By Eric M. Johnson
SEATTLE (Reuters) – Boeing Co said on Thursday it will move the rest of its 787 Dreamliner production to South Carolina in 2021, a cost-cutting strategy that raises questions over the future its giant Everett plant north of Seattle.
Reuters first reported on Sept. 21 that Boeing was near a decision to move Dreamliner production to South Carolina as its strategy of supporting two plants has been severely tested by the coronavirus slump in international travel, on top of a cyclical downturn in demand for big jets.
As recently as last year, Boeing was making record numbers of 787s at its Everett widebody hub north of Seattle and – since 2012 – a second plant in North Charleston, South Carolina.
Boeing said the single site would improve operational efficiency as the U.S. planemaker adjusts to the market downtown and positions for recovery.
It also said 787 production would continue at the Everett site until a previously announced rate cut to six airplanes a month in 2021.
It said it would consolidate production at its North Charleston facility starting in mid-2021, according to its best current estimate.
A review of its 787 production strategy, announced in July along with sweeping rate cuts across its widebody programs, had already rattled unions and politicians in Washington state, who see Boeing wavering on its commitment to its Seattle-area birthplace, something the company denies.
House of Representatives Democrat Rick Larsen, who chairs the aviation subcommittee, called the decision “shortsighted and misplaced” in a statement this week, and vowed to fight to bring 787 production back to Everett.
“We recognize that production decisions can impact our teammates, industry and our community partners,” said Boeing Commercial Airplanes chief executive Stan Deal.
South Carolina offers cheaper labor, and the largest 787-10 variant cannot easily be built elsewhere due to its size.
But doubling down on the southern state is not without cost.
Boeing must weigh the chances that concentrating 787 output in the south would make it easier for unions to organize there, a senior industry source said.
(Reporting by Eric M. Johnson in Seattle; Editing by Nick Zieminski)
