Second line

On Wednesday Boeing approved the choice of North Charleston, South Carolina for a second final assembly line for the 787 Dreamliner. Boeing Charleston will serve as a final assembly location, as well as supporting the testing and delivery of the airplanes.

The second 787 assembly line will do a couple of things. It will expand our production capability and diversify our manufacturing base. We think ultimately this will reduce costs on the program, and that’s important for maintaining our competitiveness.

You can read some of the details of the announcement in our news release.

image/photo

Boeing Charleston will be the site of the 2nd 787 final assembly line.

I think one of the first things I should reiterate here, as Jim Albaugh, president and CEO of Boeing Commercial Airplanes, emphasized to employees, is that we remain committed to Puget Sound.

Even though we’re expanding at Boeing Charleston, the Pacific Northwest remains the headquarters for BCA, and Everett will continue to design and produce airplanes, including the Dreamliner. As Jim put it, “there is tremendous opportunity for our current and future products here.”

Something very important to point out: we’re adding jobs in South Carolina, not taking them away from Puget Sound. Again, as we heard today, the Puget Sound area, where Boeing began, is and will continue to be our center for design, flight test and manufacturing.

One other note, until Charleston’s second 787 line is underway, we’ll establish a transitional “surge” capability in Everett. This is to make sure we have a successful introduction of the 787-9, as well as ensure a smooth ramp-up to 10 deliveries per month between the two sites. When the Charleston line is up and running we’ll phase out the Everett surge capability.

The process will take about 2 years. Our goal is to have the second line up and operational in July 2011, with a first airplane delivery from Charleston in the first quarter of 2012.

We will have the processes in place to effectively manage 787 airplane quality while operating 2 final assembly sites.

Finally, I want to point out that before we made this decision, we looked at a number of factors, including the business environment, logistics and infrastructure that exist at both company locations. We applied the same basic assumptions and ground rules to both sites, with a heavy emphasis on long-term competitiveness and ensuring a sustainable stream of deliveries for our customers.

And that’s the bottom line, staying competitive, diversifying our manufacturing base and cost effectively delivering to our customers the 787 Dreamliner, an outstanding airplane with unprecedented market demand that as Jim said, sets “the standard for commercial aviation in the second century of flight.”

Comments (45)

James (Honolulu, Hawaii):

That Boeing is already planning a second line for the 787 is, I hope, a sign that this program is finally on track.

Greg (San Jose, CA):

The state of Washington gave Boeing the incentive worth $3 billion to clinch the first 787 line.

What was the loss due to the strike last year? Wasn't it in the $1 billion ballpark, too?

Boeing should counter with the loss number whenever someone mentions that $3 billion incentive.

PM (Seattle, WA):

No need to mince words, Randy. There's only three reasons why Boeing would pick S.C. for the site:

1) Cost - in wages (can we say 50% reduction in pay for the same work?)

2) Cost - in lost time due to strikes. Yes, that's right, we're not totally clueless ... Boeing is really heated up about the last strike, and the customers are too. Thus, it makes 100% sense to shoot across the bow of the IAM and SPEEA.

3) The Tanker - where will final fab, assembly, and etc. happen if we make a second 787 line where the 767 used to be? Boeing is betting that they will get the Tanker contract (which in my opinion is counting chickens before they're hatched) or they wouldn't have done so. That's a huge gambit, because if Boeing doesn't get the tanker contract, the company will have to figure out something to do with that factory space.

John Cochran (Edwards AFB, Ca.):

An obvious goal down the line is to turn one of them into a freighter / tanker line and compete the tanker for the next tanker contract after the current 179 are built.

Gordon Werner:

If Boeing wants to prove to us that they are committed to Washington then they need to guarantee that the next new aircraft types will be developed here. Make a deal with the unions for the long-term no-strike contract with the guarantee and all will be well (or at least it will on future projects)

Mary (San Antonio,Tx):

So does this mean that we are out of this picture & project all together? It seems everything is being taken away from us here. Making a lot of us nervous is all.

