slz396
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Boeing To End C-17 Production

Sat Mar 03, 2007 5:19 am

Boeing is taking the first step to end production of its C-17 military cargo plane in 2009 due to lack of interest from the U.S. government and no new orders from overseas, the company said on Friday.

Despite heavy lobbying from Boeing, the US Defense Department did not request new funding for the plane in its budget for the fiscal year that begins Oct. 1 and without US Defense Department or international customer commitments, the closure of the line is the only option.

Boeing said it was assessing the potential financial impact of ending C-17 production and may incur costs beyond those that would be recoverable from the government while more than 7,000 jobs are at stake in California, Missouri, Georgia and Arizona.

http://today.reuters.com/news/articl...S&WTmodLoc=BizArt-L1-CompanyNews-2
 
slz396
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 5:21 am

Sorry, I accidentally posted this in the wrong forum: it belongs in Mil Aviation.

 
Blackbird1331
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 6:04 am

Well, if the US government is not interested in keeping the line open, Boeing should have the option to offer a civilian version. And, what will the military be lookking for in their next generation lifter?
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zanl188
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 7:34 am

Quoting Slz396 (Thread starter):
Despite heavy lobbying from Boeing, the US Defense Department did not request new funding for the plane in its budget for the fiscal year that begins Oct. 1 and without US Defense Department or international customer commitments, the closure of the line is the only option.

This is budgetary gamesmanship. USAF doesn't request additional C-17s because they know that the program is popular with Congress. USAF asks for things it needs but which aren't so popular (like F-22s). Boeing threatens to shutdown the line. Congress adds additional frames to the budget request on it's own. USAF gets the C-17s it wants without lifting a finger or expending any political capital.

At least that's how it worked last year....  Smile
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KevinSmith
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 7:40 am

Quoting ZANL188 (Reply 3):
Congress adds additional frames to the budget request on it's own. USAF gets the C-17s it wants without lifting a finger or expending any political capital.

Couldn't agree more with you. There is now way that the production line will shut down. There is too much demand for the airframe. At the rate that they are flying, the USAF will need new one here in 10 years anyway. That's a streach I know but it does emphasize the point that the USAF still needs them very much.
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PPVRA
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 9:39 am

Quoting Blackbird1331 (Reply 2):
Well, if the US government is not interested in keeping the line open, Boeing should have the option to offer a civilian version. And, what will the military be lookking for in their next generation lifter?

What would be the difference between a military and a civilian C-17?

Who do you have in mind that would order such aircraft?
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
Boeing4ever
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 12:20 pm

Quoting Blackbird1331 (Reply 2):
Well, if the US government is not interested in keeping the line open, Boeing should have the option to offer a civilian version. And, what will the military be lookking for in their next generation lifter?

Boeing already has. It's called the BC-17X. No customers. Typically freighter versions of passenger aircraft are better for civilian freight operations.

http://www.boeing.com/companyoffices/gallery/images/md17/md17.htm

It was offered by McDonnell Douglas as the MD-17 originally.





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KevinSmith
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 12:21 pm

Quoting PPVRA (Reply 5):
Who do you have in mind that would order such aircraft?

FedEx and UPS are in the market for a new cargo a/c. A joke of course.

Volga Dnepr comes to mind.
I'm sure there is a market for it where I'm not 100% sure.
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fridgmus
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 1:01 pm

With the heavy use of the C-17, I just don't see the line shutting down. The Air Force is putting a lot of hours on those airframes, more than anticipated. They're wearing them out! They'll order more eventually.

Can any one of you tell me anything about a "C-17B" variant? I've read about it somewhere, just can't remember where.

And I would love to see the BC-17X out there working!!!

Thanks,

Marc
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XT6Wagon
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 2:05 pm

C-17 makes a terrible freighter for civilian use. Too much money to buy and use. Its positive attributes are nearly useless since the civilian market usually doesn't have any desire what so ever to risk $$$ equipment into short unimproved runways, something that the C-17 was designed for in its military role.

I'm sure it would have sold a few frames however... IF the Russians never sold the AN-124. Since they did, they provide all the specialty heavy lift you could want.
 
Legs
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 2:53 pm

Does the C-17/BC-17X have any advantage in payload over other freighters in service?
 
CaptOveur
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 3:43 pm

Quoting Boeing4ever (Reply 6):
Boeing already has. It's called the BC-17X. No customers.

There likely won't be any

Quoting Legs (Reply 10):
Does the C-17/BC-17X have any advantage in payload over other freighters in service?

