X factor: Buzz builds about Boeing’s revamped 777
When Boeing CEO Jim McNerney talks about where his company might build its next new jet, people listen. Because just a few carefully crafted words could hint at billions of dollars of investment and thousands of jobs for some lucky locale.
That was the case last week when, during a quarterly teleconference, McNerney offered both an intriguing update on the 777X, an overhaul of Boeing’s twin-aisle moneymaker, and more praise for the fast-developing North Charleston 787 complex.
Boeing has built the 777 in Washington since before its launch almost two decades ago, but McNerney said the company hasn’t yet decided where to make the 777X or its most important parts.
Meanwhile, Boeing has big, open-ended growth plans for South Carolina, including investing another $1.1 billion and hiring another 2,000 people while expanding its physical footprint by hundreds of acres.
“We have figured out by and large what airplane to build,” McNerney said when asked about the 777X, specifying new engines, a modified fuselage and composite wings. “And so the question then becomes, and we’re sort of in the middle of the assessment now, where to assemble it and where to build the major components.”
“Obviously, Everett is doing one heck of a job right now building the current 777 model, and so it would obviously be an attractive place to consider for the assembly for the next 777 model,” he continued. “The composite wing, we have to think through, as in the case of assembly, where we do that.”
Minutes earlier, McNerney said the North Charleston operations are “exceeding expectations” and alluded to the plans “to deepen our engagement down there.”
“We see tremendous growth in front of us for the next couple of decades, and we’re going to need a number of places from which we can draw talent and use capital,” he said. “So we’re very pleased that South Carolina is moving along as well as it is.”
Speculation about a connection between the two story lines began almost immediately.
The Wall Street Journal parsed McNerney’s words for an indication of whether 777X design work as well as production could leave Everett, floating North Charleston as a possible competitor. Aviation Week noted Boeing South Carolina already has begun diversifying beyond the 787 to some 737 MAX nacelle composite work.
The decision timeline only seemed to move up this week when Boeing announced it is “taking the next step on 777X by engaging customers on technical, pricing & schedule details of the airplane.”
Could Boeing make the 777X or some portion of it in North Charleston?
It’s still early to connect the dots, according to analysts. But it’s a possibility.
One of the 777X’s most notable features, extra-long composite wings, are based on the 787’s, according to McNerney. While Boeing doesn’t make the 787 wing in North Charleston, the local plant makes all 787 aft-fuselage sections from lightweight composite materials and connects the wings to fuselages as part of the final assembly process.
And while Boeing South Carolina has been a pure 787 operation, the company recently announced plans to move substantial information technology work to North Charleston and began the process of bringing 737 MAX engine inlets here, a company spokeswoman said this week. The spokeswoman declined to speculate on the possibility of 777X work coming to South Carolina.
Then, there’s the 320 acres by the airport Boeing has agreed to buy for $12.5 million.
It’s also important to remember, however, that McNerney made a similar statement in summer 2011 when Boeing was considering where to build the newest 737.
“The good news is we have options,” McNerney said, a few months before the company committed to keeping the 737 line in Renton, Wash., as part of the grand bargain that also resolved a union dispute with the National Labor Relations Board.
And, of course, Boeing South Carolina is plenty busy with its primary task: making the 777’s wide-body sibling, the 787. The Dreamliner is coming off a three-month grounding due to a battery problems, and in addition to incorporating the fix, the factories are building a new plane model, the 787-9 extended Dreamliner.
According to Saj Ahmad, a London-based analyst with strategicaeroresearch.com, it’s almost guaranteed that 777X final assembly will remain in Everett.
“Boeing is not going to jeopardise the 777 line from a cash cow to a loss maker by moving it somewhere else,” he wrote in an email Thursday.
“SC could however provide composite parts for the 777X wing — or the entire wing itself,” Ahmad continued. “The issue is logistics. Transporting a pair of massive wings from one coast to the other will be hugely expensive. To that end, SC may well sit out any major aerostructure work on the 777X and instead concentrate on becoming a centre of production excellence on the 787 program.”
Addison Schonland, a Baltimore-based expert with the Innovation Analysis Group, said Boeing is smartly seeking leverage when it comes to building the fuel-efficient, long-range 777X, which Boeing says will enter service by 2020. He said “one of the great benefits of having a factory in Charleston is they now have that ability to play these sites against each other to extract the maximum value.”
“We’re not aware of anything for real,” Schonland said of the 777X North Charleston speculation, “but having announced the fact that they’re going to offer this airplane, the great game starts again.”
Spokesmen for Gov. Nikki Haley’s office and the state Commerce Department didn’t respond to questions Thursday about how the possibility of 777X work could related to the newly signed incentive package. In a statement released Wednesday, Washington’s governor was clear about where he hopes the 777X work will be done.
“I hope the Legislature will agree and prioritize investments that support our efforts so that we can clearly demonstrate to Boeing that there is no reason to consider any place other than Washington to build the 777X,” Gov. Jay Inslee said.
Reach Brendan Kearney at 937-5906 and follow him on Twitter at @kearney_ brendan.