Boeing announced late yesterday that it will build an assembly line for the 787 Dreamliner in South Carolina. This will be a remarkable transition for Boeing who has always assembled its planes in Seattle, WA. Boeing bought the North Charleston facility in July last year and will combine this site with the one in Seattle to assemble, construct and also test airplanes. Said Jim Albaugh, CEO of Boeing Commercial airplane, “Establishing a second 787 assembly line in Charleston will expand our production capability to meet the market demand for the airplane. We’re taking prudent steps to protect the interests of our customers.”
The new assembly line in Charleston will aid Boeing recover from the persistent delays that have set the Dreamliner back by at least two years. Boeing picked South Carolina because of its troubling union demands and failing to accomplish a non strike deal with its Seattle based workers. In the past 20 years, the union in Seattle has shut down Boeing offices four times including a prolonged two month strike in 2008.
Said Tom Wroblewski, president of Machinists local 751, “Boeing has betrayed our loyalty. The union offered Boeing a 10-year labor agreement and floated ideas on health-care costs, wages and pensions.” he went on to add, “Most of the time, they didn’t even take notes. It’s now clear that Boeing was only using our talks as a smoke screen, and as a bargaining chip to extort a bigger tax handout from South Carolina.”
The turning event was the union’s stipulation that Boeing not converse with employees if the union attempted to sort out in North Charleston, said Yvonne Leach, a Boeing spokeswoman in Everett, Washington. “We would be giving up the right to address our employees, and that wasn’t something we were willing to give up.” Unlike Washington, in South Carolina one does not have to be union member to work for any company.
Boeing plans to initiate assembling soon and hopes to add several thousand new employees in South Carolina.
The 787’s rear fuselage is already made in North Charleston, where Vought Aircraft Industries had a deal to transport parts and manufactured sections to Boeing for ultimate assemblage in Everett, WA.
South Carolina’s legislature agreed to an incentives wrap up yesterday that that would make available basic organization facilities, large machinery, training services and tax breaks. While Boeing has not directly been named a beneficiary of this package deal; it is more than likely that they will benefit from most of the incentives proposed. Of course the Governor of South Carolina, Mark Sanford, is delighted. On the other hand, Washington Governor, Chris Gregoire, called it a disappointing day for the state.
Boeing remains the world’s largest commercial plane maker, trailing the French Airbus SAS by a small margin. While many orders of the Dreamliner have come, the construction of the new plane has been beset by many delays and part shortages. When the plane will be ready to fly is still unknown.
Boeing rose 4 cents to $47.26 at 6:40 p.m. after the regular close of New York Stock Exchange trading.