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Boeing Co. didn't quite announce the end of the C-17 program in Long Beach, but it came pretty close. Directing suppliers to stop work on any work that's not already in the pipeline "will be the first step in an orderly shut down of the production supply chain should no further orders be received from the U.S. government," the company said in a press release.
Expect lots of spinmanship on this one. Boeing is offering a glimmer of hope that the program can be saved if Washington comes through with some new orders. At this point, it probably won't happen, but leaving the door open just a crack avoids the wrath of C-17 supporters in Congress. And the company will be needing those folks on other projects down the road. Meanwhile, expect members of the California Congressional delegation to put the blame on the Pentagon and expect the Pentagon to keep its institutional mouth shut until the smoke clears. It was the Air Force that determined last year that the C-17 should be phased out.
There will be much made of the potential loss of 11,000 local jobs, both at Boeing and at L.A.-area subcontractors, but be careful about the hyperbole being dished out today by politicians and business boosters. Remember, the program will be around for another three years - with hefty severance packages likely to follow - and 11,000 jobs, while certainly devastating to those involved, is barely a blip in a county with a workforce of 4 million. Also expect much to be made of this marking the end of plane-building in Southern California - and yes, it's certainly appropriate to make note of the role aerospace has played here for the last century. But come on folks, the end had been in sight for at least 15 years. Between 1982 and 2003, 75,000 aerospace jobs were lost in L.A. County, a 65 percent drop. (This is for a category defined as aerospace product and parts manufacturing.) What's left are high-skilled positions that focus on electronics work. And you see it in the wages: The average aerospace wage in 1982 was $31,000; in 2003 it was $63,000.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.