States scramble for slice of Boeing's business

Boeing's billion-dollar plan to buy the South Carolina manufacturing plant of Vought Aircraft Industries was a much-needed, defensive move to rescue Boeing's fast-sinking 787 commercial jet program.

But whether Boeing meant to or not, the purchase also triggered the starting gun on an intense race between at least four states for a crucial stake in future commercial airplane production.

While Boeing has yet to get its new 787 commercial jet off the ground, business leaders, politicians, union officials and lobbyists are abuzz over where an eventual second 787 assembly line — and the economic bonanza that comes with it — will be located.

Aerospace analyst Scott Hamilton with Leeham Co., said Boeing is considering four possible locations: Everett, Wash., where the plane is assembled now; Charleston, S.C., where the rear fuselage sections are built; San Antonio, Texas; and Long Beach, Calif., where Boeing makes the C-17 military transport jet.

To the chagrin of Washington state, South Carolina looks to be winning the unofficial contest so far. Its governor Mark Sanford said Boeing's purchase of Vought — a deal that includes $580 million in cash and $422 million in forgiveness of previous cash advances — is a testament to his state's friendly business climate.

Hamilton says all the potential sites are viable but Charleston is the logical favorite, despite having a work force that would require more training. Its union membership is younger and less militant than Boeing's main Machinists union.

Locating a second assembly line in Charleston would be more costly than keeping production in Everett but there is plenty of land available and Boeing's real estate experts have already studied the area.

“It all comes down to one thing: cost,'' Hamilton said. “Cost of a strike delay, cost of disruption from strikes, productivity from unions.... If Boeing can't get labor stability, they will look elsewhere. A corporation is going to use the tools it has on hand to get what it wants from labor or the state. That's just the way the world works.''

Boeing spokesman Jim Proulx said Thursday he can neither confirm nor deny which sites Boeing is considering for an eventual second 787 production line. He added that no specific time line has been set for such a decision.

In a prepared statement regarding the Vought purchase, Boeing Commercial Airplanes President Scott Carson said acquiring the North Charleston facility “will strengthen the 787 program by enabling us to accelerate productivity and efficiency improvements as we move toward production ramp-up.”

Boeing has racked up more than 860 orders for its technologically advanced airplane, despite two years of delivery delays. Industry analysts have said that Boeing will need a second final-assembly plant to meet its ambitious goal of producing 10 787 jets per month by the end of 2012.  

Boeing has already put Washington state on notice that more attractive business and labor climates in other states could sway the company to build their airplanes elsewhere.

Washington Gov. Chris Gregoire told a business group on Tuesday that Boeing executives have assured her Washington is still in the running for a second line and that a decision will not be made until at least this fall.

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