Does 777X assembly site matter to airlines? Yes, up to a point; and a retrospective to 2009

As Boeing awaits responses to its Requests for Proposals from 15 sites around the US and possibly Japan, Washington State officials, company employees and other stakeholders fret that Boeing will choose someplace other than Everett (WA).

Everett has all the logical advantages: the 777 Classic is assembled here. There are vast, mature facilities here. There is an experienced workforce here. As we note in our previous post today, there are a lot of points to ponder when it comes to choosing a site.

But what about the airlines? Do they care where the airplane is assembled?

This isn’t entirely clear. Emirates Airlines and Qatar Airways said at the Dubai Air Show they want the airplane built at one location, in the US, not outsourced to a bunch of countries and industrial partners in the fashion of the Boeing 787–an industrial model that proved disastrous for Boeing and the customers.

But do they care whether the 777X is built at Everett, Boeing South Carolina or some other site? Emirates and Qatar didn’t say, at least publicly. Etihad Airlines, another launch customer for the 777X, hasn’t said anything publicly. The first customer for the X told us that what’s important to it is an accessible location for inspections–in other words, a location with good air service, which could be one-stop connecting service.

This would rule in any of the cities that have been mentioned publicly in Boeing’s RFP search. It would rule out a city like Moses Lake (WA), which has ambitions of becoming an aerospace cluster but which has no airline service. The closest major airport is Spokane (WA), a 90 minute drive. Sea-Tac International Airport is a three hour drive. Lufthansa seems unconcerned whether Everett or another site is the choice.

Lufthansa is also not a 787 customer, but officials are well aware of the issues and delays involved in the program. It seriously considered ordering the 787-10 but for route system operational requirements chose instead the Airbus A350-900. But for some 787 customers, assembly location does matter. We understand from our sources that some customers want their Dreamliners assembled in Everett, not Boeing South Carolina, where by most accounts slow production rates and quality control issues remain a challenge.

Retrospective to 2009

As we sort through the events surrounding the IAM 751, Boeing and the 777X, we went back and re-read some of the coverage from 2009 when Boeing put 787 Line 2 in Charleston. There are some similarities–notably Sen. Patty Murray’s involvement then and now–and a lot of differences. Here are links to our posts; be sure to click through to the links of newspaper coverage contained within our posts. Reading the stories linked have amazing relevance to recent events.

Boeing talks a sham: This story, in The Everett Herald, paints a much different picture than:

How South Carolina won the deal. Also: The click-through to The Everett Herald story from this link has a familiar ring to our “loyalty” post of November 21.

Back to today:

Stan Sorscher of SPEEA, the Boeing engineers’ union, has a guest column in The Huffington Post, taking Boeing to task (not a particular surprise) over the current site search and efforts to cut benefits with the IAM 751 “because they can.”

Danny Westneat, a columnist for The Seattle Times, wrote Sunday that perhaps Washington State should look beyond Boeing for aerospace. This isn’t new. We advocated this in October 2009 (just days before Boeing announced it would put the 787 Line 2 assembly in Charleston) at the Governor’s Aerospace Summit conference in Spokane (WA). Be sure to click on the link to the PPT presentation, too.

10 Comments on “Does 777X assembly site matter to airlines? Yes, up to a point; and a retrospective to 2009

  1. From the mouth of foreign babes. This isn’t just a teething problem with the B787. They outsourced and out-engineered so much of the Dreamliner, when it came to putting it together, it didn’t fit! When it flew, it burned, melted and is still being grounded. The DC-10 was teething problems. This was a terrible management decision to save dollars at the expense of its workers, that backfired from Japan to the Persian Gulf.

    The customer is right! Built the product in an adult matter. Gees, were Boeing shareholders duped to paying double for the development of the 787? Only now with all the fixes is it approaching the good airplane as advertised. The only thing that has saved McNerney’s job is the global upswing in the airline business, and lack of more competition in Aerospace. But that could be changing as we speak.

  2. I suspect customers for the first five years production will have strong opinions about where it is built. That means everybody who has signed up so far.

    One reason I have never been interested in Boeing stock is that I hate the idea of somebody playing politics rather than profit with my money, and I am surprised Boeing shareholders don’t feel the same in enough numbers to put some pressure on the board. Other reason is I don’t understand/trust Boeing’s accounts, you would need to be a lawyer or an accountant, I am neither.

    • What a shame Martin. You missed out on a 75%+ appretiation of the stock price not to mention four dividends.

  3. LH has a crew of inspectors on site for the 77F and 748 on site. From what I gather they are rather picky and not loved much 😉

  4. MartinA: The sheer scale of criminal lawsuits against the great, the rich and the famous in France is an unique national phenomena. Never mind the lads from EADS – the most recent presidents and prime ministers have all been hauled off to trial. Nearly all are dismissed, often with suggestions that prosecuting magistrates and upper court clerks were seeking publicity. Another aviation case of the same manner was the prosecution of anyone they could lay hands on over the Concorde crash at Paris.

  5. Did Murray ever really have gravitas? Really? How about Gregoire?

    “Yes we can” seems about as effective a motto for moving forward in 2014 as “mission accomplished” for IAM751 after the recent vote.

    Given the interesting depiction (2009) of 737 through 787 IAM751 work by model, most notably on the 777, the .ppt raises a question; how risky is it really to put the x model in California/elsewhere? IAM751 can still build the nose/tail if they don’t want to go out on strike first. Wing will be all new anyway (and probably safer w/ MHI).

    Once again, I’d also add that the 787 problems were many, and not all attributable to how much was done by IAM751. That Boeing saw such a radical industrial strategy as essential to get very advanced/technologically risky planes built is, though, fairly damning.

    Lastly, when/if the region runs off major Boeing assembly/manufacturing (I guess through GOP refusal to raise taxes) then how likely is it to ever (or within a few decades) attract another major airframer/final assembly operation? Once you give up home field…the game just gets harder. Maybe if wooden sea-planes make a return.

    Do “sources” say AA/UA specified “no Alabama A320’s?” Nope, I didn’t think so. I’d guess the (domestic) airlines don’t pay more than they absolutely have to, post-bankruptcy (err, maybe union/labor related), to defined benefit pensions!

  6. What? Why are you blaming GOP refusal to raise taxes for Boeing leaving? They are leaving because they are held hostage by the IAM every few years. And now the IAM is so mad they are already planning to strike in 2016, just to show Boeing who’s boss.

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