Maybe, but that is cancelled out by the shorter than an airliner range. Unless FedEx and UPS are planning on adding tankers to their fleet.
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LimaNiner
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 4:30 pm

Boeing should market these as the perfect companion to its 748BBJs...

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columba
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RE: Boeing To End C-17 Production

Sat Mar 03, 2007 5:40 pm

Quoting KevinSmith (Reply 7):
Volga Dnepr comes to mind.

An 124s are much cheaper than the cival version of the C 17 would be. Sad to see the last MDD design go !!!
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bhmbaglock
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RE: Boeing To End C-17 Production

Sun Mar 04, 2007 9:30 am

Quoting XT6Wagon (Reply 9):
C-17 makes a terrible freighter for civilian use. Too much money to buy and use. Its positive attributes are nearly useless since the civilian market usually doesn't have any desire what so ever to risk $$$ equipment into short unimproved runways, something that the C-17 was designed for in its military role.

I agree but oddly enough, it might actually happen:
Heavylift C-17? (by Crownvic Mar 4 2007 in Civil Aviation)
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art
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RE: Boeing To End C-17 Production

Sun Mar 04, 2007 12:48 pm

Wouldn't it be cheaper and better for the US to order just enough to keep the line open at a reduced level for a few more years? What happens if US forces need more in 5/6/7 years? With no C-17, the only suitable lift available would be... er, Russian, wouldn't it? Would be interesting to see Antonovs flying the stars and stripes but I don't think I would put any money on it happening.
 
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kc135topboom
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RE: Boeing To End C-17 Production

Mon Mar 05, 2007 12:47 am

Quoting Fridgmus (Reply 8):
Can any one of you tell me anything about a "C-17B" variant? I've read about it somewhere, just can't remember where.

The C-17B is a streched version, it carries more fuel and slightly more weight. Like the old C-141A, the C-17A usually "cubes out" well before they reach the max cargo weight, unless it is carrying a M-1 MBT. It could happen if the USAF cancels all of the 48 planned C-5A upgrades to the C-5M configueration. They will continue to upgrade the C-5Bs to C-5Ms.

Quoting PPVRA (Reply 5):
What would be the difference between a military and a civilian C-17?

The BC-17 is some $50M less than a military C-17A-ER. It does not have the short/unimproved field capability, military avionics, or air refueling capability, nor does the BC-17 carry a Loadmaster. It does retain the auster field capability so no ground support capability is needed beyond refueling and deicing. The BC-17 can also be ordered with the same B-757 RR RB-211 engines, as well as the PW-2040s or PW-2038s.
 
slz396
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RE: Boeing To End C-17 Production

Mon Mar 05, 2007 7:18 pm

Quoting Art (Reply 15):
Wouldn't it be cheaper and better for the US to order just enough to keep the line open at a reduced level for a few more years? What happens if US forces need more in 5/6/7 years? With no C-17, the only suitable lift available would be... er, Russian, wouldn't it? Would be interesting to see Antonovs flying the stars and stripes but I don't think I would put any money on it happening.

Just to put this in perspective : an EBIT drop of 3BN dollars a year and a reduction of labour force of about 7,000 puts the premature closure of the C-17 line on an even bigger scale than the current A380 problems Airbus is facing.

It'll be interesting to see whether the USAF will order 15 C-17s this year -just as they did last year- like Boeing would want them to do just to safe their a** again.

It would be like the French and German Governments buying 10 A380s each (for several years in a row) to help out EADS...
 
atmx2000
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RE: Boeing To End C-17 Production

Tue Mar 06, 2007 2:56 am

Quoting Slz396 (Reply 17):
It'll be interesting to see whether the USAF will order 15 C-17s this year -just as they did last year- like Boeing would want them to do just to safe their a** again.

It would be like the French and German Governments buying 10 A380s each (for several years in a row) to help out EADS...

No, it wouldn't. The C-17 is a military aircraft that was designed specifically for the US military and the US military is the principle customer. In contrast the A380 is a civilian aircraft. What use would the French and German governments have for 100+ A380s?

The US military can't expect Boeing to keep that line open running at a loss just so that the US gov can order it whenever they feel like. If they want that capability they should operate the line themselves, or pay for the costs of an idle line.
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kc135topboom
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RE: Boeing To End C-17 Production

Tue Mar 06, 2007 3:01 am

Quoting Slz396 (Reply 17):
It'll be interesting to see whether the USAF will order 15 C-17s this year -just as they did last year- like Boeing would want them to do just to safe their a** again.

No, the USAF did not originally ask for the additional aircraft last year, Congress did. It was a good move. The C-17 is a very important stratigic aircraft for US national defense. But, it is caught up in numerous stratigic programs that also need money. All Boeing is asking for here is for the USAF to tell them additional orders will be made, them Boeing can keep the line open. Otherwise, Boeing does not want to spend money on a production line that isn't being used.

