Everett loses out on second Boeing 787 assembly line

The Boeing Co. picked Charleston, S.C., over Everett for the site of its second 787 assembly line, the company announced Wednesday.

“This decision allows us to continue building on the synergies we have established in South Carolina with Boeing Charleston and Global Aeronautica,” said Jim Albaugh, president and CEO of Boeing Commercial Airplanes.

Boeing and Machinists union leaders here had been in talks over the second line. Boeing CEO Jim McNerney said last week that the company can’t afford frequent labor strikes by the Machinists’ union. The Machinists went on strike last year for 57 days.

“Boeing’s goal was not an agreement that would keep the work in Washington state,” said IAM Vice President Rich Michalski. “Their 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.”

Until the second 787 assembly line is brought on line in North Charleston, the company said it will establish transitional surge capability at its Everett location to ensure the successful introduction of the 787-9, the first derivative model of the 787. When the second line in Charleston is up and operating, the surge capability in Everett will be phased out.

“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,” Albaugh said.

South Carolina called a special legislative session this week to pass tax incentives in its attempt to land Boeing. However, industry observers say South Carolina’s low union presence, more than its tax breaks, attracted the aerospace giant.

Boeing’s Charleston workers perform fabrication, assembly and systems installation for the 787 aft fuselage sections. Across the street, Global Aeronautica, which is 50 percent owned by Boeing, is responsible for joining and integrating 787 fuselage sections from other structural partners.

Boeing workers in South Carolina voted out the Machinists union last month. The company bought out 787 partner Vought Aircraft Industries’ facility in Charleston earlier this year to gain more control over its supply chain. Supplier and production troubles, mostly blamed on Boeing’s extensive outsourcing, have led to more than two years of delays in the 787 program.

Local analyst Scott Hamilton, with Leeham Co., believes that Everett was the most logical choice for Boeing’s second line, given the company’s large workforce and ready infrastructure here.

But, he noted in a post on the Leeham site that Boeing’s CEO Jim McNerney is “so pissed” with the Machinists for labor strikes that he picked Charleston instead.

Many analysts and politicians believe Boeing’s move could be the beginning of dwindling presence in the state.

Snohomish County executive Aaron Reardon predicted last week that a loss of the second line would mean a decline of aerospace in the state. On Wednesday, Reardon issued this statement just hours before Boeing’s decision was announced:

“In the event a successful conclusion cannot be reached, we must all recognize that the Boeing Company and the IAM will maintain a strong presence in the Puget Sound and throughout our state. To go forward, we all must understand why these two parties could not reach an agreement so that we may all play a role in rebuilding this relationship and making Washington state the most competitive state in the union.”

Several Washington lawmakers had urged Boeing and the Machinists to return to talks on Wednesday. Rep. Jay Inslee, D-Wash., suggested that both sides have an obligation to the community to keep talking.

“It is my belief that both parties have an obligation to the community at large to leave no stone unturned in this regard,” Inslee wrote in a letter to Boeing’s Tim Keating and the Machinists’ Rich Michalski.

Reacting to the news Wednesday, Rep. Rick Larsen mentioned the state’s effort to keep Boeing’s 787 second line in Washington.

““It is now clear, if it wasn’t before, that there weren’t enough training facilities we could build, or a large enough B&O tax break we could give, to keep Boeing from moving their second line to South Carolina. The labor-management divide was just too wide to bridge,” Larsen said in a statement.

Local Machinist leaders issued this statement late Tuesday, when talks were rumored to have ended.

“We would all be better off if Boeing made the rational decision, with the least amount of risk and best chance of success by simply continuing to work with us.”