Campaigning for the C-17

Long Beach Officials Look for Ways to Lower Boeing's Costs, Hang On to Jobs

The C-17, a big-bellied Air Force jet that carries troops and cargo to global hot spots, is designed to navigate short, unpaved airstrips with ease. But navigating the next round of defense budget tightening could be much tougher.

The 2006 defense budget Congress passed last week included $3.5 billion for C-17s , but there are also reports that budget-sensitive Pentagon officials have decided they cannot afford to buy any more of the $200 million planes.

That uncertainty is creating angst in Long Beach, Calif., where Boeing Co. is the largest employer and 5,000 workers churn out 15 of the planes a year. To the usual lobbying campaign to preserve the jet and the jobs, community leaders have added a wrinkle: They are looking for ways to save the government money.

"We're looking at all of Boeing's costs to see how we can lower them," said Robert M. Swayze, the city's economic development bureau manager.

Southern California Edison, Long Beach's utility company, said Boeing may be eligible for a five-year, 15 percent discount on its energy bill . The city also is lobbying to have its designation as an enterprise zone extended beyond the 2007 expiration date, potentially saving Boeing more.

Even the fire department is willing to help. "Right now Boeing operates its own fire department," but the city could assume that responsibility, Swayze said .

Michael E. O'Hanlon, a senior fellow at the Brookings Institution, said Long Beach's approach is unusual. "You usually only see these types of heroics involved when a baseball stadium is at stake," he said.

Typically, members of Congress have led efforts to keep production lines open. In the past two budgets, for example, Sen. Christopher S. Bond (R-Mo.), has secured enough funds to keep the Boeing plant in St. Louis making F-15 fighter jets through at least 2008, over the objections of the Air Force.

California lawmakers, including Rep. Juanita Millender-McDonald (D), who represents Long Beach, have sent letters to Defense Secretary Donald H. Rumsfeld and Air Force Secretary Michael W. Wynne arguing the C-17's virtues. A Pentagon study to be released early next year concludes that 180 planes is enough, according to military and industry sources. Boeing said that if money is not put into the 2007 budget for the plane, it would be forced to begin shutting down the line in 2008.

"The Air Force has come to conclusion that it has other priorities," such as fighter jets, said Loren B. Thompson, a defense industry consultant and analyst for the Lexington Institute, a think tank. "It's going to take a determined delegation to save the program."

Chicago-based Boeing is privately making its own appeal to military leaders on behalf of the C-17. But it must perform a tricky balancing act. If the Air Force buys more C-17s, it may come at the expense of a program Boeing has been eagerly awaiting -- building hundreds of refueling tankers, industry analysts note. Or if the company convinces the Air Force it needs more planes to shuttle troops and equipment, the Air Force could decide to spend the money upgrading C-5 cargo planes made by Lockheed Martin Corp., instead of buying more of Boeing's planes.

"That is part of why you see somewhat restrained [company] lobbying efforts," O'Hanlon said.