Jerry Headley (Seattle):

The deal was done the day they applied for blg. permits. I believe you just made up my mind to retire.

Chris C (South Africa):

North Charleston, S.C., certainly looks like a beautiful place with all those thick wooded forests! At least Boeing’s two huge final assembly lines are set in really scenic areas, with Everett still remaining my favourite with its mountain views (when it’s not raining), thick forests and Puget Sound Lake System. The Everett and Charleston combination will, no doubt, increase Boeing’s competitiveness and manufacturing flexibility.

I predict that we’ll see Everett and Charleston sharing the final assembly responsibilities for the future 777x as well. Either way, Everett is the powerhouse and mainstay of BCA, and will remain so, forever, period.

Elliot Heifetz (Bellevue, WA):

Considering the factors that delayed the 787, with foreign suppliers and the related delivery and quality control issues I hope the company can successfully manage distribution, delivery and quality at plants 3000 miles apart.

Claybus (Artlington, WA):

The union offered a 10-year agreement that would guarantee no strikes, and Boeing showed little interest, said Tom Wroblewski, president of Seattle-based Local 751 of the International Association of Machinists and Aerospace Workers.

‘A Smoke Screen’

“Most of the time, they didn’t even take notes,” Wroblewski said. “It’s now clear that Boeing was only using our talks as a smoke screen, and as a bargaining chip to extort a bigger tax handout from South Carolina.”

Brian (Huntsville, AL):

Congrats to Boeing Charleston on securing the 2nd 787 assembly line! You reference that jobs will be created in South Carolina and not transferred or lost from Puget Sound. I was wondering if you are able to give an estimate of the number of jobs that will be created and the mix, i.e. engineering/manufacturing/finance of those jobs.

Jerry (New York City):

This is such an interesting and significant direction for Boeing to take. It signifies a very new way of assuring production for its customers.

One piece of the announcement, however, could use some clarity. That is, what is meant by a "surge" in production in Everett before S.C. is fully operational.

Is Everett presently geared up for that increase without expansion?

-----------

Thanks for the question, Jerry.

Transitional "surge" capability means a temporary final assembly line that will be in place in Everett. It will not be considered a full production line, but it will allow us to mitigate risks as we introduce the 787-9 and start up final assembly in Charleston.

-- Randy Tinseth

Jerry Swanson (Seattle, WA):

I am surprised no one has mentioned one other key benefit which has become more apparent with the Howard Hanson Dam situation threatening the south Puget Sound.

It does threaten almost all Boeing's operations south of Seattle, and if we get the "BIG ONE" all the Puget Sound could be significantly impacted. So having a production line in South Carolina also provides a geographic diversity that might be critical if we suffer future Puget Sound natural catastrophes.

Gary Gerfen (Renton, WA):

This business decision in my opinion is made from a sound analysis of the factors noted and I fully support the effort, it is amazing that the IAM cannot wake up and adjust to a changing economy and environment.

Dave (Renton, WA):

"We will have the processes in place to effectively manage 787 airplane quality while operating 2 final assembly sites."

Do you really believe this? In Everett you will have a highly skilled, but (thanks to this decision) somewhat demotivated work force. In Charleston you will have a motivated, but largely unskilled crew, and they will be 3000 miles away from their main technical support.

I think the airplanes coming off the two lines have the potential to be quite different. And the overall quality of either line's product will be diminished by this move.

Andrew Boydston (Caldwell, ID):

Congratulation Boeing on making a tough decision a good one, my only complaint is that it was not Boise, even though it was not in the running. Since Boise has cheap power, no unions, high quality life style, educated workforce and is central to every thing Boeing. However, that is my sales pitch.

Nevertheless, I can understand Charleston as part of Boeing's effort to get its arms around the 787 effort by reducing risk through increased ownership of key programs rather than out sourcing its critical tasks. A second assembly line there makes a lot of sense regardless of what the State of Washington desires. Delivery is now a key strategy to profitability. Otherwise, there will be no innovation and product for the future.

Yes, Boise does have space for Aircraft to roam:) If you ever want to consider additional options stop by Boise.

