After years of fast-paced growth, Boeing South Carolina is weaning itself off the contract workers who have helped get the company’s 787 plant off the ground.
The aerospace giant on Thursday acknowledged that it is starting to eliminate some of the temporary hired hands at its North Charleston manufacturing campus.
The workforce reductions were first reported by The Wall Street Journal, which, citing an unidentified person, said the cuts could total hundreds of workers.
The cuts are part of a cost-savings plan that predates the Jan. 16 grounding of the 787, according to the Journal, citing an unidentified person familiar with the plan.
The reductions, which mainly affect contractors as opposed to Boeing direct employees, started late last year and eventually will claim as much as 20 percent of certain teams at the factory complex, the person told the Journal.
Boeing has more than 6,000 workers, mostly direct employees, in North Charleston. The Journal report Thursday came on the same day those direct employees got their annual bonuses, 18 days’ pay.
Boeing South Carolina spokeswoman Candy Eslinger emailed a statement confirming the ongoing reduction of contract labor at the plant, while noting that the company is “not laying off any direct Boeing Commercial Airplane employees at this time.”
“As we progress in improving efficiencies in our processes, training our entry-level employees, and growing the experience of our team in South Carolina, we expect to continue to reduce reliance on contract labor/industry assist to meet our production objectives,” the statement said. “We’ve said all along that it’s our plan to use direct-hire Boeing employees to perform the statement of work in South Carolina.”
She said contractors have been invited to apply for direct-hire Boeing jobs over the years, and “many have taken that opportunity.”
Eslinger would not be specific about the extent of the cuts.
Despite the curious timing of the cuts, Scott Hamilton of Issaquah, Wash.-based aviation consulting firm Leeham Co., accepts Boeing’s explanation.
“Knowing Boeing, and how Boeing thinks these things through, I don’t have any [more] reason to believe that this was connected to the battery issue than it was part of a larger employment plan,” he said.
He pointed to Boeing executives’ repeated claims of a good learning curve in North Charleston.
“So if you take Boeing’s claim at face value, then it would follow logically that they’re at a point where they can dispose of the excess people just as they’re disposing of the excess people here in Everett,” he said.
A Boeing South Carolina worker said he noticed the cuts beginning a month ago, affecting bunches of contractors at a time.
He interpreted the moves as Boeing following through on its promise to reduce reliance on contractors at the young factory complex, and he said they are more typical of the ebb and flow in the industry rather than a result of the 787’s recent problems.
“It’s ever expanding and contracting,” said the worker, who declined to be identified. “It has to do with the demand at hand, so to speak.”
It was, in part, the tremendous demand for the Dreamliner that drove Boeing to build a second final assembly facility here. But even though Boeing still boasts almost 800 orders for the 787, it hasn’t been able to deliver any since January.
That’s when the long-troubled program hit perhaps its biggest snag yet. In the course of a week, two of the jets experienced smoky battery malfunctions, leading to the global grounding.
In the weeks since, government investigators have been trying to figure out what went wrong while Boeing has been working on a fix. The Chicago-based airframer pitched its plan to the FAA a week ago, but when the planes will be permitted to fly again remains unclear.
Meanwhile, the company has maintained its production plan, aiming to make 10 Dreamliners a month — three in North Charleston and seven in Everett, Wash. — by the end of this year. Boeing South Carolina also began work on the stretch Dreamliner, the 787-9, this year.
Already working amid the uncertainty of the grounding, it appears the local Boeing workforce will also have to continue working more efficiently.
A Boeing employee works on the aft body part of a Boeing 787 Dreamliner in North Charleston last year.×
The thousands of employees and several hundred invited guests cheer last year at the first Boeing 787 Dreamliner that was assembled in South Carolina rolls out of the final assembly plant in North Charleston.×