Boeing on Oct. 1 confirmed that it will consolidate production and final assembly of its most advanced commercial product, the 787, at its North Charleston, South Carolina, facility, in 2021.
The expected but still stunning move to relocate 787 work from its Everett, Washington, widebody plant comes as the company looks to save money and maintain as much efficiency as possible in an environment that requires far fewer new aircraft.
“To ensure we can be effective in a market that will be smaller in the near-term, and one that will have different demands from our customers long-term, we made a decision earlier this morning to consolidate 787 production in South Carolina after months of detailed and thorough study,” Boeing Commercial Airplanes President Stan Deal wrote in an Oct. 1 memo to employees.
“The decision comes as the company is strategically taking action to preserve liquidity and reposition certain lines of business in the current global environment to enhance efficiency and improve performance for the long-term,” Boeing added in a statement.
Boeing said it will keep building the 787-8 and 787-9 at its iconic Everett, Washington, widebody plant until “mid-2021, according to the company’s best estimate.” After that, all versions of the 787 will roll off of the Charleston line, which opened in 2010.
The ramifications for affected employees, notably the 787 Everett workforce facing job losses, are not clear.
The Society of Professional Engineering Employees in Aerospace (SPEEA) that represents thousands of Boeing employees “have asked Boeing for specifics about the move and which employees will be impacted,” the union said in a statement. “As many engineers and technical workers’ jobs span multiple programs...it’s difficult to immediately know which employee groups are affected,” it added.
The Chicago-based company launched a 787 production study in July, when it announced that lagging widebody demand exacerbated by the novel coronavirus pandemic required a production-rate cut to six 787s per month starting in 2021. This is still less than the output of seven-per-month which Charleston attained when the combined output of both sites reached 14 per month at the peak of 787 production.
It is not clear how many 787s South Carolina can produce per month in its current configuration. But a demand rebound that warrants monthly rates in the high single digits or beyond would likely require an expansion. The company did not provide details about what drove 787 production study’s conclusions. Chief among the likely factors is the challenge of moving 787-10 production to Washington State.
The 787-10 is built exclusively in Charleston because the stretch version’s composite fuselage mid-body section, also produced in Charleston, is too large to be transported in the program’s bespoke 747-400 Large Cargo Freighter that moves subassemblies between the program’s production sites. Boeing’s statement references this, but stops short of calling it the deciding factor.
“The review examined the impacts and benefits to Boeing customers, suppliers, employees and the overall health of the production system,” Boeing said.
“The 787 study is part of an enterprise review underway to reassess all aspects of Boeing’s facility footprint, organizational structure, portfolio and investment mix, and supply chain health and stability. This analysis confirmed the feasibility and efficiency gains created by consolidation, which enables the company to accelerate improvements and target investments to better support customers.”
Washington Gov. Jay Inslee said that talks with Boeing over the move never reached the negotiations stage.
“I recently asked Boeing’s leadership what the company needs to keep 787 production in Washington state. In all our conversations, they never asked for anything,” he said in a statement. “I understand the serious market forces Boeing faces today. What I don’t understand is why the company can’t commit to restoring production here when the market for this plane improves.”
Boeing’s announcement does not detail the move’s effect on workforce, nor does it say what will happen in the space currently occupied by the 787 line in Everett, where the 747, 767, and 777 also are built.
Union leaders vow to support expansion of the Seattle-area aerospace cluster that Boeing has relied on for decades.
“SPEEA’s immediate focus is supporting the members who will be laid off,” said SPEEA Executive Director Ray Goforth. “Long term we will partner with community stakeholders to attract new aerospace jobs to the state by marketing the aerospace talent pool Boeing is walking away from.”
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