March 6, 2006

Boeing gets transport order from Australia
The deal is the first foreign sale of C-17s, but that alone is not likely to keep Long Beach production going.

By Otto Kreisher
Copley News Service

WASHINGTON -- The Australian Air Force has committed to buying as many as four C-17 transports, the Australian defense ministry and Boeing said Friday.

Although the first foreign sale of the long-range transport is "really good news for us," a Boeing spokesman said, the additional production does nothing to reduce the worries about ending the Long Beach production line by 2008, unless the U.S. Air Force agrees to buy more than the 180 planned.

"The key to that is the ongoing budget process in Washington, which ultimately will determine if the line stays open," said Rick Sanford, a Boeing spokesman in Long Beach.

Australian Minister for Defense Brendan Nelson announced the agreement to buy the C-17s and associated spare parts and support equipment following an inspection of a U.S. Air Force Globemaster III at a Royal Australian Air Force Base.

"This is the only aircraft currently in production which has a proven capability to meet ADF (Australian Defense Forces) operational commitments, in Australia, the region and globally," Nelson said.

"The C-17 has four times the carrying capacity of the RAAF C-130 Hercules" and has "the load capacity and range that will allow the ADF to rapidly deploy troops, combat vehicles, heavy equipment and helicopters," he said in a statement.

The estimated $2 billion deal for the C-17s is the first foreign purchase of the four-engine transport, though Great Britain has announced plans to buy the four C-17s that it has been leasing. Canada, Italy and some other allies also are interested in buying small numbers of C-17s.

But even if those deals are completed, the fate of Boeing's Long Beach factory, which employs about 6,000 workers, would remain in doubt.

Sanford said the C-17 workforce was told of the deal Friday morning, "but we had to temper that with the fact that the pressure is not off."

The production rate will not change because of the Australian agreement, he said.

Boeing has been delivering 15 new C-17s a year under a multiyear Air Force contract and actually delivered 16 last year, Sanford noted.

The proposed Air Force budget for 2007 contains $3.1 billion to buy the last 12 aircraft to complete the authorized program of 180 C-17s.

Because they are ahead of the delivery schedule, Boeing will be able "to take on these international orders without affecting the Air Force contract," Sanford said.

He said the first Australian airplane will be delivered by December and the others will have been finished by 15 months later, in 2008, the same time that the last of the contracted Air Force airplanes are expected to be completed.

Boeing officials got some encouragement from testimony of top Air Force officials during congressional hearings this week, when it was disclosed that the Air Force listed obtaining seven more C-17s as its top unfunded requirement.