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WASHINGTON D.C. - Leaders in Washington state’s Snohomish County launched a marketing campaign last week touting how it’s “Better With Boeing.”

It includes a website, a hashtag, and custom logos for every city in the county. On the homepage, which is decorated in Boeing’s signature blue, the county declares itself “the best place for continued growth in aerospace and aviation in America.” 

Below that statement is a reference to a “major decision” about the way Boeing will produce its 787 jet in the future.

Dreamliner production is now split between the company’s North Charleston campus and its widebody factory in Everett, Wash., but that division of work could be changing. 

Because of the steep drop in demand for commercial aircraft triggered by the COVID-19 pandemic, the planemaker plans to build just six of the jets per month next year — too few, some analysts say, to afford to maintain two sites — and it’s studying where, how and if it can consolidate the program in one spot. 

It’s that decision that prompted “Better With Boeing” and sparked speculation that the aerospace giant would shut down its 787 operations in Everett, taking many of the 30,000 jobs at the plant with it.

The same level of angst and anxiety hasn’t been playing out in South Carolina.

Richard Aboulafia, an aerospace analyst and vice president with The Teal Group in Fairfax, Va., summed up the conventional wisdom.

“I don’t think there’s any risk of Charleston being closed,” he said. 

Multiple other analysts and industry watchers share that opinion, pointing to the money Boeing would save by concentrating the line in South Carolina.

Logistical considerations also work in North Charleston’s favor. For instance, the 787-10, the largest of the three Dreamliner models, can only be built at the local plant under the current setup because of its size.

Seattle-area aerospace analyst and veteran Boeing watcher Scott Hamilton isn’t so sure. He wrote on his Leeham News website last week that production quality issues at the South Carolina plant have made the case for keeping both factories around, even if it costs the company more in the short-run. 

In the past two weeks, the company has acknowledged identifying several issues with the Dreamliner, including manufacturing errors in the aft-body sections of some planes that prompted the company to pull eight of its Dreamliners from service. The production problems that led to the groundings were traced to the North Charleston plant. 

Quality concerns about the factory off International Boulevard aren’t new. Reports about shoddy production put scrutiny on the plant more than a year ago, and, with the option on the table to consolidate, Boeing leaders may have to answer to those concerns if North Charleston becomes the sole 787 plant.

The study

During an earnings call in July, Boeing CEO David Calhoun said he wouldn’t “jump to the conclusion” that the 787 would be leaving Everett when asked about the future of that site. The question was posed with the assumption that Dreamliner manufacturing would be consolidated in North Charleston, leaving Everett with a two per-month combined rate for the 777/777X and a 747 line that’s closing in 2022.

That would leave massive overhead expenses at the Seattle-area site — by volume it’s the largest building in the world — and very few aircraft being made. 

Calhoun pointed out that the company’s review isn’t based on the configuration that’s best for turning out six Dreamliner jets a month. If six was the number they were solving for, he said, that would “be an easy one, probably.” 

Instead, Calhoun said he’s hopeful demand will recover, bringing the 787 to a monthly rate of 10 or more. If production is shifted to one site, that factory would eventually have to support a substantially higher output than when two plants were building a combined 14 a month. 

That’s assuming demand for the jet recovers to the extent that Boeing hopes. New purchases for widebodies like the Dreamliner are not expected to bounce back quickly because airlines typically deploy them on long-haul international flights, which have been particularly depressed during the pandemic.

“We’re gonna do the best we can,” Calhoun said of the study during the second quarter earnings call on July 29. “I’m not even sure we can pull it off, but, at any rate, we are gonna evaluate it.”

The company declined to comment further on the consolidation study, and it has not said when it will make a decision. 

‘Dollars-and-cents standpoint’

The primary argument for keeping the South Carolina line running is cost, experts say. “From a pure dollars-and-cents standpoint,” consolidating production in North Charleston just makes sense, per Hamilton’s analysis. 

There are also logistical considerations, particularly with the 787-10, commonly referred to as the “Dash 10.”

The longest and newest version of the 787 is built only in North Charleston, and that’s not likely to change: the Dash 10 fuselage sections are too large to fit inside the Dreamlifter, a modified 747 cargo plane that transports parts from a global network of suppliers to the two final assembly plants. 

Moving the 787-10 production to Everett would take money, Aboulafia of the Teal Group said, and Boeing is “just not going to spend money right now.”

Also, all 787 rear fuselage sections are fabricated and assembled in North Charleston, even those installed on the Everett-made planes.

Completed rear and midbody sections for the aircraft are either delivered for final assembly in Everett or moved across the campus for assembly in North Charleston.

Hamilton has pointed out in his analysis that moving those sections from one part of the Boeing South Carolina campus to the other is “a lot cheaper and logistically simpler” than airlifting the parts to the West Coast. 

And Boeing’s South Carolina workforce isn’t unionized, despite several unsuccessful attempts by the International Association of Machinists, making its labor costs cheaper.

In the Puget Sound region where Boeing employees have been represented by a union for decades, labor leaders are gearing up for a showdown over the fate of the Everett factory. Jon Holden, president of IAM District 751, told members recently that there have been no discussions between Boeing and the IAM about the consolidation study, aside from notification.

“In typical Boeing fashion, Boeing is talking to everyone else but the Union,” Holden wrote in his September report to members.

Source: The Post and Courier

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