Boeing Breaks Ground on Second 787 Dreamliner Plant

By: Gregory Polek

November 30, 2009
Air Transport and Cargo

The alacrity with which Boeing assumed control of the former Vought plant in South Carolina this past summer, secured the necessary construction approvals for an adjacent factory and reached a decision on the ultimate location of a second 787 Dreamliner assembly line had already led to skepticism about the company’s commitment to negotiating with its workers based around Washington state’s Puget Sound. Nothing management could say or do after announcing on October 28 that it would locate the new line in north Charleston, S.C., would change that fact.

So the company wasted no time breaking ground on a site directly adjacent to the existing Boeing Charleston plant this month, in time, it hopes, to roll out its first airplane from the new factory in 2012. Indeed, Boeing’s ability to promptly accelerate 787 production will prove vital to a program beset by technical glitches and organizational turmoil since management announced the initial delay to first flight some two and half years ago. Still yet to fly, the 787 nevertheless maintains a backlog of 840 airplanes. Along with getting the airplane in the air and certified by the end of next year, filling those orders–and mitigating the threat of ballooning late-delivery penalties–must now stand as among the program’s top priorities.    

But despite its apparent enthusiasm for employing a nonunion workforce in South Carolina, Boeing insists that the move didn’t signal the start of any exodus from Washington state, but rather an expansion of its existing capacity.

“Some would call this a win for South Carolina and a loss for Washington state,” said Boeing Commercial Airplanes CEO Jim Albaugh. “But there are no winners or losers in this. Our decision to come to South Carolina will be good for our competitiveness, for our customers and for our country. And it will create jobs in both South Carolina and Puget Sound.”

Others, such as the leadership at the IAM, would call it shortsighted adherence to a strategy that has already proved itself a failure. “Boeing’s goal was not an agreement that would keep the work in Washington state,” said IAM general vice president Rich Michalski. “Its goal was to run out the clock on a charade that included blaming their own workers for a decision to establish operations in yet another distant and high-risk environment.”  

Apparently, Boeing’s management calculated that the likelihood of yet another strike in the Puget Sound region outweighed any perceived risk of employing less-experienced workers in South Carolina and the redundancies associated with running duplicate lines nearly a continent apart from each other. In fact, Boeing CEO Jim McNerney unambiguously ranked 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.”

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