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Boeing Wants More Orders

It renews threats to shut down C-17 military cargo plane production.

Boeing (BA) - Get Boeing Company Report took a step toward ending production of its C-17 military cargo plane in an ongoing battle for government funding.

The Chicago-based company said it is stopping procurement of parts for any new C-17s not under contract or firmly committed. The company said layoffs of 7,000 workers on its C-17 line will begin next year if the government doesn't start ordering more planes.

Boeing is on contract with the Air Force for 190 planes but claimed that an unnamed "independent analysis shows a requirement for at least 222 of these aircraft." The company said the Air Force orders and other overseas buyers will keep the production line running through mid-2009, but it warned that it may not be possible to keep the line going beyond then.

"Based on the 34-month lead time necessary to build a C-17," the company said, "Boeing needed a commitment now to avoid a break in production. The Department of Defense did not request funding for new C-17s in the Fiscal Year 2008 budget, released in early February.

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"Consequently, maintaining the C-17 supply base and production line at current production rates will require funding for up to 16 C-17s when Congress finalizes the FY2008 budget."

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