Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Keeping Boeing in Seattle
Update, Aug. 26:
Bloomberg’s story; the Seattle Post-Intelligencer’s story; Charleston Regional Business Journal.
Update, Aug. 25:
KING 5 TV Seattle (NBC) reported today that Boeing will file for permits tomorrow to expand the Charleston, SC, plant in anaticipation of a Line 2 for the 787–but that no decision about placing the plant there has been made. The story may be found here.
Original Post:
On-line newspaper Crosscut has an interesting piece about the debate over how and whether to keep Boeing in the Puget Sound region (Seattle). (Link warning: Crosscut is very slow.) The debate is heating up again because of the recent purchase by Boeing of Vought’s 787 plant in South Carolina, and the presumption by many that this is a prelude to locating a second 787 production line there.This, of course, got Puget Sound in a twitter because the fear is that if Line 2 goes elsewhere, the successor airplanes to the 737 and 777 will follow and eventually all of Boeing will leave. Fuel was added to the fire when Scott Fancher, the head of the 787 program, told the Charleston Business Journal that a decision on the location of Line 2 will be made by the end of the year (Boeing Corporate has not confirmed this timeline).
We previously wrote why Line 2 is needed sooner than later, and the recent additional delay reinforces this view. We believe locating it next to Line 1 in Everett makes the most sense, where synergies would exist and the experienced IAM and SPEEA workers can assemble the airplanes and work out problems on the spot. The question is whether the IAM, which has struck Boeing several times since the turn of the century, and Boeing management can come to some accord which will give assurances production won’t be interrupted by future strikes. This requires a major change in culture on the part of both sides.
The artical is basically..brilliant, both in content and tone. It refelcts the situation very accuratly as a “shakedown”.
Why? Because once for Boeing is never enough. With every new program or model intro, it starts twisting labor and political arms.
For their part, the unions tend to be there in Olympia, partnering with Boeing to twist arms on Boing’s behalf as well, as long as they aren’t getting thier pockets picked.
The only thing I disagree with is that the state SHOULD exit the fray and let the Unions and Boeing deal with it. If business and business taxation issues are important, let them be dealt with in a macro sense. We need economic diversification and that is a no brainer.
I have pretty much come to the conclusion that if Boeing is dumb enough to try a move to S.C. or anywhere else with a second line, it will fail, fail horribly, and miserably. I’m also convinced that it must be allowed to fail in such a manner, that it must be so for the long term future of the company. Only such a massive failure and destruction of shareholder value will see the exit of the company’s top leadership, and hopefully, several board members.
Boeing has to be partially destroyed in order to save it. That’s the sad truth. I hate to think it much less say it. But there it is.
I would find it extremely silly for Boeing to open a second line elsewhere AND then to close shop in Washington. It would eliminate the biggest advantage of opening a second line elsewhere. Namely not having all your eggs in one basket. If Boeing management is at all clever (now isn’t that a topic for debate), there will still be a Boeing in Washington for years to come, albeit a very different Boeing. Imagine IAM going on strike in 9 years with a second 787 & perhaps even 737 line going strong elsewhere.