Boeing Cuts C-17 Price in Offer to Air Force

Boeing Co. has offered to build 60 more C-17 military transports for the Air Force for $149 million apiece, 15% less than the price in the current contract. Stu Thomson, Boeing’s vice president for business development, said that the aerospace company made the unsolicited offer Tuesday to extend by four years the production run of its top military aircraft program, now scheduled for its last delivery in 2003. Boeing has offered to invest $275 million in cost-saving management and manufacturing initiatives, Thomson said. The Boeing proposal comes as the Air Force and Pentagon are reviewing requirements for a 21st century transport fleet, which could include more C-17s and more Lockheed Martin C-130J aircraft than currently planned and possibly updated versions of the Lockheed Martin C-5B. Boeing is under contract to the Air Force to build 120 of the high-tech transports that are capable of delivering huge military vehicles, such as tanks, on unpaved runways. The 120th aircraft will cost about $174 million. Under the current schedule, Boeing would need to start closing parts of its Long Beach production line in about 18 months, Thomson said. Boeing shares fell 6 cents to close at $33.94 on the New York Stock Exchange.