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Boeing In Talks To Restart C-17 Production

Boeing In Talks To Restart C-17 Production

Yahoo18-06-2025
Two decades after the last example rolled off the production line, Boeing says it's in negotiations with at least one customer to build more C-17 Globemaster III airlifters. The development comes as countries around the world look to boost their armed forces' capabilities, and with no immediate successor to the C-17 waiting in the wings.
Turbo Sjogren, VP and general manager of Boeing Global Services-Government Services, confirmed to Shephard Defense at the Paris Air Show today that 'early infancy' talks were underway with one country, with a view to a potential C-17 production restart.'It is a very extraordinary effort to do,' Sjogren told the same publication, noting that it was 'reflective of the utility of the aircraft.'
He added that interest in new-build C-17s was being expressed by several other countries, too.
None of those countries was named, but TWZ has approached Boeing for more details.
The nations involved may or may not be drawn from the C-17's existing customer base.
As well as the U.S. Air Force, its biggest operator, the C-17 is flown by Australia, Canada, India, Kuwait, Qatar, the United Arab Emirates, and the United Kingdom. Finally, NATO's multinational Strategic Airlift Capability Heavy Airlift Wing also operates C-17s.
One potentially new customer for the C-17 is Japan.
Earlier this year, Japanese Prime Minister Shigeru Ishiba disclosed an interest in buying C-17. Previously, we speculated that any such aircraft for Japan would have to be transferred from the U.S. Air Force or from the inventory of an allied operator. If a new production line were to open, that would change things entirely.
Certainly, a continued demand for the C-17 is understandable among both established operators and potential new customers.
Outside of China and Russia, there is no real equivalent to the C-17, with many countries instead turning to the Airbus A400M or the Embraer C-390 Millennium for their airlift needs, which offer a very different set of capabilities.
The A400M was originally marketed as a gap-filler between the C-130 Hercules at one end and the C-17 at the other. Meanwhile, the C-390 has often been described, in loose terms, as a jet-powered C-130.
The C-17 can transport 100,000 pounds of cargo more than 4,500 nautical miles. It can make high-angle, steep approaches at relatively slow speeds, allowing it to operate into small, austere airfields and onto runways as short as 3,500 feet long and just 90 feet wide. While it has tactical capabilities, it's equally adept as a long-range, heavy-lift strategic transport.
Unlike the A400M, the C-17 can lift everything up to an M1 Abrams main battle tank, so its outsized load-carrying capabilities are impressive and useful.
The A400M, in contrast, is much more of a tactical transport that offers certain strategic capabilities. It can carry 30,000 pounds of cargo over 2,400 nautical miles, and it can also operate from unprepared or semi-prepared strips.
Clearly, the A400M isn't a direct replacement for the C-17, but at the same time, Boeing says it has no planned replacement for the Globemaster III.
But bringing the C-17 back into production, whatever the demand, will not be straightforward.
Back in 2018, we reported on how Boeing had put the Long Beach, California, facilities where it built the C-17 up for sale.
This appeared to bring a definitive end to C-17 production, as well as Boeing's serial manufacture of military aircraft in Southern California. But even at that time, there was a question about whether emerging U.S. Air Force demands might make a restart an attractive idea.
Specifically, the U.S. Air Force was, back then, looking to add three C-17 squadrons as part of a larger push to drastically expand the size of its force and to enhance its ability to move personnel and materiel across the globe. Those plans fell by the wayside, but the C-17 aspiration seemed something of a non-starter at that time.
When it was active, Boeing's Long Beach facility, comprising a nearly four-million-square-foot plot of land adjacent to Long Beach Airport, produced 279 C-17s for the U.S. Air Force and foreign customers.
McDonnell Douglas had developed and first started production of the C-17 at the site in 1991. Boeing bought that firm in 1997, taking over the Globemaster III program and the production facilities in the process.
Though Boeing still provides C-17-related maintenance and other services in Southern California, the production facilities at Long Beach have been idle since the last Globemaster III left the plant in 2015.
