Boeing informed its key C-17 transport suppliers that it will no longer order parts for the aircraft because of a lack of firm commitment from the U.S. Air Force for future orders.

Workforce reductions -- which one industry source says could eventually impact as many as 30,000 people -- will begin in 2008. The Long Beach, Calif., production line is now expected to remain open to mid-2009.

The Air Force omitted C-17 funding in its fiscal 2008 budget now under review by Congress, yet it included two transports on its unfunded priorities list to Capitol Hill. The shutdown announcement has been expected but still could shock lawmakers and officials into taking action.

Boeing says it needs a significant buy to carry the line; the efficient operating rate had been 15 aircraft per year. "As encouraging as these developments have been, however, in the continued absence of a DOD commitment o procure C-17s in the future, we must today announce our decision not to authorize the start of the next production lot of 15 aircraft," the letter to suppliers says.

Boeing received some international commitments last year when the company also threatened to close the line, also due to a lack of Pentagon commitment - Congress later added aircraft to the budget. Still, those foreign orders are not materializing. Sweden, which is interested in two aircraft, is having internal funding problems. And France and Germany are balking at a unified NATO buy of up to four aircraft.

Meanwhile, upgrades to the C-5 strategic airlifter -- an older sister transport to the C-17 -- are encountering major cost problems. The Air Force may eventually opt to truncate the re-engining of some Lockheed Martin C-5s in favor of more C-17s.

Earlier this week, Deputy Defense Secretary Gordon England said Pentagon planners would re-examine their C-17 requirements in light of President Bush's call to grow the Army and Marine Corps by 92,000. England stressed that the line should be shutdown eventually to redirect funds elsewhere, and that he maintained that with more than 190 C-17s authorized now, the DOD has enough C-17s when coupled with C-5s.