Boeing Co. plans to cut almost 3,000 jobs as shrinking military budgets force an end to production of its C-17 Globemaster transport jet, a four-engine cargo plane developed for the U.S. Air Force.
The C-17 assembly facility in Long Beach, California, will close by 2015, and dismissals will begin in early 2014, Chicago-based Boeing said today in a statement. Boeing said it expects to record a charge of less than $100 million this quarter, which won’t affect the company’s forecasts for the year.
“Budgets cannot support additional purchases in the timing required to keep the production line open,” Dennis Muilenburg, chief executive officer of Boeing’s defense unit, said in the statement. “Here in the United States the sequestration situation has created significant planning difficulties for our customers and the entire aerospace industry.”
Boeing had been signaling for years that the Long Beach factory was probably destined to close as orders for the C-17 tapered off. The last Air Force plane was handed over last week from the plant and Boeing has 22 more still to be completed for international customers.
The facility, which employs about 2,000 of the program’s workers, is the last major airplane plant in southern California. Boeing inherited the factory when it acquired McDonnell Douglas Corp. in 1997.
Boeing hasn’t decided what it will do with the plant, although it doesn’t intend to move manufacturing for other commercial or defense aircraft into the building, Nan Bouchard, a Boeing vice president and C-17 program manager, told reporters during a conference call today.
“It will be sad that we’re closing the last major production facility in southern California, but we’re all proud to be part of that heritage,” said Bouchard, who has spent her career in the region. “There are other air lifters, but none are like the C-17.”
Boeing increased 1.1 percent to a record $118.40 at the close in New York, the eighth straight day its shares have risen.