Even before that, in 2013, the RAND Corporation conducted a detailed analysis of what it might cost to reboot C-17 production after a multi-year pause. The figure was close to $8 billion to support the production of up to 150 new derivatives with improved fuel efficiency. RAND assumed that Boeing would build those aircraft somewhere else rather than in Long Beach.
We have also reached out to Boeing today to get a better idea of what it would now take to start building C-17s again.
A production restart could perhaps also be aligned with Boeing's Integrated Sustainment Program (GISP), which provides modernization and support to the existing C-17 fleet.
If a new production run proved to be feasible, Boeing would likely look again at an updated configuration, which would be a more capable and efficient subtype. Some of these improvements might also be relevant for upgrades of C-17s built in the original series.
In the longer term, the U.S. Air Force has been eyeing more exotic airlift capabilities, like blended-wing-body (BWB) designs. While there are still many unknowns about the kinds of capabilities and platforms that the service will need in the future, one thing that seems to be central, at least at this stage, is the requirement for a much greater degree of survivability compared to legacy airlift platforms. A revamped C-17 would not deliver on that front.
On the other hand, the requirement to replace the C-5 Galaxy and C-17 fleets is becoming increasingly urgent.
The program to field new U.S. Air Force airlift capabilities is still at an early stage and it's unclear if it will be pursued under the (currently still unofficial) Next-Generation Airlift (NGAL) name, or if it will be reconfigured under the name Next-Generation Airlift System, to better represent that fact that it will involve a family of different platforms and capabilities. Regardless, the service doesn't have much time to stand up and deliver on an entirely new strategic airlifter or family of strategic airlifters.
Absolutely critical to the fate of the U.S. Air Force C-17 fleet is the fact that these vital aircraft are being tasked at a far higher rate than planned. Major contingencies all over the world, from Afghanistan to Ukraine, in particular, have put many extra hours on these airframes. A potential future contingency in the Pacific would see the fleet taxed even harder and possibly over a longer period of time. Some argue that more C-17 capacity is needed just to fight that conflict in the distributed manner the Pentagon wants. On top of this, promising new capabilities are giving C-17s the ability to execute kinetic roles via standoff weapons delivery, which could be a great way to take some pressure off the bomber force. At the same time, the question of where the capacity to actually execute that mission would come from during a time when aerial logistics would be pushed to the max isn't clear. Hence why the call for more C-17s, or something that is similarly capable, is growing louder.
With all this in mind, the U.S. Air Force might well welcome the opportunity to buy additional C-17s, if it can find the funds to do so, even if only as a gap-filler. In fact, depending on the level of foreign interest in new-build C-17s, an order from the Pentagon may well be critical in order to get any production restart off the ground.
At this point, it remains very questionable whether restarting C-17 production is possible, let alone economical.
On the other hand, there's little doubt that customers looking for an airlifter that's able to land on an unimproved airstrip in the middle of nowhere or carry an Abrams main battle tank have very few realistic options at this point in time.
Contact the author: thomas@thewarzone.com
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Loss on divestiture of assets 1.1 - Changes in assets and liabilities: Increase in accounts receivable (44.2 ) (50.4 ) Decrease (increase) in inventories 7.2 (21.8 ) Increase in prepaid expenses and other current assets (19.5 ) (28.2 ) Decrease in accounts payable/accrued liabilities (68.0 ) (17.9 ) Other - net (18.1 ) (6.8 ) Net cash (used for) provided by operating activities (a) (5.2 ) 37.2 Cash flows from investing activities Capital expenditures (b) (41.4 ) (51.6 ) Payments on divestiture of assets (1.1 ) - Net cash used for investing activities (42.5 ) (51.6 ) Cash flows from financing activities Borrowings from senior unsecured credit facilities 160.0 95.0 Repayments of senior unsecured credit facilities (30.0 ) - Redemption of 4.7% senior notes due 2025 (300.0 ) - Proceeds from issuance of 5.875% senior notes due 2035 300.0 - Repurchases of common stock (100.9 ) (201.8 ) Repayment of finance lease obligation and other debt, net (3.9 ) 0.1 Dividends paid (27.5 ) (25.0 ) Activity under stock plans (1.8 ) (4.3 ) Net cash used for financing activities (4.1 ) (136.0 ) Effect of exchange rate changes on cash and cash equivalents 3.6 (1.2 ) Net