NEW YORK CITY -- Citing a difficult environment amid government spending cuts, Boeing (IW 500/14) announced Wednesday it would end production of its C-17 military transport aircraft in 2015.
Boeing said it would close the C-17 final assembly plant in Long Beach, California in 2015, after completing the 22 aircraft remaining to be built.
Nearly 3,000 employees will lose their jobs, including those at the Long Beach plant and in three other states: Arizona, Georgia and Missouri.
The workforce reductions will begin in early 2014 and continue through the shutdown, the company.
"Ending C-17 production was a very difficult but necessary decision," said Dennis Muilenburg, president and chief executive of Boeing Defense, Space & Security.
"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," he said.
Muilenburg noted that severe U.S. government spending cuts, known as sequestration, had created significant planning difficulties for Boeing's customers and the entire aerospace industry.
"Such uncertainty forces difficult decisions like this C-17 line closure," he added.
The end of the Boeing airlifter program was expected to have a ripple effect on jobs throughout most of the country, a further blow to the lackluster economy where the unemployment rate is 7.3% and job growth is weak.
Boeing said the C-17 industrial team includes more than 650 suppliers in 44 states and, including Boeing, supports 20,000 jobs.
The C-17's main rival is the A400M, made by European aircraft maker Airbus.
Boeing said it planned to take a charge of less than $100 million in the current quarter for the closure, but noted the decision would not affect its financial forecast for the year.
Copyright Agence France-Presse, 2013