Quoting Slz396 (Reply 17):
It would be like the French and German Governments buying 10 A380s each (for several years in a row) to help out EADS...

No, you are wrong again. The difference is the C-17 is an aircraft needed by the USAF. If the USAF cancels the C-5A conversion to C-5M, then we will need more C-17s to replace the lost airlift capability. Neither Germany nor France need the A-380, much less 40-50 of them, each. So, why order an unneeded and unusable aircraft? The C-17 is desprately needed.

Quoting Slz396 (Reply 17):
Just to put this in perspective : an EBIT drop of 3BN dollars a year and a reduction of labour force of about 7,000 puts the premature closure of the C-17 line on an even bigger scale than the current A380 problems Airbus is facing.

What????? I would love for you to explain your reasoning for arriving at that conclusion.
 
XT6Wagon
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RE: Boeing To End C-17 Production

Tue Mar 06, 2007 4:31 am

Quoting KC135TopBoom (Reply 19):

Quoting Slz396 (Reply 17):
Just to put this in perspective : an EBIT drop of 3BN dollars a year and a reduction of labour force of about 7,000 puts the premature closure of the C-17 line on an even bigger scale than the current A380 problems Airbus is facing.

What????? I would love for you to explain your reasoning for arriving at that conclusion.

being bad at math or on heavy drugs is about the only way to explain how ending a military program because the militaries around the world are not ordering more, is comparible to a program that has so far failed to even get a single frame into service.
 
checksixx
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RE: Boeing To End C-17 Production

Tue Mar 06, 2007 5:43 am

Quoting KC135TopBoom (Reply 19):
No, the USAF did not originally ask for the additional aircraft last year, Congress did. It was a good move. The C-17 is a very important stratigic aircraft for US national defense. But, it is caught up in numerous stratigic programs that also need money. All Boeing is asking for here is for the USAF to tell them additional orders will be made, them Boeing can keep the line open. Otherwise, Boeing does not want to spend money on a production line that isn't being used.

KC135...I thought the four additional aircraft off the line last year were the aircraft 'options' that had already been planned for from the USAF. And correct me if I'm wrong...they sold two of those airframes to Australia....Check
 
PPVRA
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RE: Boeing To End C-17 Production

Wed Mar 07, 2007 10:41 am

Quoting KC135TopBoom (Reply 16):
The BC-17 is some $50M less than a military C-17A-ER. It does not have the short/unimproved field capability, military avionics, or air refueling capability, nor does the BC-17 carry a Loadmaster. It does retain the auster field capability so no ground support capability is needed beyond refueling and deicing. The BC-17 can also be ordered with the same B-757 RR RB-211 engines, as well as the PW-2040s or PW-2038s.

Cool, thanks for the info.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
slz396
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RE: Boeing To End C-17 Production

Wed Mar 07, 2007 9:58 pm

Quoting XT6Wagon (Reply 20):
Being bad at math or on heavy drugs is about the only way to explain how ending a military program because the militaries around the world are not ordering more, is comparable to a program that has so far failed to even get a single frame into service.



Quoting KC135TopBoom (Reply 19):
I would love for you to explain your reasoning for arriving at that conclusion.

Because my friends, whether the planned customer is a commercial airlines or the military, the financial consequences of the premature ending of the C-17 line are identical to the delivery delays on the A380: when no planes are delivered to customers as originally budgeted, no money is received, hence the EBIT of the manufacturer drops significantly... In case of the C-17 Boeing reported their EBIT will drop with $3BN as compared to the original base line expectations Boeing had for this program.

Quoting KC135TopBoom (Reply 19):
The difference is the C-17 is an aircraft needed by the USAF. Neither Germany nor France need the A-380, much less 40-50 of them, each. So, why order an unneeded and unusable aircraft? The C-17 is desperately needed.

If it is so desperately needed, then why is Boeing forced to close the line due to lack of orders?

Reality is that at present NOBODY wants the plane and Boeing is pushing their only hope, the US military to order some anyway to stock up their reserve just to keep the line going and the cash flowing in....

Quoting Atmx2000 (Reply 18):
The C-17 is a military aircraft that was designed specifically for the US military and the US military is the principle customer. In contrast the A380 is a civilian aircraft. What use would the French and German governments have for 100+ A380s?

NONE, hence they aren't ordering any.
Which raises the question why it is considered normal practice for the US government to order unwanted planes, only to dump them with the military who doesn't really need them, but will fly them anyhow for the sake of 'national interest'.
It would be as crazy as France buying a huge A380 fleet to set up a dedicated public transport service linking Paris with their oversees territories in the Pacific and the Caribbean for the sake of 'national interest'...
 
