BILL ANALYSIS
SJR 29
Page 1
Date of Hearing: June 22, 2010
ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT AND THE ECONOMY
V. Manuel Perez, Chair
SJR 29 (Wright) - As Introduced: April 15, 2010
SENATE VOTE : 31-0
SUBJECT : Economic development and production of the C-17
transport aircraft.
SUMMARY : Urges the President of the United States, the U.S.
Congress, and the Department of Defense to take immediate and
necessary actions to protect national security by ensuring the
continuation of C-17 production to meet future domestic and
international airlift needs and to preserve the crown jewel of
the American industrial base. Specifically, this resolution
declares :
1)Effective military, global and humanitarian missions require
that the U. S. military be able to maintain and have access to
21st century airlifters that are prepared to respond at a
moment's notice anywhere in the world to any and all needs.
2)That anticipating the need for additional proven and highly
capable airlifters, extending C-17 production is in the best
interest of the American people.
3)The C-5 retirement restrictions in the National Defense
Authorization Act for FY 2010 hinder the Air Force's latitude
to more effectively manage its strategic airlift fleet.
4)The C-17 fleet is one of the U.S. military's most successful
acquisition programs with an outstanding record of on-budget
and ahead-of-schedule deliveries to the Air Force.
5)The increased activities the U.S. military presence worldwide
has made the C-17 the preeminent airlifter for the efficient
deployment of troops and cargo to locations around the world.
6)The humanitarian aid offered in the wake of the 9/11 terrorist
attack, Hurricanes Katrina and Rita, the Asian tsunami, the
Pakistan earthquake, the Chinese earthquake, the Myanmar
cyclone, and the Haiti earthquake has been supported by the
C-17's ability to rapidly transport critical supplies and
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equipment to victims of natural disasters.
7)That without a commitment to extend aircraft production, the
C-17's supply base will start to disappear in 2011 and the
production line in Long Beach will close in the summer of
2012.
8)That the C-17 has provided work for over 650 suppliers in 44
states, resulting in $5.8 billion being added annually to the
nation's economy. For California, a shutdown of the
production line would have an impact on 13,857 jobs, 384
suppliers, and a statewide economic impact of $2 billion
annually; and
9)That despite its record of success and proven reliability for
the US military, the C-17 is caught in the middle of
Washington, D.C.'s complex budgetary process with the future
of the aircraft, over 30,000 American jobs, and the industrial
base it supports is in jeopardy.
FISCAL EFFECT : None
COMMENTS :
1)Author's purpose: According to the author, the C-17 is the
last aircraft built in California and the production plant is
the largest private employer in the community of Long Beach.
There is a continued decline of manufacturing and aerospace in
California, where 50 percent of the aerospace employment base
has been lost since 1990. The C-17 plant is an award-winning
facility with a world-class workforce that has been and
continues to be a major part of the Long Beach community.
The Long Beach aircraft plant has been part of the Southern
California landscape for more than 60 years; more than 15,000
aircraft have been produced there for both commercial and
military customers. In order to keep the line going, Boeing
has begun taking steps to reduce the production rate from 15
to 10 aircraft per year and is using company funding for
long-lead procurement. Keeping the plant open is critical not
only for the Los Angeles area economy but for the state as a
whole. At a time when unemployment in the state is at a
staggering 13 percent, California cannot afford to lose an
aircraft manufacturing plant that employs thousands of people
directly, sustains an extensive supplier base and contributes
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billions to the state's economy each year. The optimal future
for the program is sustaining orders from the U.S. Air Force,
combined with international orders. The best future for this
facility is with continued C-17 production.
2)Historical Background: The C-17 large-body aircraft is
nicknamed the Globemaster III and has been in production for
nearly two decades. The Long Beach Boeing aircraft plant
employs and supports nearly 13,857 workers and 384 business
suppliers, and according to the Long Beach Economic
Development Center, the plant has a statewide economic impact
of $2 billion annually. Boeing supports a regional supply
line; currently about 15% of the company's employees are Long
Beach residents and the rest of their employees come from
other areas of the Los Angeles region.
The Boeing plant is California's last major aircraft
production facility. In early 2008, Boeing delivered the last
of its model 717 aircraft, and the C-17 is the only plane
remaining in large- scale production at the Long Beach
facility, as well as in the state.
The C-17 is considered to be a very reliable and cost
effective aircraft that serves as the workhorse of the U.S.
Air Force fleet. The C-17 has been at the forefront of the
U.S. military and humanitarian missions in all parts of the
world and is the primary aircraft providing aero-medical
evacuations for wounded soldiers from the battlefields in the
Middle East to hospitals throughout Europe and the U.S.
In an effort to retain Boeing's production activity in Long
Beach, and thereby maintain the state's role as a major
location for aircraft and aerospace manufacturing, California
has included the area around the Boeing plant as one of the
state's 42 Enterprise Zones (EZs). EZ designation allows
businesses that locate within the EZ's boundaries to claim
certain economic benefits including sales and use tax credits,
certain kinds of business equipment expense deductions,
carryover of net operating losses, and perhaps most
significant in the case of Long Beach are enhanced hiring
credits for eligible employees.
In 2008, Boeing announced that it would keep its C-17
production line open beyond the August 2009 delivery of the
last ordered aircraft. The company stated that it would
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invest its own money to keep the line open until 2010, with
the hope of securing more orders from the U.S. Air Force and
foreign nations. This decision by Boeing, according to
analysts, reflects growing bipartisan congressional support
and increasing signs that the U.S. Air Force has requirements
for additional C-17s. In 2009, Boeing was able to secure
budget approval for 30 additional C-17s, allowing them to
remain open until 2012. Currently the company is working to
secure approval from the federal government for continued
commitments for C-17 orders from the U.S. Military.
3)Related Legislation: In 2008, the Assembly and Senate
approved AJR 32 (Karnette), which also memorialized
California's support for the production of the C-17 transport
and pledged the state's ongoing efforts to secure commitments
from the President and Congress.
REGISTERED SUPPORT / OPPOSITION :
Support
The Boeing Company (Sponsor)
California Chamber of Commerce
California Manufacturers and Technology Association
California Space Authority
Opposition
None on file
Analysis Prepared by : Toni Symonds/Mercedes Flores / J., E.D.
& E. / (916) 319-2090