Regards from an old Montana alumni

Jim F. (Renton, WA):

Probably a smart move. I wonder what happens if Boeing learns that the second line in Charleston is consistently outperforming (cost, schedule, and quality) the original line in Everett? Could get interesting ...

BW (Renton, WA):

Can morale possibly get any lower in the Puget Sound area? .. Hit after hit... When are we going to see a little "new business" come our way?

Joe (Seattle):

S.C. this low tax non union pro business state has one of the lowest quality of life scores,poor school systems and a wide disparity of wealth doesn't sound like a good climate to do business.The 2008 State Competitiveness report of the Beacon Hill institute of Suffolk University ranks states with ability to attract and retain business and provide a high standard of living.

Washington ranks 6th South Carolina ranks 46th

TC (Mt. Vernon, WA):

More manufacturing and less agriculture in the south means less manufacturing and more agriculture in the northwest. More good food for us, no problem there.

J (auburn, wa, usa):

I'd like to see Boeing straighten out the original 787 production line prior to starting work on a second. Seems like a risky distraction while they are currently suffering thru problems with the first.

Complete a few aircraft, get the Type Certificate, then engage in the very distracting and disruptive process of starting a second line.

JS (Everett, WA):

I think that the only one's who were "astounded" by Boeing's decision are the union leaders. Consider the sculpture at the IAM union hall. It portrays a burn barrel, and union workers picketing with their families.

As long as they consider a strike as a first-line weapon, nobody can expect constructive bargaining with them. A strike is the result of failure of the bargaining process, and an embarrassment to all parties.

It should be a last resort, not a preemptive threat. If the unions don't tear down the mentality that is represented by that repulsive sculpture, then we can all expect to continue to lose ground in the Puget Sound region.

Bernard (Bellevue, WA):

As adults and parents, we make decisions based on several different factors as what is best for us and our families. For example what car to buy. We shop around, see what we can afford, look at pro's and con's and make a decision. Some one wins and the others lose.

Corporations are not humans. Quit with the human attributes. Corporations are generally accountable to share holders, not employees... yet employees are very important to the success of the corporation. The decision has been made, the next step as an employee and share holder is to make it successful. Don't be the whining Brand X auto salesman whose car you did not buy... fix the reason it was not bought.

Rob Troxel (Lake Forest, IL):

Congratulations to Boeing for adding Charleston as the other site. The Unions really blew it during the last strike especially failing to understand that they are not going to be the only game in town. The people in South Carolina will build a great plane!

DR (Huntsville, AL) (Huntsville, AL):

Great decision Boeing - severely decreased union ransom threats, manufacturing diversification, new employment opportunities... When will we see open job requisitions posted for Charleston???

Paul Bernhard (everett WA):

How can Boeing blame a 58 day strike for the 787 being over 2 years late and counting?

John V. (Bellevue, WA):

The decision has been made! like it or not, we need to get over it and focus on getting our planes flying.

We should focus more efforts on capturing market shares from EADS - Airbus, Embraer and other competitors out there.

I am glad that the second line is in the U.S, not somewhere else.

Paulo M (Johannesburg, RSA):

I think certainly an interesting move for Boeing. Best regards for that.

My only issue with this is the continuing bad blood between parts of Boeing - namely Management and Unionized Employees. Distasteful quite frankly. Well, for one thing, the unions spent all of their bargaining power on that outrageous strike last year.

jesus (Everett, Wa):

I'm tired of hearing about the strike, we went on strike because Boeing was holding out on a contract that we deserved, they were offering a wooden nickel and we wanted a real one.

We told them for months and months what would keep us on the production line, and they low balled us. Its not our fault, its there's. Just like with this 2nd line, if they want to build it in S.C., go right ahead, but don't say that we didn't tell you so... cuz we did. As far as retaining jobs in Puget sound, that's not entirely true, as soon as the first line is at full speed, I'm sure that at least 60% of the current jobs on the 787 will be cut, leaving the people who worked through all of Boeings mistakes, out on the street.

