Outside Boeing's C-17 plant in Long Beach
Boeing has announced it's laying off 1,100 workers who build its giant C-17 cargo plane. Nine hundred of them work at the company's sprawling plant in Long Beach.
Boeing spokesman Jerry Drelling says the company used to make 15 C-17s a year, but a drop in orders has forced the company to cut its production rate.
"When you're delivering fewer C-17s, a corresponding reduction of the workforce also has to take place, and that's unfortunate," says Drelling. "It's a very difficult decision. There is certainly no question about it. This is a world class workforce. This is certainly not what the company had wanted to, but we have to face the reality of economics now in terms of the order book."
That order book used to be full with demand from the U.S. Air Force. Of the 226 C-17s that Boeing has delivered in the last 18 years, the Air Force has taken 206.
But the Department of Defense ordered just 10 C-17s in its 2010 fiscal year budget, none in its FY11 budget, and its 2012 budget is still up in the air.
The Boeing C-17 cargo plane carries tanks, soldiers or disaster relief supplies to just about any place in the world. A smooth concrete runway or a strip of dirt – it doesn't matter, the C-17 can land on either one.
Boeing has been trying to land more foreign customers. India is in talks with the U.S. government to purchase 10 C-17s. Kuwait could acquire at least one.
"If you look at where we are today in terms of our firm orders, these take us to the end of 2012," Jerry Drelling says. "The India order, once it's finalized, would take us through 2013."
By slowing production down, Boeing's trying to keep the assembly running for longer and give foreign customers more time to place orders.
Under Boeing's current layoff plan, the Long Beach plant will trim 400 jobs this year and 500 jobs in 2012.
Long Beach city councilman Robert Garcia said assembly plants like that one built his city's middle class.
"These are workers that are especially trained in this field, and to then move to another type of job is going to take retraining and support," he said. "It's some thing that the city has stepped up to do and I think we need to continue to do that."