Calif. Gov., Boeing plead to keep cargo plane in production

California Gov. Arnold Schwarzenegger (R) is pleading with the White House to continue producing Boeing’s C-17 Globemaster III transport aircraft.

California Gov. Arnold Schwarzenegger (R) is pleading with the White House to continue producing Boeing’s C-17 Globemaster III transport aircraft.

In an Aug. 15 letter, Schwarzenegger urged President Bush to reverse a decision to discontinue production of the airplane. The Air Force is scheduled to stop purchasing the C-17 Globemaster III after 2008, and the 180th and last airplane would be delivered in April 2008.

"Discontinuing production of the C-17 would have disastrous economic repercussions in California - and across the nation," Schwarzenegger wrote. "Currently C-17 production has an estimated economic impact of $8.4 billion nationally. In California, that impact exceeds $3.7 billion. If production is shut down in California, 346 company suppliers employing over 6,000 people will lose work with Boeing."

Once Boeing completes production of the existing C-17 line, the shutdown of their Long Beach plant alone will impact another 5,700 jobs in California, he said.

"All told, continued production of the C-17 will save 22,000 jobs in over 700 company suppliers in 42 states," Schwarzenegger added.

Boeing officials are trying to convince the Pentagon and Congress to approve funding for 10 more C-17 cargo airplanes in 2008, even though the last aircraft required by the Air Force is supposed to be delivered that year.

After that, the Air Force is no longer contracting for the C-17.

The decision has put Boeing on the defensive. The company has decided to protect its production line and keep it running by financing another 22 aircraft. A number of those aircraft are slated for international sales. Australia has a contract for four C-17s, the United Kingdom is buying one and Canada is poised to buy four.

The company also is in talks with Sweden to sell two of the cargo planes and could sell as many as four to NATO, said John Sams, vice president for the company’s Air Force programs.

But Boeing has to make a decision on how many aircraft it will fund out of its pocket, Sams said.

"What we need to do is make a decision sometimes this month [to see] what our path forward is," he said. "The decision that we would be faced with is how many airplanes are we willing to fund out of Boeing’s funds to protect the production without a customer." It is up to the Air Force to decide whether to close the line, he stressed.

He added that it takes 34 months to build a C-17. Even though the Air Force decided not to buy more C-17s after 2008, it submitted an unfunded requirements list for seven of the cargo planes this year.

Congress paved the way for an additional three in the 2007 defense authorization and defense appropriations bills. The Senate still has to vote on the spending bill and the conference on the defense authorization measure is still pending.

But Boeing would like to see the executive branch fund another 10 aircraft while the Air Force conducts an additional requirements study for the aircraft, which Congress asked for this year, said Sams.