decrease in cash and cash equivalents (48.2 ) (151.6 ) Cash and cash equivalents at beginning of period 125.4 227.0 Cash and cash equivalents at end of period $ 77.2 $ 75.4 Supplemental data: Free Cash Flow (a)+(b) $ (46.6 ) $ (14.4 ) Accrual basis additions to property, plant and equipment $ 31.8 $ 41.1 Expand Hexcel Corporation and Subsidiaries Net Sales to Third-Party Customers by Market Quarters Ended June 30, 2025 and 2024 Unaudited Table A (In millions) As Reported Constant Currency (a) B/(W) FX B/(W) Market 2025 2024 % Effect (b) 2024 % Commercial Aerospace $ 293.1 $ 320.7 (8.6 ) $ 1.1 $ 321.8 (8.9 ) Defense, Space & Other 196.8 179.7 9.5 3.2 182.9 7.6 Consolidated Total $ 489.9 $ 500.4 (2.1 ) $ 4.3 $ 504.7 (2.9 ) Consolidated % of Net Sales % % % Commercial Aerospace 59.8 64.1 63.8 Defense, Space & Other 40.2 35.9 36.2 Consolidated Total 100.0 100.0 100.0 Six Months Ended June 30, 2025 and 2024 Unaudited (In millions) As Reported Constant Currency (a) B/(W) FX B/(W) Market 2025 2024 % Effect (b) 2024 % Commercial Aerospace $ 573.2 $ 620.0 (7.5 ) $ 0.8 $ 620.8 (7.7 ) Defense, Space & Other 373.2 352.7 5.8 1.9 354.6 5.2 Consolidated Total $ 946.4 $ 972.7 (2.7 ) $ 2.7 $ 975.4 (3.0 ) Consolidated % of Net Sales % % % Commercial Aerospace 60.6 63.7 63.6 Defense, Space & Other 39.4 36.3 36.4 Consolidated Total 100.0 100.0 100.0 Expand (a) To assist in the analysis of the Company's net sales trend, total net sales and sales by market for the quarter and six months ended June 30, 2024 have been estimated using the same U.S. dollar, British pound and Euro exchange rates as applied for the respective periods in 2025 and are referred to as 'constant currency' sales. (b) FX effect is the estimated impact on 'as reported' net sales due to changes in foreign currency exchange rates. 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Expand Unaudited Quarters Ended June 30, 2025 2024 (In millions, except per diluted share data) Net Income EPS Net Income EPS GAAP $ 13.5 $ 0.17 $ 50.0 $ 0.60 Other operating expense, net of tax (a) 24.2 0.30 0.2 - Other income, net of tax (b) (0.7 ) (0.01 ) - - Tax expense (c) 3.4 0.04 - - Non-GAAP $ 40.4 $ 0.50 $ 50.2 $ 0.60 Expand Unaudited Six Months Ended June 30, 2025 2024 (In millions, except per diluted share data) Net Income EPS Net Income EPS GAAP $ 42.4 $ 0.52 $ 86.5 $ 1.03 Other operating expense, net of tax (a) 25.1 0.31 1.1 0.01 Other income, net of tax (b) (0.4 ) - - - Tax expense (c) 3.4 0.04 - - Non-GAAP $ 70.5 $ 0.87 $ 87.6 $ 1.04 Expand Unaudited Six Months Ended June 30 (In millions) 2025 2024 Net cash provided by operating activities $ (5.2 ) $ 37.2 Less: Capital expenditures (41.4 ) (51.6 ) Free cash flow (non-GAAP) $ (46.6 ) $ (14.4 ) Expand (a) The quarter and six months ended June 30, 2025 included restructuring charges of $24.2 million related to the closure of the Welkenraedt facility in Belgium. The six months ended June 30, 2025 also included a loss of $1.1 million for the divestiture of the Hartford, Connecticut business. The quarter and six months ended June 30, 2024 included restructuring costs. (b) The quarter and six months ended June 30, 2025 included a gain of $0.9 million related to a lump-sum pension settlement. The six months ended June 30, 2025 also included debt extinguishment costs. (c) The quarter and six months ended June 30, 2025 included a tax charge of $3.4 million for a valuation allowance related to the closure of the Welkenraedt facility. Expand NOTE: Management believes that adjusted operating income, adjusted net income, adjusted diluted net income per share and free cash flow, which are non-GAAP measures, are meaningful to investors because they provide a view of Hexcel with respect to the underlying operating results excluding special items. Special items represent significant charges or credits that are important to an understanding of Hexcel's overall operating results in the periods presented. Non-GAAP measurements are not recognized in accordance with generally accepted accounting principles and should not be viewed as an alternative to GAAP measures of performance. Expand Hexcel Corporation and Subsidiaries Schedule of Total Debt, Net of Cash Table D Unaudited June 30, December 31, June 30, (In millions) 2025 2024 2024 Current portion finance lease $ - $ 0.1 $ 0.1 Total current debt - 0.1 0.1 Senior unsecured credit facility 130.0 - 95.0 4.7% senior notes due 2025 - 300.0 300.0 3.95% senior notes due 2027 400.0 400.0 400.0 5.875% senior notes due 2035 300.0 - - Senior notes original issue discounts (0.3 ) (0.4 ) (0.5 ) Senior notes deferred financing costs (4.3 ) (0.9 ) (1.2 ) Other debt 2.3 1.9 1.6 Total long-term debt 827.7 700.6 794.9 Total Debt 827.7 700.7 795.0 Less: Cash and cash equivalents (77.2 ) (125.4 ) (75.4 ) Total debt, net of cash $ 750.5 $ 575.3 $ 719.6 Expand

