As the airline industry continues to address the impact of COVID-19, the Boeing Company has said today that they will begin to consolidate production of the 787. According to the company’s best estimate the consolidation will begin at their facility in North Charleston, South Carolina, starting in mid-2021. The decision comes as the company is strategically taking action to preserve liquidity and reposition certain lines of business in the current global environment; this is in a move to enhance efficiency and improve performance for the long-term.
While Boeing’s versatile 787 family has outperformed other widebody airplanes, during the challenging market downturn, their production system has been adjusted to accommodate the current difficult market environment; at the same time positioning the 787 family to ramp up production as air travel increases.
“The Boeing 787 is the tremendous success it is today thanks to our great teammates in Everett. They helped give birth to an airplane that changed how airlines and passengers want to fly. As our customers manage through the unprecedented global pandemic, to ensure the long-term success of the 787 program, we are consolidating 787 production in South Carolina” said Stan Deal, president and chief executive officer of Boeing Commercial Airplanes.
“Our team in Puget Sound will continue to focus on efficiently building our 737, 747, 767 and 777 airplane families, both sites will drive Boeing initiatives to further enhance safety, quality and operational excellence.”
Stan Deal, president and chief executive officer of Boeing Commercial Airplanes
The company began assembling 787-8 and 787-9 airplanes at their Everett site in 2007. They then brought the North Charleston facility on line, as a second final assembly line, in 2010. However, only the North Charleston site is set up to build the larger 787-10 model. Production of the smaller 787 models will continue in Everett, until the program transitions to the previously-announced production rate of six airplanes a month in 2021.
In July, Boeing announced an in-depth study into the feasibility of producing 787s at a single location. The review examined the impacts and benefits to Boeing customers, suppliers, employees and the overall health of the production system. The 787 study is part of an enterprise review that is underway to reassess all aspects of the Boeing facility, including: the 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.
“We recognize that production decisions can impact our teammates, industry and our community partners” said Deal. “We extensively evaluated every aspect of the program and engaged with our stakeholders on how we can best partner moving forward. These efforts will further refine 787 production and enhance the airplane’s value proposition.”
Boeing have said that they are assessing the potential impact to employment in Everett and North Charleston; they will continue to communicate any changes directly to their employees.
Shocking that giving Boeing billions in tax cuts didn’t keep them around longer than the time it took for them to use those savings to build a new assembly elsewhere. Once the tax credits in South Carolina expire, they’ll probably move somewhere even cheaper.
I would hope that our local politicians would learn from that, but obviously it hasn’t changed with them giving Amazon similar billions in tax credits. At least there are a couple of newer ones that haven’t completely caved to corporate interests yet.
Translation: South Carolina maintains a much more business friendly legal and tax environment than Washington. Not good to have all one’s eggs in the Washington basket while its politics take a steep left turn.
This is the sad reality that it doesn’t make sense to have two production lines with a production rate of 6 per month. Previously, it was 14 per month.
That also shows that if the union is slightly militant, it can get ahead but if it is too militant, things like the South Carolina plant would be built. If they were not so militant during the 2003-2007 period, then all 787’s would have been built in Everett.