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kc135topboom
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RE: Boeing To End C-17 Production

Wed Mar 07, 2007 11:51 pm

Quoting Checksixx (Reply 21):
KC135...I thought the four additional aircraft off the line last year were the aircraft 'options' that had already been planned for from the USAF. And correct me if I'm wrong...they sold two of those airframes to Australia....Check

No, all four RAAF C-17s were taken from exsisting USAF production slots, the same for the four CF C-17s. The options exercised by the USAF were to replace the four production RAAF airplanes. USAF is planning to exercise four more options for the Canalian airplanes. Since these are already planned aircraft and paid for, there will be no change. I believe the Australians already have their first C-17 delivered. IIRC, the USAF did the same thing to speed the delivery of the first four (then leased) RAF C-17s.

Quoting Slz396 (Reply 23):
Because my friends, whether the planned customer is a commercial airlines or the military, the financial consequences of the premature ending of the C-17 line are identical to the delivery delays on the A380: when no planes are delivered to customers as originally budgeted, no money is received, hence the EBIT of the manufacturer drops significantly... In case of the C-17 Boeing reported their EBIT will drop with $3BN as compared to the original base line expectations Boeing had for this program.

The original C-17 production line was planned to shut down in 2008, anyway. These small extensions are delaying this process until 2010 now, when the CURRENTLY planned last aircraft is delivered. All Boeing is trying to do here is determine when they can shut down the line. The costs of the line shut down are already programmed into it. Most of these costs are covered by the US Government.

The USAF cannot simply place orders to exersize option when ever they want, even if they have the money. Congress must approve it. This is much like the process for military equipment ordering in most countries of the world.

Quoting Slz396 (Reply 23):
If it is so desperately needed, then why is Boeing forced to close the line due to lack of orders?

Boeing wants to be able to long term plan their business, just as Airbus wants to. This is a smart business on Boeing's part. They are essentially telling everyone considering an order for C/BC-17s to "shit, or get off the pot".

Quoting Slz396 (Reply 23):
Reality is that at present NOBODY wants the plane and Boeing is pushing their only hope, the US military to order some anyway to stock up their reserve just to keep the line going and the cash flowing in....

Hmmm, Boeing already has the US, Canada, the UK, and Austrailia as customers for the C-17. There is a POTENTIAL order of up to 18 C-17s from NATO, as well as 15 new build BC-17s from HeavyLift Global. HeavyLift Global is also looking at aquiring up to 30 older C-17s from the USAF. If that happens, they will not order the BC-17s, but the USAF will order 30 new build C-17s to replace the 30 sold aircraft.

So, with 4 customers already for the C-17, and potentially 2 more, I would not say that "nobody wants the plane". With the current orders of 190 to the USAF , 6 to the RAF, 4 to the RAAF, and 4 to the CF, that equils 204 aircraft. There is a possibility of up to 48 more C-17s to be ordered. IIRC, that is more orders than for either the C-130J or the A-400M.

Quoting Slz396 (Reply 23):
Which raises the question why it is considered normal practice for the US government to order unwanted planes, only to dump them with the military who doesn't really need them, but will fly them anyhow for the sake of 'national interest'.
It would be as crazy as France buying a huge A380 fleet to set up a dedicated public transport service linking Paris with their oversees territories in the Pacific and the Caribbean for the sake of 'national interest'...

What on Earth makes you even think the C-17 is an "unwanted plane"? You need to stop smoking that stuff, my friend. It is rotting your brain.
 
atmx2000
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RE: Boeing To End C-17 Production

Thu Mar 08, 2007 6:39 am

Quoting Slz396 (Reply 23):
Because my friends, whether the planned customer is a commercial airlines or the military, the financial consequences of the premature ending of the C-17 line are identical to the delivery delays on the A380: when no planes are delivered to customers as originally budgeted, no money is received, hence the EBIT of the manufacturer drops significantly... In case of the C-17 Boeing reported their EBIT will drop with $3BN as compared to the original base line expectations Boeing had for this program

Where is EBIT figure of $3 billion coming from? Annual revenue from C-17 deliveries might be $3 billion, but EBIT is nowhere near $3 billion. Anyway your argument makes no sense. There is no such thing as a premature ending of the C-17 line, the C-17 is a program that has already broken even for the manufacturer. The question is whether or not the line should be kept open for the convenience of the US military at the expense of Boeing. I'm sure the Air Force would love to be able order additional aircraft down the road on an as needed basis, but manufacturing doesn't work that way.

