Wednesday, July 30, 2014

Boeing to build 787-10 exclusively in North Charleston

 Boeing Co. soon will assemble all three versions of the 787 Dreamliner at its non-unionized plant in North Charleston.

The Chicago-based aerospace giant said Wednesday it will produce the 787-10 - the largest version of the popular, back-ordered commercial jetliner - exclusively at its factory beside Charleston International Airport.

The expansion won't result in any new jobs or new buildings, a company official said. But at least one aviation analyst says the airplane manufacturer will have to boost its work force to meet increased production goals while introducing a new line.

The 787-10 is the longest of the twin-aisle Dreamliner family, and the announcement of its construction here has been expected for months.

It also means Boeing will be producing a full line of one commercial jetliner for the first time away from a unionized plant.

Design of the 787-10 is underway in Everett, Wash., with final assembly of the first 787-10 scheduled to begin in South Carolina in 2017.

"We looked at all our options and found the most efficient and effective solution is to build the 787-10 at Boeing South Carolina," said Larry Loftis, vice president and general manager of the 787 program for Boeing Commercial Airplanes.

"This will allow us to balance 787 production across the North Charleston and Everett sites as we increase production rates," he said. "We're happy with our growth and success in South Carolina, and the continued success at both sites gives us confidence in our plan going forward."

Boeing will continue to assemble both 787-8s and 787-9s in Everett and North Charleston. The North Charleston site currently fully assembles the 787-8 at a rate of three a month and will begin full assembly of the larger 787-9 in the fall.

Currently, the rear fuselage sections for all Dreamliners are produced in North Charleston, and midbodies, or center fuselage sections, are integrated from parts made elsewhere. Those parts are flown to Washington state for assembly into the 787-8 and 787-9. Everett produces seven Dreamliners a month.
Midbody decision

The 787-10 will be 18 feet longer than the 787-9 and carry 323 passengers, 33 percent more than the 787-8 and 15 percent more than the 787-9.

Because 10 feet of the 787-10's increase is in the midbody fuselage section, the 787-10 midbody is too long to be transported efficiently from North Charleston to the Everett facility for final assembly, Loftis said.

Aviation analysts for months have been saying the increased size of the 787-10 would not allow it to be transported to Everett, and North Charleston would be selected for full production.

"It wasn't really that big a surprise that Charleston would get the nod for the 787-10," said Saj Ahmad, an aviation analyst with StrategicAero Research. "The center section is simply too long to transport cost-effectively to the Puget Sound factory, and given the heavy capital investment at its South Carolina plant, it always made commercial sense to keep the 787-10 in the Lowcountry."

Because of decreased unfinished parts being flown to Everett from North Charleston in recent months and a concerted effort by Boeing to drive down production costs, Ahmad said the company's announcement means it believes in the South Carolina plant.

"Charleston's continuous (improvement in its) learning curve gives Boeing confidence that South Carolina has the experience and backing to tackle and deliver the 787-10 on time in 2018," he said. "If the 787-10 should encounter any angst, you can pretty much bet your buck that Boeing will pull out all the stops again to ensure that disruption, if any, is minimized."

Boeing has 7,500 employees at its North Charleston operation, including hundreds of contract workers brought in earlier this year.


Boeing recently leased nearly 500 additional acres between International Boulevard and Dorchester Road from the state to expand operations, but Loftis said adding the new line will not mean any new jobs or expansion of current buildings in North Charleston.

"I don't see any significant increase in jobs," Loftis said. "The higher rates will be driving manufacturing productivity. It's great news because it means we can stay competitive in the marketplace."

He also said the recent building expansions in North Charleston can handle the capacity. "There is nothing new on the horizon," Loftis said.

Boeing has started ground work on the site for the new paint facility, where all 787s will be painted in customers' logos, including the 787-10 when it rolls off the assembly line in 2018.

But Ahmad said Boeing will have no choice but to boost its labor force in North Charleston at some point.

"The challenge is increasing productivity with the existing work pool, which I doubt can be sustained without more workers," he said.

To fill more than 1,000 787 orders and the possibility of future commitments, Ahmad said, "Boeing will at some point have to add more employees to manage that workload."

The 787 production rate will increase to 12 airplanes per month in 2016 and 14 per month by the end of the decade.

The Everett facility will continue to assemble seven airplanes per month, while Boeing South Carolina final assembly will gradually increase from three 787s per month today to five per month in 2016 and seven per month by the end of the decade.

More than 165 Dreamliners have been delivered to 21 customers around the globe. Since its launch in June 2013, the 787-10 has won 132 orders from six global customers.

'Terrific vote of confidence'

Gov. Nikki Haley, who privately toured the North Charleston factory Monday, called Boeing's announcement "huge" for South Carolina.

"That Boeing is committing the future of the Dreamliner to our state - the first place ever outside of Washington state that Boeing has built a commercial airplane - lets the whole world know that South Carolina workers are the best around. The success that Boeing South Carolina has become in less than five years is a testament to the Boeing leadership and, above all, the Boeing employees whose talent and dedication make all of us so proud."

U.S. Sen. Lindsey Graham called the announcement "a terrific vote of confidence in the South Carolina work force."

"It will solidify Boeing's position in South Carolina and continue to draw suppliers to South Carolina, which will create more jobs," Graham, R-S.C., said.

U.S. Sen. Tim Scott, R-S.C., called Boeing's decision "a testament to our role in leading the nation's manufacturing renaissance. Their decision speaks to how South Carolina is bringing together our state's skilled work force and advanced American-based manufacturing. This combination is creating good-paying jobs and contributing to our growing economy."

More funds to train?

To help educate workers for the burgeoning aerospace industry in the Lowcountry, Trident Technical College hopes to build a $79 million aeronautical training center on its North Charleston campus.

"The expansion announcement highlights the urgency of moving forward with our plans," Trident Tech President Mary Thornley said. "This is part of the future we are training students to be ready for. The future is now."

The school has raised nearly $38 million so far for the center from state and local governments as well as TTC.

S.C. Rep. Chip Limehouse, a member of the budget-writing House Ways and Means Committee which helped commit $10 million toward the center earlier this year, said Boeing's decision to produce the new Dreamliner in North Charleston will bolster the school's fundraising campaign.

"We want South Carolinians to take the jobs that are being created," he said.

Union activity

The International Association of Machinists & Aerospace Workers union, which is trying to organize the North Charleston factory, said Boeing's decision may help its efforts.

"Stepped-up production may bring increased interest to unionization," union spokesman Frank Larkin said. "Forced overtime is already a hot issue among Boeing employees in South Carolina."

The union is still in the card-collecting stage of getting enough workers to sign up before a vote can be taken, but Larkin said interest is increasing.

In Seattle, local union President Jon Holden told The Seattle Times, "While we are not surprised, we are certainly disappointed to see Boeing make this decision."

The newspaper's take on the announcement: "It makes clearer the profound impact of Boeing's 2009 decision to bypass its unionized stronghold in Washington state in favor of building a second 787 assembly line in non-union South Carolina: Dreamliner final assembly will in six years be equally divided between the East and West Coast sites."

Boeing South Carolina workers hailed the announcement as a good omen for the plant.

Contract worker Augustine Greene said it's more convenient for the company to build the 787-10 Dreamliner in North Charleston than in Washington state, in part due to the massive size of the plane.

"It's an advantage for not just the city, but the state," he said. "For the residents, it'll bring more employment and more work."

Another worker who asked not to be identified said, "I'm not sure how it would impact the production rate around here, or whether we'd have to expand, but it's good news for us."

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