Boeing To Place Second 787 Assembly Line in North Charleston, S.C.

 - October 29, 2009, 5:04 AM

Boeing announced yesterday that it will place its second final assembly line for the 787 Dreamliner in North Charleston, S.C., ending months of speculation over how and when the company’s standoff with the International Association of Machinists would end. Along with serving as a location for final assembly of 787 Dreamliners, the facility also will have the capability to support the testing and delivery of the airplanes.

Boeing said it evaluated criteria designed to find the final assembly location within the company that would best support the 787 business plan as the program increases production rates. More plainly, it failed to reach what it considered acceptable terms with its workers in the Puget Sound region to mitigate the chances of another strike.

During a conference call earlier this month, Boeing CEO Jim McNerney unambiguously blamed the problems Boeing has encountered during negotiations with the IAM over the years as perhaps the top reason it seriously considered North Charleston as the site of its next line. “The union and company have had trouble figuring it out between themselves over the last few contract discussions, and I’ve got to figure out a way to reduce that risk to the company,” he said. “So some of the modest inefficiencies associated with the move to Charleston are certainly more than overcome by strikes happening every three or four years in Puget Sound.”

The Boeing chief executive expressed frustration with “the very negative financial impact to the company” caused by such strikes, particularly the eight-week walkout of 27,000 machinists that effectively halted production at BCA last fall. “Our balance sheet would be a lot stronger today had we not had a strike last year,” he said. “Our customers would be a lot happier today had we not had a strike last year, and the 787 program would be in better shape had we not.”

In a statement issued yesterday, Boeing Commercial Airplanes CEO Jim Albaugh talked of building on “synergies established in South Carolina with Boeing Charleston and Global Aeronautica,” adding that the move would strengthen the company’s competitiveness and “sustainability” and help it grow for the long-term.

Boeing Charleston, formerly a Vought Aircraft Industries facility, performs fabrication, assembly and systems installation for the 787 aft fuselage sections. Across the street, Global Aeronautica, of which Boeing owns 50 percent, holds responsibility for joining and integrating 787 fuselage sections from other structural partners.

Until the second 787 assembly line in North Charleston begins running, Boeing will establish transitional surge capacity in Everett, Wash., to ensure the successful introduction of the 787-9, the first derivative model of the 787. It then plans to gradually remove that capacity as the second line in Charleston starts operating.
“We're taking prudent steps to protect the interests of our customers as we introduce the 787-9 and ramp up overall production to 10 twin-aisle 787 jets per month,” said Albaugh.

“While we welcome the development of this expanded capability at Boeing Charleston, the Puget Sound region is the headquarters of Boeing Commercial Airplanes. Everett will continue to design and produce airplanes, including the 787, and there is tremendous opportunity for our current and future products here,” Albaugh stressed. “We remain committed to Puget Sound.”