C-17 Program Is Back on Track, May Fly in March, McDonnell Douglas Says

McDonnell Douglas executives asserted Monday that their troubled Air Force C-17 cargo jet program in Long Beach is finally making better progress and that the company will attempt to fly the first aircraft as early as next March, making up for a small part of the delays that had earlier dogged the program.

The C-17 is among major production and development programs that have fallen behind schedule, causing serious financial trouble at the firm’s Douglas Aircraft unit. If Douglas can restore order to the C-17 program, it would lift a significant burden as it also attempts to sharply increase commercial jet aircraft production. Air Force officials remain cautious, however.

The first giant C-17, known internally as T-1 (for Test Aircraft 1), was moved onto its own landing gear from a large assembly jig early Saturday morning and rolled to its next station on the assembly line at the large Douglas hangar bordering the Long Beach Airport.

“We have met all of the major milestones on the program since the beginning of the year,” John Capellupo, deputy president at Douglas, said Monday during a two-hour tour of the C-17 assembly plant given to reporters.

Those milestones were revised to accommodate the delays that Douglas Aircraft experienced earlier in the program, but Capellupo’s assertion means that the company is not falling any further behind schedule. He said production discrepancies, marked by red tags on the aircraft as they are inspected, are down 35% to 40% on the second C-17 from the level that occurred on the first.

Capellupo said the most recent financial estimates indicate that the company will stay within the $4.9-billion ceiling of its fixed-price incentive contract for full-scale development and thus will not take a loss on that portion of the C-17 program. He added that McDonnell will not take a second-quarter charge on the program.

Air Force officials in the Pentagon are somewhat less optimistic that Douglas can fly the first C-17 next March and remain concerned whether Douglas has resolved all of the problems on the plane’s electronic flight-control system and its mission computer.

Douglas terminated a subcontract with GM’s Delco division for the mission computer software in 1989--after Delco experienced problems--and decided to develop the software itself. Douglas also terminated a subcontract in 1989 with Honeywell for the flight-control system and awarded that work to General Electric.

Capellupo said the two systems are now “on schedule.”

But it was learned Monday that the Defense Department’s inspector general is investigating whether the Air Force ignored its own requirements that the mission computer pass a so-called critical design review in 1989 before an option for additional aircraft production could be exercised.

An Air Force source said in an interview that the investigators are looking into whether the critical design review was only partially completed before the option was exercised for production of four C-17s.

Despite Douglas’ problems, the Air Force appears to be making significant efforts to help the company. Although the service has issued 34 “contractor deficiency reports” against Douglas for problems in Long Beach, it is not withholding any significant amount of money from the firm. Douglas is already $2.5 billion in debt, and if the Air Force withheld a large sum it could cause a significant cash problem.

In addition, Air Force sources said Monday that the service is telling Congress that it should fund six C-17 aircraft in the fiscal 1991 budget. Defense Secretary Dick Cheney proposed only four aircraft when he cut back the C-17 and other major programs several months ago.

Meanwhile, activity inside the cavernous 1.1-million square foot C-17 hangar appears to be stepping up. On Monday morning, the fuselage of the first C-17 was crammed with 125 workers, installing wire harnesses and ducting and completing riveting of major structures. Another 125 workers were on the wings, and 50 workers were spread along scaffolding outside the fuselage.

Gerald LaMar, Douglas’ manager for joining major structural pieces of the aircraft, said the advanced computer-controlled and laser-guided tools developed for the C-17 program are proving themselves out. LaMar, an industry veteran who was in charge of joining the major structures on Rockwell’s B-1 bomber, said the forward and center fuselage sections of the C-17 were mated in three minutes, compared to several days using conventional tools.

“We have a real airplane now,” La Mar said.