Don't you love big corporations? Feel the love baby.

Chris Johnson (Renton):

Hey, Charleston was planned years ago. From a union standpoint, it is sad to see constant blame being aimed at the members and the union.

Yes, we did strike for 57 days. However, we are not the sole cause of the delay of the program. Also, the decision was likely made years ago, as ground breaking on such a huge project would take years to get ready. No huge construction project can be done in a few months folks!

Norman (Long Beach, California, United States):

I think this was a political decision to open a line in a so called "right to work" state and a shot against the unions for the strike that even I can say went too long.

South Carolina has lower wages, ergonomic standards, quality of health, education and quality of life. This would have not been my first choice but I hope the same wages and ergonomic standards will be maintained in Charleston as it is in Washington State. All of this being said I want the 787 program to succeed no matter where the airframes are being assembled in America.

Mark Webb (Arlington,wa):

SC workers will want what the union workers in the northwest have very soon. When they work side by side in SC and compare pay the union will be asked back. Greed is not just a northwest thing.

Kinbin (Taipei Taiwan):

Following from the current threads of SC being a down-and-out state, the unions and folks from Detroit staked their claims being the car assembly experts in the best possible location 2 decades back.

The rhetoric intensified when Southern states such as KY were chosen to build new cars with a non-union workforce.

Consider their landscape in Detroit today.

Bob (Marysville, WA):

You are going to build a second line in Everett until you have built another Everett in South Carolina and then you are going to discontinue the second line in Everett. When are you going to take the charge for the next billion dollars against this factory in South Carolina and tell me again how this is saving anything?

Gregory Schmit (Anchorage, Ak):

You can say what you want about the union, but what they did was pull Boeing's burning bacon out of the frying pan.

Its pathetic that Boeing could not negotiate a reasonable approach to no strike.

So, the people that save the 787 and are saving the 747-8 get the shaft. Notice it is the -8 Charleston will assemble, of course Boeing wants people that have the experience in fixing screw ups to assemble the -9s, it will be screwed up just like the last two model of aircraft Boeing came out with.

This is the same company that saw Airbus screw up because of a software incompatibility issue, and they did the same thing on the 747-8. They should not fire the current management, they should keep them out of the Aviation gene pool to save the American Aircraft industry.

Wait until a Hurricane hits and takes the whole facility out in Charleston. Then zero production on both lines. What's the difference between that and a strike?

I am not particularity pro union, but Boeing management is using that to hide their total ineptness, and as usual, its the guy on the line that makes it work.

Linda Cameron Taylor (Arlington, WA):

What happens when our 787 Customers start requesting their airplanes to be built in Everett by the experienced workforce rather than a lesser quality built airplane by the folks in the "low country".

It happened before with the 747-400. In Everett there was an "A" line and a "B" line of production. The "A" line were the more senior mechanics and teams of experienced assemblers and installers. "B" line were the hacks, and dead-weights, problem people not focused on their jobs. When on-site customers - JAL, ANA, NW, etc. noticed the huge difference in quality, complained to corporate. Ultimately, they raised a stink and started demanding that their airplanes be fired in sequence to the "A" line.

Those that don't learn from history or doomed to repeat the outcome....

P.Sumantri (France):

I have never had any doubt about a second 787 line (and the related supply chain enhancement). The location of the second line is of little interest for someone who does not work at Boeing like me.

My biggest interrogation about these new facilities has always been the possible mix operations for the 787 and the hypothetical enhanced or new 777.
Whether part of the production means at SC will be compatible with the hypothetical aircraft has become my latest obsession.

Harvey (Kent Wa.):

I'm sure that Richard Branson and Steven Udvar Hazy will be more than happy to receive their first 787s from S.C. and their customers won't object to getting the first ones off the new S.C. line.

If I have a choice I won't fly on any 787s for the first few years of production!I was with Boeing for 30 years and I've seen the continuing decline in morale and the poor management ruin the company.

The union, state, and most importantly the company need to start now to ensure future aircraft are built in Puget Sound!

