Design and Repair Work Adds $400 Million to C-17 Cargo Jet
The Air Force said Thursday that it will cost $130 million to design and produce a new wing for the McDonnell Douglas C-17 cargo jet over the life of the program, more than double the company’s prior estimate of $50 million.
In addition, recent Pentagon estimates suggest that repairs to the C-17’s slats and flaps, which have been prone to cracking, will cost an additional $270 million.
Separately, McDonnell Douglas said it has dropped efforts to sell or find a partner for its helicopter business in Mesa, Ariz. The St. Louis-based firm said a partnership or sale of the unit now “isn’t in the best interest of the company or its customers.”
In response to the news, investors bid down McDonnell shares $2.125 to close at $72 a share in New York Stock Exchange trading.
The combined $400-million cost of the two C-17 redesigns is far higher than expected and comes just as a team of government and industry experts is preparing recommendations for the Pentagon on whether the controversial program should be terminated.
The C-17 wing broke last year in a ground test of its strength.
The government and McDonnell would split the $400-million tab. The company must bear the entire cost of repairing the test aircraft wing, but the Air Force will pay for the cost of an engineering study to design a new wing.
