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Originally published March 2, 2010 at 10:05 PM | Page modified March 3, 2010 at 8:27 AM

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Boeing steps up C-17 pitch to foreign markets

With slowing orders from the Pentagon, Boeing said last week it would cut the C-17 production rate by a third, from 15 aircraft a year to 10, so it could extend the life of the line by several months. It said the move would also buy more time to sell more planes to foreign buyers.

Los Angeles Times

LOS ANGELES — For sale: a mammoth four-engine plane that can haul 60-ton tanks, troops and medical gear across continents and still land on short, shoddy runways.

Price: about $240 million; volume discounts available.

If interested, please contact Boeing at your nearest air show.

That's the sales pitch Boeing officials are making worldwide, in hopes of keeping its sprawling C-17 assembly line in Long Beach, Calif., from closing in two years. The plant, adjacent to Long Beach Airport, employs about 5,000 people and is one of the last remaining aircraft factories in Southern California.

With slowing orders from the Pentagon, Boeing said last week it would cut the C-17 production rate by a third, from 15 aircraft a year to 10, so it could extend the life of the line by several months. It said the move would also buy more time to sell more planes to foreign buyers.

"We have intensified our focus on marketing the C-17 overseas," said Tommy Dunehew, Boeing's vice president for business development. "The slowdown gives us time to work on these deals and make some sales."

One of them — the sale of 10 C-17s to India — could help the line stay open an additional year. In a complicated process, India's purchase request must first pass muster with the State Department and Congress.

India's interest in the C-17 Globemaster, revealed last year, is a potential game changer because it showed there was a robust international market for the plane, analysts said.

"We now have proof that there's substantial interest out there," said Loren Thompson, a defense-policy analyst with the Lexington Institute. "With careful marketing and a little bit of time, the international market for the C-17 could double or triple."

Boeing has sold the aircraft to foreign governments in the past, but mostly to close allies and in small batches.

Britain, Australia, Canada and Qatar have C-17s in their fleets. And workers at the Long Beach plant will fill the United Arab Emirates' order for six planes by 2012.

But because these orders are small — about five planes at a time — they have not been enough to sustain the production line, Boeing said.

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The company has relied on the Air Force to extend its orders every year since 2006. The C-17 program accounts for about 14,000 jobs in California.

New orders, like the one India is proposing, could help shift the program's reliance from the U.S. government.

Foreign customers say they like the four-engine aircraft because it can carry bulky battle gear and use substandard runways. It can take off and land quickly despite its massive size.

The plane has been key in hauling supplies to Iraq and Afghanistan and on humanitarian missions, most recently the Haiti earthquake.

There is an increasing need for aircraft with heavy-lift capabilities, said Tom Captain, principal and vice chairman of Deloitte's aerospace and military practice, which has Boeing as a client.

"These kinds of planes have found a niche and a market that is growing," Captain said. "The foreign market for heavy-lift aircraft has become quite substantial in size."

The C-17, which costs more than other cargo planes, faces stiff competition from smaller and less expensive transports such as Lockheed Martin's C-130J Super Hercules and a A400M being developed by Airbus parent European Aeronautic Defence & Space. But the A400M program has been delayed and has gone billions of dollars over budget.

Boeing hopes to snap up some of that business.

"Sales with foreign customers don't happen overnight," said Dunehew, noting that they can take anywhere from one to five years. "We're hoping that the production slowdown will give us the time to make those sales happen."

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