Boeing SC is shifting its entire 787 production to its North Charleston plant sometime next year, the company said in a news release today.
Top leaders at the company met virtually to make the decision as the manufacturer continues to adapt to the market downturn during the coronavirus pandemic, the release said. The single site consolidation, moving production of the 787-8 and 787-9 from Everett, Wash., is intended to improve operational efficiency and put Boeing in a better position for recovery and long-term growth.
In a news release after the announcement, Gov. Henry McMaster said, “South Carolina is open for business. We are committed to helping Boeing — and businesses large and small — grow and prosper in our state. Today’s announcement is a testament to our hardworking people, and to the fact that companies know they can find long-term success right here in South Carolina.”
The change won’t happen immediately. Boeing said its Everett, Wash., plant will continue manufacturing 787-8 and 787-9 jets until production reaches its previously announced rate cut to six jets per month. Company officials estimated that will happen sometime in mid-2021, the Boeing news release said.
“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 CEO of Boeing Commercial Airplanes.
In July, Boeing President and CEO Dave Calhoun said in an earnings call that the company would perform a study to determine the possibility of consolidating the 787 program to one site after a slowdown in demand for the jets.
“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,” the release said.
The coronavirus pandemic has had a profound effect on international travel. Now, at the end of its third quarter, Boeing is still struggling to match its earlier volumes and support two plants as the pandemic continues to devastate international travel, the news release said.
Two fatal crashes that grounded the 737 for 18 months and defaults in 787s that grounded eight more planes only created more problems for the company.
Currently, the West Coast builds the 737, 747, 767, 777 and 787. The 787 consolidation will mark a major shift for the North Charleston plant, which opened in 2010. The only city that builds the 787-10, North Charleston has lower production costs because labor is less expensive in South Carolina. It’s also a non-union plant.
The cost-cutting measure comes on the heels of a 10% work reduction Boeing began in May.
“We recognize that production decisions can impact our teammates, industry and our community partners,” Deal said. “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.”