Brian S. Thackston (Greenville, SC.):

I know it was a coup to land Boeing for SC., but as many international companies have found (profitability) over the years especially in the "Upstate" Greater Greenville area of SC. which has an international reputation for a growing technical workforce and strong quality of life especially in the main metro areas; that’s comfortable to the likes of national HQ and key mfg. giants:
BMW – US HQ & Mfg.
Michelin – US HQ & Mfg.
GE – Gas Turbines & Aerospace Mfg

Charleston will add to this growth model by plugging in to our state's existing research & business clusters especially in Automotive Research, Advanced Materials, Nuclear, Biotech & recently Aerospace; which are proven and tried networks.

South Carolina is more than just a great place to vacation...it’s a new direction for business.

FlyBoeing (Seattle, WA):

"In Everett there was an "A" line and a "B" line of production. The "A" line were the more senior mechanics and teams of experienced assemblers and installers. "B" line were the hacks, and dead-weights, problem people not focused on their jobs."

Is this what a union provides? What a perfect example of why Boeing is moving to SC! Without the union protecting them, the hacks, dead-weights, and problem people not focused on their jobs wouldn't have jobs! Thanks IAM!

Jas (Everett, Wa.):

I am tired of reading comments from people bashing Boeing's unions. Do they really believe that the 57 day strike in "08 is the main reason that the 787 is more than 2 years behind? Give me a break.

There are a lot of factors that have contributed to its delay. A lot that the general public doesn't read or hear about through the media. It's over people, give it a rest. My main thought about the second line in Charleston is what is going to happen when, in years to come (which may be sooner then later)when the orders trail off and production slows down, which everybody in the industry knows happens every few years, will Boeing decrease production at the Everett plant (because of the union) and increase production at the Charleston plant (because of non-union)? I've been with Boeing for 20 years. Hopefully I'll be retired and on a golf course in Arizona by then.

Charlie B (Lake Stevens, WA):

I found a blog post that adds some levity to a tough situation for Boeing in Everett:

Boeing’s 787 Second Line is Dancing South

http://everettwablog.com/?p=2046

James Robinson (Long Beach):

Boeing is creating a new production line at great expense in S.C. to get away from the Union.

Boeing is willing to do this, because the IAM costs so much to deal with. Boeing must pay machinists higher than market wages and benefits, plus the company must deal with strikes. Strikes cost Boeing Commercial Airplane Group tons of money.

The Union Employee's need to understand if they cost Boeing a large enough premium over a long enough period of time, Boeing will move elsewhere.

Patrick Alvarez:

Working here in Everett at Boeing for under 2 years I have noticed that something is missing. Trust! Over the years it appears that a separation has taken place between "Us" and "Them". How it has happen is not as important as how do you fix it? If we don't change how it's done all of Boeing will suffer.

Past mistakes have been made, but if we let the past rule, then what's our future? During contract time if all could approach it as what is best for both sides and not approach it like going to a fight.

The 787 is behind by 2 years, but it seems like the "old-timers" are fixing it to fly.

The company has had some blunders, but who came up with the idea and plans for a composite plane that Airbus is trying to copy?

Just think where we can be together.
Take the time and think of what can be.

Mikonropolis (Nebraska):

I've been wondering if the strike had occurred this year, would Boeing have asked for federal assistance to just swap the unhappy strikers with the desperate for work unemployed?

There are career union leaders out there that have significantly damaged the reputation of the supposed superior employees they represent (assuming pay is directly commensurate with quality of the employee). Time for the union victims to vote out the career union leaders. Sure, there is a risk that you'd need to vote in someone new...would that be bad?

We welcome your comments. However all comments are moderated and may not post immediately. Offensive or off-topic comments will not be posted. We will not treat any comments you submit as confidential information. Please do not submit comments that contain any confidential information belonging to anyone else.

By submitting a comment to Randy's Journal, you agree to our site terms and privacy policy, and to having your name displayed with your comment. All or part of your comment may be posted or cited in the blog. Your name and personal information will not be used for any other purpose, and we will not publish your e-mail address.

 

More posts