LOS ANGELES (AP) — Boeing Co. announced Wednesday that it will end production of its C-17 Globemaster III military cargo jet and close the final assembly plant in Long Beach in 2015, putting as many as 3,000 jobs at risk as orders plunged in the fragile world economy. That includes about 300 workers in St. Louis.
"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," Dennis Muilenburg, president and chief executive officer of Boeing Defense, Space & Security, said in a statement. "What's more, here in the United States the sequestration situation has created significant planning difficulties for our customers and the entire aerospace industry."
Last week, the Long Beach plant delivered the last of 223 C-17s produced for the U.S. Air Force. Nan Bouchard, Boeing vice president and C-17 program manager, said the company will complete 22 final aircraft: seven for the Indian Air Force, two for an international customer that she declined to name, and 13 that have not yet been sold.
"Despite strong international interest, we did not receive sufficient orders" to continue production, she said.
Boeing said it expects the announcement to result in a charge of less than $100 million this quarter, and that will not impact financial guidance for the year.
The company will begin reducing the C-17 workforce in 2014 at plants in Long Beach; Macon, Ga.; Mesa, Ariz.; and St. Louis. However, Boeing will make efforts to provide jobs elsewhere with the company, Bouchard said, and had plans to continue a repair and spare parts program for the planes through 2017 at least, Bouchard said.
With modernization and upkeep, the big planes are expected to last for decades, she said.
The massive, four-engine C-17 made its first flight in 1991, and military deliveries began about two years later. The plane is used to airlift tanks, supplies and troops as well as performing medical evacuations. It quickly became a war and disaster workhorse, prized for its ability to operate from basic airstrips and cover intercontinental distances with a full load without refueling.
With a payload of 160,000 pounds, it is designed to airdrop 102 paratroopers and their equipment.
Design work on the plane began at the million-plus square-foot Long Beach facility in 1981, when it was a McDonnell Douglas facility. Boeing merged with McDonnell Douglas in the 1990s. Boeing has so far delivered 257 planes worldwide, at a cost of about $311 million each when research, development and construction costs are included.
The Long Beach plant has about 2,000 employees.
"It will be sad that we're closing this last major production facility in Southern California but again, we're all very proud to be part of that heritage," Bouchard said.
Boeing has about 20,000 employees in California, working on a variety of projects. That includes commercial aircraft, new markets such as cyber security and the largest satellite design and manufacturing factory in the world, Boeing said.
Boeing employees will be heading back to work Tuesday morning after Friday's storms knocked out power to the Hazelwood facility, forcing it to close.
Some buildings were still in the dark Monday night, forcing the aerospace company to cancel work for many third shift employees overnight.
Company officials say that by 3:30 Tuesday morning, Ameren crews had restored power to all Boeing buildings. First shift employees are expected to report to work.
The Alton Belle Casino is closed due to flooding along the Mississippi River at Alton.
The River City Casino in Lemay is also closed because the roads leading to the casino are covered by floodwaters from the Mississippi.
Due to power outages affecting several Boeing campuses in north St. Louis County, Boeing is reminding employees to check the company’s employee hotline (800-899-6431), to see if they are to report for their shift Monday. All essential maintenance workers are to report to work as scheduled.
The National Personnel Records Center in North County will be closed Monday due to a power outage from the Friday storms. The center is expecting to have the power restored this afternoon. Employees should check the center’s weather hotline (314-801-0900) this evening for the latest information.
One Boeing employee faces charges after authorities found meth-making materials in one of the company's buildings yesterday.
Prosecuting Attorneys say Dennis Banker admitted to police that he not only put the materials in another employee's office, but left a note saying another employee was the one who brought the chemicals into the office. Authorities were alerted to the situation when a fire alarm tripped early Thursday morning.
A check of security cameras showed, Banker entered the building minutes before the alarm.
Emergency workers responding to a fire alarm at Boeing Wednesday morning discovered a stash of chemicals that are used to make meth.
Berkeley police say the alarm went off around 10. Firefighters found the chemicals in the building and police removed them.
One Boeing employee is being held in connection to the incident.
The County Board approved $3.65 million dollars in bonds to finance the expansions on Monday. The Belleville News-Democrat reports that both companies will repay the county through renewed lease agreements at the Mascoutah airport.
