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Boeing Moves to Close Plant

Times Staff Writers

Boeing Co. said Friday that it had taken the first steps toward closing its sprawling C-17 assembly plant in Long Beach, a shutdown that is expected to be completed by the middle of 2009 unless substantial new orders are placed for the giant military aircraft.

Closing the plant, which employs about 5,500 workers, would deprive Long Beach of its largest private employer and deal a blow to hundreds of subcontractors in Southern California and around the nation that supply parts for the C-17. It also would bring to a close almost a century of airplane manufacturing in Southern California -- once a pillar of the region’s economy.

Boeing began telling suppliers Friday to stop producing parts for the C-17. It also told employees of the decision during an all-hands meeting at the plant, which is adjacent to Long Beach airport.

“I wanted to retire here,” information technician Mike Brown, 53, said as he left the meeting. “I’m sad. This is possibly the end of an era. But Boeing will go on, and I hope to go on with them.”

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The Chicago-based aerospace giant stressed that it would aggressively seek additional customers for the C-17 and continue to push Congress and the Air Force for orders that could keep the assembly line running beyond the expected closing date.

“We haven’t given up,” said Ron Marcotte, vice president of Boeing Global Mobility Systems.

Although the company has enough orders to keep the plant open for three years, many suppliers will quickly feel the pain of Boeing’s stop-work directive.

About 700 contractors employing 25,000 workers, 5,700 of them in Southern California, make parts for the C-17, Boeing said, including landing gear, control surfaces and electronics.

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Boeing is issuing the order now because lead times for parts can be as long as 34 months. Without additional buyers for the C-17, Boeing would be ordering parts for planes that might never be built.

“We are sorry to see the C-17 program come to an end,” said Irv Freund, vice president of sales and marketing for M.C. Gill Corp. in El Monte, which makes crew seats and other components. “We supported it not just from our two Southern California facilities but also from our facility in Maryland.”

Freund said his company, which also supplies Boeing’s thriving commercial airliner business, should be able to avoid layoffs despite the loss of the C-17 work.

Boeing’s action increases pressure on Congress and the Air Force to decide the future of the C-17, which transports troops and heavy equipment to trouble spots around the globe and delivers relief supplies to disaster areas. Cutting the supply chain now will make it more expensive to build planes in the future if the Air Force decides to request more, Boeing warned.

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The Air Force has ordered 180 C-17s, of which 154 have been delivered. A bill that would earmark funds for three more of the planes, which cost about $200 million apiece, is expected to go to the full Senate next month.

“It would truly be a shame to prematurely close down production of one of the great workhorses of our military,” Sen. Dianne Feinstein (D-Calif.) said in a statement.

Air Force officials have praised the C-17, also known as the Globemaster III, but funding a new fleet of airborne refueling tankers has been a higher budgetary priority for the service.

However, given the heavy use the plane has logged in flights to Iraq, Afghanistan and other far-flung locales, “it is prudent to discuss additional C-17s if the financial resources are there,” an Air Force spokesman said.

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At least one expert believes that the C-17 has a fighting chance.

“Not only is the plane strategically irreplaceable, it’s also politically popular,” said Richard Aboulafia, an aerospace consultant with Teal Group. “It’s not very likely that they’d shut it down after fewer than 200 planes have been delivered, with the existing fleet being worn out much faster than expected and no replacement in sight.

“It all adds up to a pretty good chance of survival.”

Indeed, the prospect of additional C-17 orders -- 15 from foreign governments and the three pending in Congress for the Air Force -- allowed Boeing to push back the planned closing date for the plant, which before Friday was December 2008.

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“What we’re overlooking is that it wasn’t that long ago we were talking about 180 airplanes,” Boeing executive Marcotte said. Now we’re talking about 180 plus 18.”

That wasn’t enough of a reprieve to lift the spirits of Boeing workers in Long Beach who got a gloomy glimpse of their future Friday.

Given the outlook, it wouldn’t make much sense to just keep working and hoping for new orders, said systems administrator Ruth Riley, 41, who has worked for Boeing for 18 years.

“I love my job, but I will start weighing my options,” the Los Angeles resident said. “I will look inside the company first.”

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Co-workers Ed Mitchell, a 60-year-old engineer, and Richard Petersen, a 78-year-old cost analyst, were among those who wondered why the Globemaster wasn’t getting stronger backing from the Pentagon.

“These are generational wars we are fighting,” Mitchell said. “They will go on for years, and we will need this aircraft.”

