Boeing to Move All 787 Dreamliner Production to South Carolina -- Update
September 29 2020 - 9:16PM
Dow Jones News
By Andrew Tangel and Doug Cameron
Boeing Co. will set plans this week to consolidate 787
Dreamliner assembly in South Carolina, people familiar with the
matter said, ending production of that jetliner in Washington state
as the coronavirus pandemic saps demand for aircraft.
The decision carries significant implications for the
Seattle-area economy and Boeing's unionized workforce around Puget
Sound. It wasn't clear over what period of time the consolidation
would play out, or how many employees might be affected by the
move. Boeing could announce the plans as soon as this week, some of
the people familiar with the matter said.
Boeing said in July that it was studying options to handle a
slowdown in demand for the 787 that has led it to reduce
production. A Boeing spokesman declined to comment late Tuesday on
the study's outcome.
Earlier this year, Boeing said it would slash production of
passenger jets and cut its workforce by about 10%. As the pandemic
worsened in the U.S. and air-travel demand remained deeply
depressed, Boeing said it was weighing cuts beyond the 19,000
already earmarked.
Boeing has assembled the 787 Dreamliner in Everett, Wash., since
the first of the popular widebodies rolled off the line there over
a decade ago. It announced plans in 2009 for a second line in North
Charleston, S.C., a right-to-work state where attempts to unionize
the workforce haven't succeeded.
Earlier this year, production problems at the South Carolina
plant prompted a broader review of quality-control lapses by U.S.
aviation regulators. It isn't clear whether manufacturing issues
played any role in Boeing's study of whether to consolidate
Dreamliner production.
Consolidating Dreamliner production in South Carolina would mark
another step in the shift of the U.S. aerospace industry to
southern states from the West Coast. Companies have already shed
thousands of jobs in California while states including the
Carolinas, Florida and Alabama have attracted aerospace businesses
with less-clogged infrastructure and cheaper, nonunionized labor,
including an Airbus SE assembly plant in Mobile, Ala.
Boeing employs more than 7,000 workers in North Charleston,
where it also has an engine-research facility. That compares with
almost 70,000 staff in Washington, including around 30,000 at the
sprawling Everett plant.
The Everett plant, where Boeing also produces 767s and 747s,
produced around 15 widebody jets a month at its peak, which would
drop to around six and fall further with the 747 program due to end
in 2022 and output of the new 777X reduced as Boeing delayed first
deliveries until 2022.
After boosting Dreamliner production last year to 14 a month --
split evenly between Everett and South Carolina -- Boeing has
reduced output to 10 and plans to make six a month next year.
With the narrow-body 737 MAX grounded for over a year since two
fatal crashes, building and selling more 787s has been crucial to
Boeing's financial recovery. The company has orders for 526 of the
planes and has delivered almost 1,000.
The twin-engine plane overcame years of delays and cost overruns
to become a bestseller and is expected to overtake Boeing's 777 and
the Airbus A330 as the most popular wide body jet by 2023,
according to analysts at Jefferies. Airlines are retiring older
777s and A330s in favor of the smaller 787 and Airbus A350.
Boeing had bet on a buoyant replacement cycle for older jets to
boost 787 sales, only for slowing economic growth and then the
pandemic to derail its plans. It also has shelved plans for a new
midsize plane.
Write to Andrew Tangel at Andrew.Tangel@wsj.com and Doug Cameron
at doug.cameron@wsj.com
(END) Dow Jones Newswires
September 29, 2020 21:01 ET (01:01 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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