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The Post and Courier
Thursday, October 29, 2009
North Charleston won the fiercely fought battle for a Boeing 787
aircraft assembly plant Wednesday, thrusting South Carolina onto the
world stage of aircraft manufacturing.
The Boeing Co. will build the new line at its Charleston
International Airport property instead of in Everett, Wash., the
nation's aviation nerve center and longtime home of the company's
commercial airplane business.
The decision was announced after state lawmakers wrapped up a
two-day special session in which they approved a rich basket of
financial incentives for Boeing valued at $450 million by state Sen.
Hugh Leatherman, a Florence Republican who heads the Senate Finance
Committee.
The aerospace giant would have to create at least 3,800 jobs and
invest more than $750 million within seven years to take advantage of
the various inducements.
Tim Coyle, vice president of Boeing Charleston, said the company
plans to break ground on the 584,000-square-foot expansion near its
existing factory within the next few weeks. Work on the first locally
made 787 Dreamliner is expected to begin in 2011.
More Boeing stories
See a special section with all of The Post and Courier's coverage of Boeing's historic decision to move to Charleston.
Boeing had said previously that its stormy relationship with the
International Association of Machinists was a key factor in its
decision to look beyond its highly unionized operation in Washington
state. Last year, the union staged a damaging eight-week strike in the
Seattle area that compounded the delays that have been dogging the 787
program for two years.
The company began taking a hard look at building the second line for
its newest jet in North Charleston in August, meaning that the
Dreamliner plant went from a dream to a reality in less than three
months, said Senate President Pro Tem Glenn McConnell, R-Charleston.
It wasn't South Carolina's low unionization rate, the incentive deal
or any other single factor that sold Boeing, McConnell and Leatherman
said. Coyle agreed, saying Boeing considered the business environment,
logistics and the infrastructure in North Charleston and Everett.
Photo Gallery
Boeing Plant - North Charleston
The
Boeing Co. has announced that North Charleston will be home to a new
787 Dreamliner assembly plant, ending a hard-fought contest for the
facility that could have instead landed it in Everett, Wash. Boeing
announced that it will add to its existing facility at Charleston
International Airport where fuselage sections for the Dreamliner are
currently constructed.
"Being able to deliver on schedule, the company decided two sites were better than one," Coyle said.
Leatherman said he expects the company to exceed its job and capital investment projections, not fall short.
Gov. Mark Sanford said he will sign the incentive legislation.
The deal comes at a time when unemployment is near a record high in
South Carolina, with manufacturing particularly hit hard by the
recession.
Boeing also could give a big kick to a small but promising industry
for South Carolina, with many officials likening the prize to the BMW
car plant that opened in the Upstate 15 years ago.
"Just as the similarly monumental BMW investment catalyzed a now
extensive automotive presence across South Carolina more than 15 years
ago, we believe Boeing landing decisively in North Charleston will spur
on an already growing aerospace hub in our state," Sanford said in a
statement.
North Charleston Mayor Keith Summey called the Boeing deal wonderful.
"It's the reversal of the shipyard closing," Summey said, referring
to the gradual shutdown of the Charleston Naval Base and Shipyard in
the 1990s.
Doug Woodward, director of research and an economics professor at
the University of South Carolina's Moore School of Business, said the
Boeing expansion will have a huge impact on the state by raising its
global profile.
"Boeing is one of those rarefied companies which everyone knows and
recognizes as a leader in the field, and to have that in South Carolina
is an intangible benefit aside from jobs and income generated,"
Woodward said. "It will help sell our state to other companies ... and
I think it will put Charleston on a lot of people's lists of the
hottest places to be in 2010."
The launch of the cutting-edge 787 -- Boeing's first new jet in more
than a decade -- is being closely watched within the aviation world.
Unlike most large commercial airplanes, which are made from aluminum,
about half of the Dreamliner's structural components are a mix of
epoxies and strong, lightweight composite materials such as graphite
and carbon, in order to cut fuel consumption.
Also, the major sections of the plane are being made by suppliers
around the world and then flown to the Seattle area on giant cargo jets
for final assembly. When the new line opens, some of those parts will
be put together off International Boulevard.
Boeing needs a second production line for its long-delayed but
fast-selling Dreamliner jet to ensure production gets back on track and
to minimize penalties incurred from late deliveries.
After six delays in two years, the first test flight for the
lightweight, all-composite jet is expected before the end of 2009. The
first deliveries are expected in late 2010.
To date, 55 airlines have placed orders for 840 of the wide-body
aircraft totaling $140 billion, "making this the most successful launch
of a new commercial airplane in Boeing's history," according to the
company.
One reason Washington state did not win the line was an impasse
between Boeing and the machinists union, which represents thousands of
the manufacturer's production workers in Everett. As the company
evaluated where to build a second new production line, it sought a
10-year no-strike guarantee from the union. But those talks collapsed
and efforts to revive them Wednesday were too late.
Production workers at Boeing's local plant recently severed their
ties with the union, which likely tilted the 787 line in South
Carolina's favor.
Boeing already makes rear fuselages for the Dreamliner in North
Charleston, a factory it acquired over the summer from Vought Aircraft
Industries Inc. in a deal valued at $1 billion. Boeing also owns half
of a neighboring 787 supplier, Global Aeronautica, that works on
mid-fuselage sections.
"Establishing a second 787 assembly line in Charleston will expand
our production capability to meet the market demand for the airplane,"
said Jim Albaugh, president and chief executive officer of Boeing
Commercial Airplanes. "This decision allows us to continue building on
the synergies we have established in South Carolina with Boeing
Charleston and Global Aeronautica."
The idea of losing the 787 line to South Carolina triggered panic in
the Seattle area, where officials are still stinging from Boeing's
decision to move its corporate headquarters to Chicago in 2001. The
concern in the Pacific Northwest now is that the company will be more
likely to move more manufacturing jobs beyond Washington as it develops
new planes or replaces existing jets.
South Carolina Rep. Chip Limehouse, R-Charleston, vowed Wednesday that will be ready when that time comes.
"There will be potential for other aircraft to be built here." Limehouse said.
Allyson Bird, Glenn Smith and Warren Wise contributed to this report. Reach John McDermott at 937-5572 or jmcdermott@postandcourier.com. Reach Yvonne Wenger at ywenger@postandcourier.com.
