Boeing could cut up to 7,000 jobs by '09

NEW YORK (CNNMoney.com) -- Boeing Friday took the first step towards shutting down production of the C-17 military jet, a move that could cost 7,000 jobs by 2009, due to lack of additional orders for the aircraft.

Boeing (Charts) said that is stopping procurement of parts for any new C-17s not under contract or firmly committed. The aircraft has been the center of federal probes into improper relations between Boeing officials and military officials. Former Air Force acquisition chief Darleen Druyun went to prison for conducting improper employment talks with Boeing while she negotiated the C-17 contract adjustment.

The Boeing C-17 military cargo jet.

"Without further aircraft orders, significant workforce reductions will begin in early 2008 as the production line heads toward complete shutdown in mid-2009," said the company's statement. It said it has 7,000 employees directly involved in building the aircraft and that its supplier base has more than 25,000 people working on making parts for the plane.

The company had considered building a commercial version of the freighter aircraft for the air cargo market. But the U.S. Defense Department has not requested funding for new C-17s in the budget for the fiscal year that starts Oct. 1, and the company said new international interest is significantly less than it was a year ago.