Skip to main content

Boeing to Add Assembly Line for 787

Boeing says it will establish a second 787 assembly line in North Charleston, S.C.
  • Author:
  • Publish date:



) --


(BA) - Get Boeing Company Report

says it will establish a second 787 assembly line in North Charleston, S.C., a blow to Washington state and the International Association of Machinists and a boost to the South Carolina economy.

Although Washington state officials mounted an intense effort to retain 787 production, South Carolina offered an incentive package, recently approved by the state legislature, and a non-union environment.

Boeing shares closed Wednesday at $47.22, down 53 cents. But about an hour after the close, and following the announcement of the Charleston site, shares were up 93 cents at $48.20.

In the third quarter

TheStreet Recommends

, delays related to the 787 were a major drag on Boeing earnings. The company took a $1 billion pretax charge against the 747-8 freighter program, largely because of delays resulting from the deployment of engineers to the 787.

The company also took a noncash charge of $2.5 billion because it concluded it couldn't sell the first three 787 test-flight airplanes and therefore reclassified them from inventory to research and development expense. The net loss in the quarter was $1.6 billion.

On an earnings conference call last week, CEO Jim McNerney said Boeing remains unhappy with the continued threat of strikes by its IAM workers in Everett, Wash.

"Establishing a second 787 assembly line in Charleston will expand our production capability to meet the market demand for the airplane," said Jim Albaugh, CEO of Boeing Commercial Airplanes, in a prepared statement. He said the decision "allows us to continue building on the synergies we have established in South Carolina" and will enable Boeing to ramp up to production of ten 787s a month.

Already in North Charleston, a Boeing plant performs fabrication, assembly and systems installation for the 787 aft fuselage sections. Across the street, Global Aeronautica, which is 50% owned by Boeing, joins and integrates 787 fuselage sections from other structural partners.

Boeing said that until the second 787 assembly line is brought on line in North Charleston, it will establish "transitional surge capability" in Everett to ensure the successful introduction of the 787-9, the first derivative model of the 787. When the second line in Charleston is operating, the surge capability in Everett will be phased out.

Albaugh said Washington remains important to Boeing. "Everett will continue to design and produce airplanes, including the 787, and there is tremendous opportunity for our current and future products here," he said.

-- Written by Ted Reed in Charlotte, N.C.