Wed November 6, 2013
South Carolina's Growing Importance To Boeing
Boeing is reported to be in the final stages of negotiating with the machinists union to build its new passenger plane in the Seattle area, rather than North Charleston as some had speculated. Nevertheless, South Carolina's importance to Boeing's business is growing.
Boeing probably didn't seriously consider South Carolina for its next big project, says aviation analyst Richard Aboulafia of the TEAL Group.
"Not really, but of course it was definitely in Boeing's interest to imply that it might," adds Aboulafia, because South Carolina's non-union status is helpful leverage as Boeing negotiates with the union that builds its planes in Washington.
In this case, Aboulafia says it makes sense for Boeing to build the next generation of its 777 passenger jet where it's long built the original version – near Puget Sound. But he says South Carolina – where Boeing started a second production line for the 787 Dreamliner a few years back – will be a serious contender next time the company looks to launch a brand new aircraft.
"I think if this were a clean sheet of paper design, (South Carolina) would absolutely be a strong negotiating card for Boeing," says Aboulafia. "Right-to-work laws are very effective for manufacturers."
State Senator Paul Campbell who represents the Charleston area says the thinking was that "if we got (Boeing) here, we would see growth and that's exactly what we're seeing."
Boeing is in talks to buy another 260 acres from the Charleston County Aviation Authority "so they can continue to grow their manufacturing capability in South Carolina," says Campbell who also heads the aviation authority.
Boeing already employs some 6,000 people in South Carolina. In 2009, it received state and local incentives worth $470 million to build the North Charleston plant. This past April, state lawmakers approved $120 million more for a one-billion dollar expansion Boeing has promised. And last month the company announced an engineering design center in the state.
South Carolina's Department of Commerce is hoping for a clustering effect around Boeing similar to the dozens of suppliers who've sprouted in upstate South Carolina since BMW came to town 20 years ago.
"Boeing – if we could put it on the analogy of a shopping center, Boeing really is the anchor tenant for aerospace," says Charlie Farrell, director of the Department of Commerce's Aerospace Task Force, which was created in 2012 because of – you guessed it – Boeing.