Post and Courier
September 23, 2014

S.C. ‘right in the mix’ for Boeing 777X work after union rejects contract, lawmaker says

Posted: 11/14/2013 03:57 p.m.
Updated: 11/14/2013 05:44 p.m.
By Warren L. Wise

Now, the competition begins on where Boeing will build the 777X jet.

The machinists union’s decision late Wednesday to resoundingly reject an eight-year labor agreement with Boeing in Washington state puts South Carolina in contention to land production work on the new passenger airplane, a leading state lawmaker said Thursday.

“It gives us an opportunity to contact Boeing and make our case, and we will be going after this as hard as we can,” House Speaker Bobby Harrell told The Post and Courier.

He called the union vote “a very bad decision for Washington and a very good move for South Carolina. That puts us right in the mix.”

Harrell, like state Senate Finance Chairman Hugh Leatherman, was heavily involved in state incentive deals to lure Boeing to South Carolina in 2009 and again in April when the aerospace giant promised 2,000 more jobs and another $1 billion investment in return for $120 million in inducements.

Also like Leatherman, Harrell said no one from Boeing contacted the state recently seeking incentives to build the 777X plant here.

“They weren’t talking to anyone other than Washington state,” Harrell said. “The union vote changed all of that. The building of the 777 will now be a very competitive battle between several states.”

Asked if the state has the money to offer another multi-million-dollar incentive package, Harrell said, “The first thing we have to do is find out what it will take. Our goal will be to make it happen.”

Leatherman expects the race to win Boeing’s new airplane to be extremely competitive, but he said South Carolina is in a great position to negotiate.

“I can assure the whole world we will be going after the 777X or any part of it just as hard as we can,” Leatherman said. “I feel confident that Boeing will give South Carolina due consideration. Boeing likes that we are right-to-work state, not a union state.”

Other locations mentioned as possible alternatives for the new jet’s production include Long Beach, Calif.; Salt Lake City, Utah; and Huntsville, Ala. All of them already have Boeing plants. An internal Boeing analysis cited by The Seattle Times said those were the leading contenders, not South Carolina. Calls and emails to development officials in those cities elicited no responses Thursday.

Harrell is confident the Palmetto State holds the advantage over competitors.

“We have a proven track record,” he said. “We have made commitments to (Boeing) twice, and they are happy with them and very happy with our work force.”

Harrell said both he and Leatherman have been in contact with a Boeing official this week and expected to have further talks.

“We made it very clear we are interested,” Harrell said.

Boeing has not said when it must make a decision on a site location to have the plant ready for production by 2017 or 2018 and a first flight by the end of the decade, but it is already selling the planes and expects to officially launch the jet during the Dubai Air Show that starts Sunday.

Disappointed Washington Gov. Jay Inslee and other politicians hoped the two sides would return to the bargaining table to resolve their differences, but Boeing said that’s unlikely.

“There are no plans to re-engage with the union regarding contract negotiations” until before the current contract ends in September 2016, Boeing said in a statement.

Aviation analyst Scott Hamilton of Washington state said Boeing’s comment doesn’t say it won’t enter talks with the International Association of Machinists.

“Boeing chooses its words very carefully,” he said.

Hamilton expects pressure from Washington state politicians for the two sides to come to an agreement since the state has offered Boeing $8.7 billion in tax breaks to build the 777X there.

As Boeing shops the plane around the country, he believes another state will be hard-pressed to offer the same incentives.

“I think it’s too early to rule Washington out entirely,” Hamilton said.

Nevertheless, he believes the union vote knocked Washington state down to the lower tier of competitors.

“The business case says build it (in Washington state),” Hamilton said. “It all comes down to the relationship with the union.”

Asked Thursday if South Carolina was in the running for 777X production beyond design work after the union voted 2-1 against the proposed labor contract, Boeing South Carolina spokewoman Candy Eslinger said, “No decision has been made.”

Late Wednesday, Washington’s governor said Boeing assured him the Evergreen State was still in the running, but it will have to compete with other states.

While the effort to lure Boeing’s new plane production has been very public in the Pacific Northwest, it’s been the polar opposite in South Carolina.

Gov. Nikki Haley hasn’t said a word about any efforts she is making to land production of the new aircraft in South Carolina. The Commerce Department has been mum as well.

Boeing is buying 267 acres beside its 787 Dreamliner campus at Charleston International Airport for undisclosed future expansion. A paint facility for the 787 may be announced soon for a small part of the property. Currently, Dreamliners are flown to Texas for their final coatings.

“An announcement will be made very soon,” Boeing South Carolina top executive Jack Jones said Tuesday after a ground-breaking ceremony for a new jet propulsion factory in North Charleston for the 737 MAX.

Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.