A friend, seeing Mitchell and Petersen talking to a reporter, pulled her car to the curb long enough to shout defiantly, “This is not over. We are going to fight for this program!”

But not Petersen. “I’ve already retired four times,” he said. “This will be my last job.”

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Nearby businesses are also concerned.

“I thought this was a promising location, but it hasn’t turned out that way,” said Ulises Leon, whose Subway sandwich shop draws Boeing employees in large groups, even on weekends.

Long Beach officials estimate that the C-17 program contributes $831 million a year to the local economy. They note that plant workers live throughout Southern California and suppliers are dotted from Chatsworth to San Diego, spreading the effects well beyond the city.

“It will be a big hit for Long Beach if the plant closes, and it will be an equally big hit for the region,” said Robert Swayze, the city’s manager of economic development.

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It would be especially tough to lose jobs that pay an average of $65,000 a year in an area with an average annual wage of $40,000, said Joseph Magaddino, head of the economics department at Cal State Long Beach.

One bright spot: The 120-acre factory site could find ready takers for redevelopment.

“It’s awfully valuable real estate,” said Robert Alperin, senior director of brokerage Cushman & Wakefield. “Those kinds of parcels are scarce” in Southern California.

The Long Beach plant’s demise would end the age of airplane manufacturing in Southern California that stretches back to the early 20th century. It features such legendary pioneers as Donald Douglas, Charles Lindbergh, Amelia Earhart, Jack Northrop and Howard Hughes. The plant was built by Douglas during World War II and at its peak employed 50,000 people.

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“It’s a sad moment, not only because of the job losses but because it really is an end of an era,” said Magaddino of Cal State Long Beach.

“So much of Southern California’s history was associated with the development of commercial and military aircraft.”

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(BEGIN TEXT OF INFOBOX)

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End of an era?

Boeing plans to shutter its Long Beach plant in mid-2009 if the Pentagon does not place additional orders for the C-17 military cargo plane.

Chronology: Aviation history in Long Beach

1940: In preparation for World War II, Douglas Aircraft builds a 1.5-million-square-foot plant on 200 acres in Long Beach.

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World War II: At its peak, the Douglas plant in Long Beach produces one C-47 military cargo plane every two hours.

1946: Douglas introduces the C-74 military transport plane, the predecessor of the C-17.

1950: “Instant city” of Lakewood sprouts from bean fields near the Douglas plant as aerospace booms.

1954: Lakewood becomes the 17th-largest city in the state.

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1956: Douglas lays plans for a 1-million-square-foot assembly hangar in Long Beach for the new DC-8 commercial jet.

1967: Douglas Aircraft merges with McDonnell Aircraft, forming McDonnell Douglas.

1970: Douglas’ DC-10 commercial airliner makes its maiden flight from Long Beach.

1979: The Long Beach-built McDonnell Douglas MD-80 commercial airliner makes its maiden flight.

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1982: A C-17 contract is awarded to McDonnell Douglas.

1985: McDonnell Douglas expands its Long Beach plant by 2 million square feet.

1988: C-17 assembly begins in Long Beach.

1990: McDonnell Douglas’ MD-11 makes its maiden flight from Long Beach.

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1991: The C-17 makes its first test flight.

1992: A wing breaks during a C-17 structural test.

1993: The Pentagon limits its initial C-17 order to 40 planes and puts the program on probation.

1994: McDonnell improves its C-17 program and delivers aircraft ahead of schedule.

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1995: The Pentagon places an $18-billion order for 80 additional C-17s, preserving 8,700 jobs in Long Beach.

1997: Boeing acquires McDonnell Douglas and announces that it will end MD-80, MD-90 and MD-11 production lines by 2000, eliminating 3,750 jobs.

1998: Boeing announces the elimination of 5,000 jobs in Long Beach and the closure of 18 million square feet of production space.

1999: Boeing delivers the first 717 commercial airliner and last MD-80.

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2001: Boeing cuts 2,100 jobs because of slumping 717 sales.

2005: Boeing ends production of the 717, the last commercial jetliner built in Southern California.

2006: The Air Force scraps plans to order additional C-17 cargo jets, the last remaining airplane production program in California.

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Sources: Douglas Aircraft Co., McDonnell Douglas Corp., Boeing Co., Long Beach Press-Telegram and Times reports. Compiled by Times research librarian Scott Wilson and graphics reporter Brady MacDonald

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Times staff writer Roger Vincent contributed to this report.


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