County Board Chairman Mark Kern told the paper that the companies expect to add a combined 60 jobs at the site.
The bonds are part of an upcoming $30 million bond sale, which will also fund more than $20 million in road projects and refinance bonds previously issued by the county.
They said Friday they had not pinpointed the causes of the two battery problems that resulted in the global grounding of the technologically advanced Dreamliner planes.
But Boeing chief project engineer Michael Sinnett said a new design has many layers of safeguards to prevent battery fires and overheating.
The new design has measures to contain the problem from spreading and to keep the aircraft safe, even if batteries malfunction again.
The executives made the comments in Japan, where All Nippon Airways was the launch customer for the 787.
SEATTLE (AP) - Boeing Co.'s engineers have accepted a new four-year contract while technical workers rejected their offer and voted to authorize a future strike.
The union representing both groups had recommended rejection of the contract because it would not provide pensions to new employees. They would have a 401(k) retirement plan instead.
The union called that unacceptable, but the Chicago-based aerospace company said the change was important to its future.
The vote tallied late Tuesday came as the company is trying to solve battery problems that have grounded its new 787s.
The engineers and technical workers in the union work on plans for new planes and solve problems that arise on the factory floor. The two units bargain at the same time, but their contracts are separate and independent agreements, the union noted.
While a strike by the technical workers is not imminent, the vote means the negotiating team can call one at any time, said Bill Dugovich, spokesman for the Society of Professional Engineering Employees in Aerospace.
The engineers' vote means those 15,500 employees have a new contract in place, Dugovich said. Union negotiators hope to resume contract talks soon on behalf of the 7,400 technical workers, he said.
Boeing Commercial Airplanes President and CEO Ray Conner said in a statement that the company was pleased with the engineers' vote but "deeply disappointed" in the technical workers' rejection of what he called the company's "best and final" offer.
"The realities of the market require us to make changes so we can invest in new products and keep winning in this competitive environment," Conner said in his statement.
"That's why our proposal to move future hires to an enhanced 401(k)-style retirement plan is so important, as we have repeatedly emphasized over the course of these negotiations."
Boeing spokesman Doug Alder said the company is legally obligated to have discussions with SPEEA, but he noted Conner's statement about the importance of the 401(k) transition for future hires.
"That remains our position," Alder said.
Washington Gov. Jay Inslee said he's concerned about the split vote and spoke to union and Boeing representatives, urging them to resume negotiations.
"We cannot overstate the importance of the aerospace industry to the economy of Washington," Inslee said in a statement. "There are more than 131,000 employees in aerospace-related companies working across the state, the vast majority of which are directly reliant on the Boeing Company."
Union members rejected one contract offer in October. The previous contract expired in November.
SPEEA went on strike for 40 days in 2000.
"With this second rejection by technical workers of Boeing takeaways, it's time for the company to stop wasting resources and improve its offer to reflect the value and contributions technical workers bring to Boeing," SPEEA Executive Director Ray Goforth said in a statement. "That way, we can avoid a strike and focus on fixing the problems of the 787 and restoring customer confidence in Boeing."
The latest labor unrest is happening as U.S. regulators launch an open-ended review of the 787's design and construction. Last month, a battery on a parked 787 caught fire in Boston. On Jan. 16, another 787 made an emergency landing in Japan after another battery problem.
All 50 787s that Boeing had delivered so far are grounded until the issue is resolved.
The union's nearly 23,000 employees are mostly in the Puget Sound region. Union leaders believe a strike would shut down Boeing production lines in Everett, Wash., where its big planes are made, as well as in Renton, Wash., where it cranks out the widely used 737.
The factory-floor assembly work is done by the members of the International Association of Machinists. The Machinists approved a new, four-year contract in December 2011, after a walkout in 2008 that contributed to a 3 1/2-year delay in delivering the first 787.
It was also a factor in Boeing opening a plant in South Carolina, where laws make it more difficult to unionize.
The union for Boeing's engineers and technical workers is counting ballots on the company's latest contract offer. It has recommended that members reject the offer because it gives new members a 401(k) retirement plan instead of a pension.
The union also wants authority to call a strike if talks break down.