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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era

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To: Freedom Fighter who wrote (1505)	4/2/1999 3:01:00 PM
From: porcupine --''''>	Read Replies (1) of 1722

Boeing C-17's on Sale Now for 15% Off --!!!!:> "Boeing Offers Cargo-Plane Discount" Filed at 2:38 p.m. EST By The Associated Press WASHINGTON (AP) -- Boeing has offered to cut the price of its C-17 transport plane by 15 percent if the Air Force agrees to buy 60 more of the cargo planes during the first decade of the 21st Century. Stu Thomson, Boeing's vice president for business development, told reporters Thursday the aerospace company made an unsolicited offer this week to provide 60 additional C-17s between 2003 and 2007 at an average cost of $149 million each. That's 15 percent less than the expected cost of the last of 120 of the cargo planes already ordered by the Air Force through 2003, Thomson said, and $100 million a plane below the estimated cost in 1993 when it was being developed. Air Force spokeswoman Gloria Cales said Boeing's offer was being evaluated. She said the Air Force is conducting a study to determine its long-range air lift needs and how best to meet them. Thomson said Boeing made the offer now because it wants to have its best price on the table as the Air Force conducts that study. He said Boeing also wants to be able to continue production of the C-17 without interruption should the Air Force decide it needs more than the 120 C-17s now on order. About 9,000 workers nationwide help produce the C-17, with major operations in Long Beach, Calif.; Macon, Ga.; and St. Louis. The C-17 program has suppliers or subcontractors in 43 states. The Air Force earlier this year awarded Lockheed Martin a $120 million contract to update the avionics on the 120 C-5 cargo planes still in the Air Force inventory. Lockheed Martin currently is developing a proposal to replace the engines and upgrade the propulsions systems on the C-5s. Thomson refused to speculate on whether the Air Force would need to modernize the C-5 fleet if it decided to accept Boeing's offer of another 60 C-17s at a reduced price. ''It's up to the Air Force to determine the mix,'' he said. The C-17 program came close to being canceled by the Air Force in the early 1990s because of cost overruns and questions about performance. But reforms demanded by the Pentagon and put into place by the company has turned the program around. Thomson said the last 35 C-17s delivered to the Air Force have been on time or ahead of schedule, while the per-plane cost has declined steadily in response to engineering changes and acquisition reforms. In addition, he said the plane has proven its versatility and reliability in recent U.S. operations, including ferrying troops and supplies to Bosnia in 1995 and 1996 in support of Operation Joint Endeavor peacekeeping forces.

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