LONG BEACH TAKES A HIT

It's a black Friday at the big Boeing Co. plant in Long Beach where workers received word this morning that production on the C-17 military cargo plane will end, a decision likely to eliminate 11,500 jobs, many of them in Southern California.
Workers got the news via a videotaped statement from Jim Albaugh, president and chief executive officer of the company's Integrated Defense Systems unit. Dave Bowman, Boeing's vice president and C-17 program director, weighed in live.
The company's terse news release follows.
Due to the lack of U.S. government orders for the C-17 military cargo aircraft, The Boeing Company is directing program suppliers to stop work on uncommitted airplanes. This move will be the first step in an orderly shut down of the production supply chain should no further orders be received from the U.S. government.
For over a year, Boeing spent its own money protecting the C-17 supplier base. This investment was intended to keep the production line viable while the U.S. Government and Boeing pursued international orders, and to allow time for the U.S. Government to update its post-9/11 mobility requirements, if they chose to do so. During that time Boeing received international orders and commitments for more than a dozen of the advanced air lifters. Congress has added funding for up to three more as part of its recent 2007 budget deliberations. However, when the orders are totaled, there are not enough to sustain continued production beyond mid-2009.
Since late 2005, Boeing has stressed the need for a commitment from the U.S. Government for continued C-17 procurement or the company would be forced to make the difficult decision to begin winding down the production line.
This action will ultimately affect the 5,500 Boeing jobs in California, Missouri, Georgia, and Arizona, directly tied to the C-17, and the program's nationwide supplier workforce that totals more than 25,000 people. Nearly 700 companies in 42 states provide parts and services that go into each C-17.
“The C-17 is one of the Defense Department's most successful acquisition programs ever,� Ron Marcotte, vice president and general manager of Boeing Global Mobility Systems, said in the release. “No one questions its operational value. But we can't continue carrying the program without additional orders from the U.S. Government.�
The stop-work orders affect long-lead items from suppliers that, in many cases, are built 34 months before a C-17 is delivered. Boeing is re-evaluating the financial impact should the U.S. government not order additional C-17s, and may incur costs aside from any recovered from the U.S. government.
Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said that he learned of the decision Thursday afternoon.
“It's a tragedy for Long Beach, it's a tragedy California and a tragedy for the nation. You are losing jobs in a very unique capacity that are going to be hard to replicate in the future.�
In addition to the jobs at the plant Kyser said that about 6,000 others are spread among suppliers in the region.
In Los Angeles County the average average aircraft manufacturing wage is $$73,200. And each job at the plan creates 3.4 other elsewhere in the economy.
Kyser also wonders why the government has five fighter programs in production or development.
“There are a lot of people concerned about the future airlift capacity for the U.S. military
Kyser said.
Sen. Dianne Feinstein, D-Calif., Gov. Arnold Schwarzenegger, a
Republican, and Rep. Juanita Millender-McDonald, D-Long Beach, are among the elected leaders who have urged the Bush Administration to keep the program alive.
The bottom line: The local aerospace sector is taking a big hit at the same time the housing market is cooling. Sort of feels like the early 1990s all over again.