Boeing CEO explains why 787 maker is deepening its ‘engagement’ in N. Charleston
Boeing’s top executive said today the company needs multiple options “from which we can draw talent and use capital,” calling that a key reason the planemaker is expanding its footprint in South Carolina.
Earlier this month, Boeing announced plans to invest another $1 billion and add 2,000 jobs over the next eight years in North Charleston. In exchange, the company will receive $120 million from the state and is likely to get generous tax breaks courtesy of the county.
The company makes parts for and assembles the 787 in North Charleston. It also assembles the jets in Everett. Wash.
Asked about the local growth plans today, CEO Jim McNerney said “we see South Carolina as exceeding expectations in terms of its performance to date,” which has prompted the company to “deepen our engagement down there.”
“South Carolina and we have put together a deal that offers incentives to us but asks us to perform against those incentives,” McNerney said during a conference call. “We’re going to need a number of places from which we can draw talent and use capital, so we’re very pleased that South Carolina is moving along as well as it is.”
McNerney also addressed the battery fix for the 787.
The Federal Aviation Administration grounded the plane on Jan. 16 after a pair of smoky battery malfunctions. The FAA approved Boeing’s battery fix Friday, and the company has since begun implementing it on its customer airlines’ 787s while resuming production flights at its factories, including in North Charleston.
Boeing executives said the fix is being rolled out quickly, but they declined to say how much the three-month grounding of its flagship jet had cost.
McNerney said the company has started installing the fix on 10 of the 50 Dreamliner jets that have been delivered to airlines, as well as on nine 787s that are still in production. He said the majority of the modifications will be done next month, which is also when deliveries will resume.
“I think as ‘mods’ go, in the end ... this is not a big one,” McNerney said of the multi-part redesign of the lithium ion battery system. He said the changes to the electrical system are “not rocket science.”
Boeing still plans to deliver more than 60 787s in 2013 with perhaps a fifth of those coming in the spring quarter. Six 787s are on the flight line outside the North Charleston assembly plant, where more than 6,000 people help build the planes.
The discussion with analysts and reporters came after Boeing reported increased earnings per share for the quarter.
The Chicago-based aerospace giant’s earnings per share were $1.73, not counting certain retirement benefits, and $1.44, all told. Revenues were almost $18.9 billion, 3 percent less than the same period last year, a drop explained by only one 787 delivery this year.
Boeing’s commercial airplanes unit booked 209 net orders during the quarter, bringing its backlog to more than 4,400 airplanes valued at a record $324 billion. The company remains confident it can bring in as much as $85 billion this year while delivering as many as 645 airplanes.
Meanwhile, in Washington, the National Transportation Safety Board press forward with its second day of hearings regarding the 787’s mysterious battery issue.
Representatives of Boeing and key battery system suppliers GS Yuasa and Thales were on hand, as well as American and Japanese government regulators.
Check back postandcourier.com later and in Thursday’s newspaper for more details.
Reach Brendan Kearney at 937-5906 and follow him on Twitter at @kearney_brendan.