Quoting Slz396 (Reply 23):
If it is so desperately needed, then why is Boeing forced to close the line due to lack of orders?

Because while it may be needed, the US military might not budget acquisition levels for a given year that would run the line at the level that would generate revenue to cover fixed costs. The USAF has multiple priorities currently, and different parts of the USAF are advocating for their priorities to get a share of the USAF acquisition budget. Some of those priorities are particularly important to the USAF but not necessarily with the entirety of Congress, and those are the ones the USAF knows they will have to go to bat for. The ones like the C-17 are popular with Congress, and they know they don't need to push for it.

Quoting Slz396 (Reply 23):
NONE, hence they aren't ordering any.
Which raises the question why it is considered normal practice for the US government to order unwanted planes, only to dump them with the military who doesn't really need them, but will fly them anyhow for the sake of 'national interest'.

Who says they are unwanted planes? All these planes are wanted and more planes are needed. The problem is that Congress and the President aren't going to accept an unlimited acquisition budget.
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kc135topboom
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RE: Boeing To End C-17 Production

Thu Mar 08, 2007 7:44 am

Quoting KC135TopBoom (Reply 24):
What on Earth makes you even think the C-17 is an "unwanted plane"? You need to stop smoking that stuff, my friend. It is rotting your brain.



Quoting Atmx2000 (Reply 25):
Who says they are unwanted planes? All these planes are wanted and more planes are needed. The problem is that Congress and the President aren't going to accept an unlimited acquisition budget.

Atmx2000, you said it a lot better than I did, my friend.
 
bigjku
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RE: Boeing To End C-17 Production

Thu Mar 08, 2007 8:18 am

Just to chime in since this is the field I specialized in for a long time.

It is very common practice for the military to not request items that it knows are congressionally popular so that congress will add it in.

The usual practice for looking at the budget is for congress to look at what is requested, subtract from that and then add in things they think are needed. The C-17 will be ordered because it is needed. It is just not necessary for the Air Force to request the plane to get it, which makes them more likely to get the other things they need.
 
commander_rabb
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RE: Boeing To End C-17 Production

Sun Mar 11, 2007 11:41 am

I would think that Boeing could expect one more order push from the U.S. Government prior to the production line being closed. There also may be a replacement in the works.

Rabbit
 
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kc135topboom
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RE: Boeing To End C-17 Production

Sun Mar 11, 2007 2:00 pm

Quoting Commander_Rabb (Reply 28):
I would think that Boeing could expect one more order push from the U.S. Government prior to the production line being closed.



Quoting BigJKU (Reply 27):
It is very common practice for the military to not request items that it knows are congressionally popular so that congress will add it in

My gut feeling is Boeing will lobby Congress to add USAF C-17s into the FY-2008 budget. Congress will add between 15 and 22 more aircraft, insuring a production line until 2011. The same will happen next year, except with reduced USAF aircraft, the balance made up by NATO, and Heavylift Global, perhaps additional orders from the UK, Australia, and Canada. The production line will then close in 2014.
 
baron95
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RE: Boeing To End C-17 Production

Tue Apr 03, 2007 2:13 pm

Quoting KC135TopBoom (Reply 24):
Boeing wants to be able to long term plan their business, just as Airbus wants to.

The issue is not really long term planning - it is really a short term business decision that MUST be made now. Most here are talking as if stoping the line is an instantaneous event when the last plane is built. It is NOT. The C-17 has some very long lead time compnents - some like landing gear have something like 2+years lead time. So, in essence, if an extra plane is to be built in 2010, Boeing needs to place orders with suppliers NOW. If no new planes are on order, Boeing needs to start notifying suppliers to shutdown NOW.

That landing gear supplier is not going to keep millions of dollars in tooling and jigs laying around without orders. The second they receive a shutdown signal from Boeing, they'll scrap and clear every bit of tooling and space previously used to build the C17 landing gear - thus, re-starting the line becomes cost prohibitive.

Hope this helps understand the prresure.

I agree, we need AT LEAST another 50 C17s if we are serious about projecting power and fighting two independent wars simultaneously. Just think about it. If North Korea invades South Korea tomorrow, how are we going to get the wares there and still re-supply Iraq and Afeganistan?
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Tancrede
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RE: Boeing To End C-17 Production

Tue Apr 03, 2007 8:30 pm

Quoting KC135TopBoom (Reply 24):
POTENTIAL order of up to 18 C-17s from NATO

Before shouting it, we shall wait if that order will ever happen. In your post, there is a lot of numbers and very few hard facts. I would say, instead, a lot of hope.

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