Four sites considered for 787 Lines 2

Update, July 8: Dominic Gates is back from vacation and has this important insight about the “poker game” now underway between Boeing and the IAM. Gates also has this story about the purchase of the Vought facility with new information.

Andrea James of The Seattle PI has this piece about Washington State’s effort to keep Boeing.

Original Post:

We now have some additional color on the prospect of a Line 2 location.

According to a person with some knowledge of the situation, Boeing has yet to make a decision on the location (which is consistent with what we’ve been reporting, even as we think the odds currently favor Charleston). We are told Boeing is considering four sites: Everett (where the 787 is assembled now), Charleston, San Antonio and a fourth location our source did not know. Speculation is that it might be Long Beach, where the C-17 is made and there is a workforce already skilled in airplane assembly. The union there is the UAW, which has proved easier to work with than the IAM 751 local in Seattle. However, the California business climate is hardly any more friendly, and perhaps much less so, than that in Washington.

Charleston, while a logical favorite, requires a workforce that is more skilled than currently trained and would likely require importing large numbers of the skill labor required for the complex task of assembling airplanes, we are told.

Further, Alenia still owns 50% of Global Aeronautica, the other major facility at Charleston. (Boeing previously purchased Vought’s 50% share.) Our expert source on this believes Boeing should buy out Alenia and have total control of all the Charleston facilities before proceeding with a Line 2 decision.

Charleston has 75% of the fuselage production now. Wings would have to be transported to Charleston for a Line 2, which is no small task, but overall logistics would be simplified by eliminating the need to transport major sections to Seattle, with costs reduced accordingly. But, our source said, a lot of work will be necessary to make Charleston a world-class integration facility.

There is plenty of land available at Charleston. While there have been unconfirmed reports that Boeing Real Estate people are already there buying up land and preparing to file for the permits, our source says this isn’t necessary. Our source says that once Boeing gave the word, the state could buy up the land and there wouldn’t be any need for Boeing to overtly be involved.

Our source believes that Boeing has not completed the studies necessary to site Line 2 and that there will likely be real competition among the four sites to win the business. Our source believes that Puget Sound has a chance at retaining Line 2, calling it “salvageable.”

13 comments on “Four sites considered for 787 Lines 2

  1. Of Course Everett is “salvageable”. This is precisely the same tactic used to bleed the taxpayer on the original 787 siting competition.

    Make Washington believe itself the underdog, and they will open a few more veins.

    When the state is bled white make the announcement:

    “It was really close and a tough decision, but Everett wins”.

    Then grumble about the imperfect deal until behind closed doors. Then pop the champaign corks and dream up new ways to antagonize the workforce.

  2. Doesn’t the Dallas Fort Worth area have a significant aerospace presence already? I would have thought it would be a target rich environment. Also, Texas has no state income tax, which could be used to induce experienced workers from out of state to relocate. If I were to choose between San Antonio (and the former Kelly AFB faciliy) and the DFW region, I would opt for the latter.

  3. Scott, do you have an impression of the likelihood of the entire 787 assembly operation moving to Charleston, at some point?

    It seems to me, you will only really simplify the logistics when all assembly is in one place.

    • We think consolidating two lines in one location makes all the sense in the world and we actually suggested as much in our April speech to the Economic Development Council of Snohomish County. But the disruption in moving Line 1 would be immense.

    • Assembly is only one part of the process. You still have all your engineers, customer reps, Commercial Aviation Services, etc. here. To move the entire line there would be a much larger expense to relocate or hire/train thousands of non-manufacturing people and equipment.

      Scott, how politically impossible would it be for the blue State of WA to become a right-to-work state? Has it ever been discussed or is it strictly taboo for politicians to even mention it?

      • “how politically impossible would it be for the blue State of WA to become a right-to-work state?”

        HA! As long as the Ds control the Legislature and the Governor’s Mansion, it ain’t gonna happen. (We’re a D, BTW, despite what some nutcase in Snohomish County keeps alleging on other blogs.)

  4. Washington state needs to take this seriously. Are the other cities being leaked to create a sense of urgency? Maybe, but it doesn’t matter. Boeing is clearly seriously considering moving the second 787 line. So it’s time that state business and political leaders — and especially the union — band together to keep the 787 in Puget Sound. If the 787 moves away, Boeing could be on the verge of leaving Washington altogether.

  5. Boeing would be better off relocating to a “obligation-to-properly-manage” state.

    Seriously, it’s not like aerospace blue and white collars are just out there waiting to be hired. And you can’t just randomly pick people and assume that they can learn in a few months what hitherto had to be accumulated over two or three decades. How much proof do you need that the greensite-in-tax-paradise approach is unfeasible?

    Same for risk sharing. Investors were slap happy about the way Boeing offloaded capex to partners like Vought. Now Boeing was forced(!) to bail out Vought for $580m PLUS all the advance payments on top(!). How smart is that? And if there’s an additonal significant delay, how many partner suppliers will have to be rescued like that?

  6. I think the real question is, knowing that Russia and China are getting into the commercial airplane business sooner or later how does Big B and the Bus Boys stay competitive, also how soon before the South American counties along with Canada and maybe India start making large jets?

    The current down turn will not last forever and when the economy returns Air Freight will stuck-up all good operable used aircraft. They need to plan and reposition their plants now before the Wave of Need and Best Price comes. This current down turn in the economy will also re-center where the emerging nations invest their money in manufactured goods such as where can they get the best plane, truck, or car for their bucks or could that be Euros by then?

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