entered into by the government. The Air Force anticipated a savings of over $1 billion through these long-term commitments. This was in addition to previously negotiated annual savings of more than $4.4 billion realized from production efficiencies, streamlining and reform initiatives.

Two C-17 Defense Acquisition Board (DAB) decisions, contained in the 3 Nov 95 and 1 Feb 96 USD(A&T) Acquisition Decision Memoranda (ADMs), directed the Air Force to proceed with a 120-aircraft production program and pursue a multi-year procurement for the last 80 aircraft. The FY96 Supplemental Appropriations Act and FY97 Defense Appropriations Act approved a 7-year MYP program. The Air Force is proceeding with an 80-aircraft MYP program (along with engines to support them) to complete a 120-aircraft total purchase at the maximum affordable rate (FY97-03 Quantity: 8-9-13-15-12-15-8), beginning with the economic order quantity (EOQ) funding in FY96.

Aircraft on contract bring the Air Force C-17 fleet to 120. Based on a buy of 120 aircraft, the last C-17 delivery would be in November, 2004. In addition, the 1998 Air Mobility Master Plan (AMMP) has stated a requirement for 15 more aircraft. As of late 2000 the plan was to replace 270 C-141s with 134 C-17s. At that time the Secretary of the Air Force was considering whether or not to delay the retirement of sixty-three C-141s assigned to the reserve components from 2006 to 2010. Although the tonnage moving capability remains about the same, flexibility in the airlift system was lost just because of the lack of numbers, or, what the Air Force refers to as the "number of tails." Thus, 134 C-17s can only be in half as many places as 270 C-141s.

As of early 2000 fourteen additional C-17s had been programmed at the end of the 80-aircraft MYP (FY03 +1, FY04 +5, FY05 +8) to replace Air Mobility Command's (AMC's) C-141 Special Operations Low Level (SOLL) II aircraft and meet requirements not included in the 120 aircraft program. The adjusted program is: FY03, 9; FY04, 5; FY05, 8.

In December 2001 Pentagon officials approved a plan to acquire 60 more Boeing C-17 jets -- bringing the total buy to 180 -- under a multiyear contract running from 2003 and extending through 2007.

As of early 2001 the Air Force estimated that it needed 170 to 180 C-17s to eliminate shortfalls in airlift capability. The number of C-17s required could increase if plans to modernize the fleet of 126 C-5s are cancelled. A new Mobility Requirements Study-2005 (MRS-05) concluded that the requirement to fight two nearly simultaneous major theater wars (MTW) imposed a minimum airlift requirement from 54.5 million ton miles per day (MTM/D), above the previously established 49.7 MTM/D level. In April 2001 Boeing proposed a follow-on multiyear procurement under which 60 C-17s would be bought at a rate of 15 per year and $152 million per plane [in FY '99 dollars]. The current average price is about $198 million [in FY '99 dollars]. The additional aircraft would have extended range fuel tanks and a maximum gross takeoff weight of 615,000 pounds, compared to 585,000 pounds on current aircraft.

The Air Force decided to purchase an additional 60 aircraft under a May 2002 contract worth as much as $10 billion, with production extending through 2007. This contract would bring total production to 180 aircraft. Under the multi-year procurement, [MYP], the Air Force would fund four planes in 2003, 10 in 2004, 11 in 2005, 12 in 2006, 14 in 2007 and nine in 2008. Under this MYP, the Air Force would pay for some of the airlifters after they are built, with Boeing delivering 15 planes per year.

As of early 2002 US Transportation Command had identified a requirement for a further 42 C-17s. A contract for the additional 42 aircraft could be worth about $5 billion and extend production through 2011, resulting in a total buy of 222 aircraft.



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