Boeing C-17 Program Enters 2nd Phase of Production Rate and Work Force Reductions

LONG BEACH, Calif., Jan. 20, 2011 /PRNewswire/ -- As part of a transition announced last year, Boeing (NYSE: BA) today confirmed it will deliver 13 C-17 Globemaster III airlifters in 2011 as the company moves to a new production rate of 10 C-17s per year. Boeing will reduce the production program's work force by approximately 1,100 jobs through the end of 2012. The company delivered 14 C-17s in 2010.

The move to the new production rate, announced in February 2010, will be completed this summer and result in the elimination of the second shift at the C-17 final assembly facility in Long Beach. The lower production rate is designed to extend the line as Boeing works to capture additional international orders.  

"This has been a very difficult decision, no question about it," said Bob Ciesla, C-17 program manager. "But reducing the number of C-17s we deliver every year – and doing that with a smaller work force – will allow us to keep the production line open beyond 2012, protect jobs, and give potential customers more time to finalize their airlift requirements."

Boeing will provide assistance for impacted workers seeking potential positions elsewhere within the company.  

"We've been communicating frequently with our employees about this process for the past year and will continue to do so," said Ciesla.

Boeing anticipates that the work force reduction will primarily impact Long Beach, where approximately 900 of the 1,100 reductions will take place at the program's final assembly site. The remaining 200 reductions will impact C-17 production program employees in Macon, Ga., Mesa, Ariz., and St. Louis. The company will try to redeploy many of the affected employees to other programs or other Boeing locations where the company has suitable job openings.  

The program, which supports roughly 25,000 supplier jobs in 44 states, has an annual economic impact of approximately $5.8 billion. Now in its 18th year of service, the C-17 has supported numerous military transport, humanitarian and disaster-relief missions worldwide. The fleet continues to operate at an accelerated rate due to the recent troop surge in Afghanistan. It achieved 2 million total flight hours in December, less than five years after it passed the 1 million-flight-hour mark in March 2006.  

Boeing has delivered 226 C-17s worldwide, including 20 to international customers. The U.S. Air Force – including active duty, National Guard, and Air Force Reserve units – has taken delivery of 206. Other customers include the United Kingdom Royal Air Force, the Canadian Forces, the Royal Australian Air Force, the United Arab Emirates Air Force, the Qatar Emiri Air Force, and the 12-member Strategic Airlift Capability initiative of NATO and Partnership for Peace nations. India and Kuwait are expected to be the next C-17 customers.

A unit of The Boeing Company, Boeing Defense, Space & Security (www.boeing.com/bds/) is one of the world's largest defense, space and security businesses specializing in innovative and capabilities-driven customer solutions, and the world's largest and most versatile manufacturer of military aircraft. Headquartered in St. Louis, Boeing Defense, Space & Security is a $34 billion business with 68,000 employees worldwide.

Follow us on Twitter: @BoeingDefense.

Forward-Looking Information Is Subject to Risk and Uncertainty

Certain statements in this report may be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "intends," "plans," "projects," "believes," "estimates," "targets," "anticipates," and similar expressions are used to identify these forward-looking statements. Forward-looking statements are based upon assumptions about future events that may not prove to be accurate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak to events only as of the date they are made and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by federal securities laws. Specific factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to, statements we make regarding our guidance relating to future financial and operating performance, the effect of economic conditions in the United States and globally, and general industry conditions as they may impact us or our customers, as well as the other important factors disclosed previously and from time to time in our other filings with the Securities and Exchange Commission.

Contact:  

Fernando Vivanco

Boeing Mobility Communications

562-810-6537

fernando.vivanco@boeing.com

Jerry Drelling

Boeing Mobility Communications

714-318-7594

jerry.a.drelling@boeing.com

SOURCE Boeing Defense, Space & Security



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