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  • CNBC

The best sector this year is not tech - it's a group of stocks riding Trump's trade deals

Move over, technology stocks. There's a new leading sector in the market. The industrials sector has led the S & P 500 higher this year, climbing more than 16%. After several years when technology companies delivered outsized gains, information technology and communication services have trailed in 2025, with both rising around 12%. The S & P 500 as a whole has risen less than 9% over the same span. XLI .SPX YTD mountain Industrial ETF vs. S & P 500, year to date Industrial companies are benefiting from several tailwinds. First, the economy's continued strength in the face of tariffs bodes well for production and investment. Second, the tariffs are aimed at spurring U.S.-based manufacturing and imposing higher costs on imports. A look under the hood at the industrial leaders also shows how the performance of certain subsectors and specific names has helped the entire group outperform, according to Peter Boockvar, investing chief at One Point BFG Wealth Partners. "It's sort of themed in a way," Boockvar said. "It's not necessarily this broad-based recovery in industrials." Notably, the manufacturing companies that were spun off from General Electric are among those leading the market this year. GE Vernova has surged nearly 90% this year and is the second-best performing stock in the S & P 500. The power turbine's company's exposure to growing electricity demand stemming from artificial intelligence data centers is softening the impact of President Trump's tariff policy. GEV YTD mountain GE Vernova, year to date GE Vernova's gas turbines are in high demand from data center developers and it is a leader in the development of small modular nuclear reactors, an emerging technology that the tech industry is interested in. Power equipment providers are expected to fare well amid the AI buildout, which Trump has championed . That helps explain the strong performances of Johnson Controls International and Quanta Services , both of which traded at all-time highs Thursday. Shares of GE Aerospace , meanwhile, have soared more than 60% on strong demand for new aircraft engines and repairing existing ones. Airbus and Boeing are struggling to keep up with demand for commercial jets, so older planes are running for longer which means high demand for engine replacements and services. Boeing has also rallied this year, surging more than 30%. Trump's trade war might have been expected to create headwinds for the aerospace industry, which has benefited from a tariff-free trade regime for decades. But GE Aerospace CEO Larry Culp said earlier this month that the U.S.-U.K. trade agreement has raised hopes that Trump will spare the industry from tariffs. It's proven a bumpy year for aerospace and defense contractors, many of which tumbled after the president unveiled his tariff plan in April, only to climb to all-time highs as implementation of many proposed levies was delayed.

FAA to review Boeing supply chain before approving hike to 737 MAX production
FAA to review Boeing supply chain before approving hike to 737 MAX production

Yahoo

timean hour ago

  • Yahoo

FAA to review Boeing supply chain before approving hike to 737 MAX production

By David Shepardson OSHKOSH, Wisconsin (Reuters) -The head of the Federal Aviation Administration said Boeing has not yet asked the agency to remove a 38-plane per month cap on 737 MAX production and will review the planemaker's supply chain before making any decision. The FAA imposed the production cap shortly after a January 2024 mid-air emergency involving a new Alaska Airlines 737 MAX 9 missing four key bolts. "We're going to want to look at the entire supply chain," FAA Administrator Bryan Bedford told reporters on the sidelines of an air show, praising Boeing's efforts to improve its culture and adding he would not be surprised if Boeing asks to raise the rate. "I believe it's real, but it's still embryonic," Bedford said of the planemaker's improvements. "We want to see long-term trends, healthy workforce, healthy safety culture. And then we want to see real factory improvements." Boeing did not immediately comment. The FAA in May extended by three years a program that allows Boeing to perform some tasks on the agency's behalf like inspections, saying the planemaker had made improvements. Boeing CEO Kelly Ortberg said in May the planemaker is "pretty confident" that it can increase production of its best-selling 737 MAX jets to 42 a month. Bedford also notes that the FAA is currently considering certifying the smallest and largest MAX variants -- the MAX 7 and MAX 10. Bedford said Boeing realizes getting the job done right the first time "actually is the cheapest way to make the plane.... I think they see real value in changing the culture on the shop floor, getting the defect rates down." But he is not ready to ease oversight. "It's all trending in the right direction. It's all very encouraging, but we're a long ways away from saying we can let our guard down," Bedford said.

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