Boeing buying more land; footprint to triple in North Charleston; new 787 paint facility coming
Boeing will nearly triple its footprint near Charleston International Airport with the acquisition of even more land than expected in a $49 million deal announced Friday.
Boeing South Carolina timeline
2003: Boeing announces 787 program and, after a naming contest, calls it the Dreamliner.
2004: The 787 program is launched with a record order from All Nippon Airways of Japan.
2005: Vought Aircraft Industries and Global Aeronautica (a Vought-Alenia Aeronautica joint venture) begin construction of their 787 aft- and mid-body factories near Charleston International Airport. Boeing gives the 7E7 its official model designation number: 787.
2006: Vought-Alenia facility opens in North Charleston.
2007: The 747-400 Dreamlifter delivers the first 787 major assemblies to Global Aeronautica in North Charleston. The 787 program opens its final-assembly plant in Everett, Wash. The first 787 rolls out of the factory in Everett. Boeing postpones the first flight, the first in a rash of postponements that would dog the program and inspire an unflattering nickname: the 7-Late-7.
2008: Boeing buys Vought's interest in Global Aeronautica. The first Dreamliner delivery out of Everett is delayed by supply-chain and other problems.
2009: Boeing buys Vought's North Charleston facility and picks North Charleston as the site for its second 787 final assembly line. Boeing also buys out Alenia's interest in Global Aeronautica, leading to an all-Boeing site at Charleston International. The 787 flies for the first time from Paine Field near Seattle. Members of the International Association of Machinists vote to disband their union at the North Charleston plant.
2010: Boeing selects site in Palmetto Commerce Park for 787 interior production.
2011: The first 787 delivery is postponed due to software and electrical updates following an in-flight fire. Boeing opens the final assembly plant in North Charleston, and work on the first South Carolina jet begins. Boeing's Washington plant delivers the first 787 to Japan's All Nippon Airways, three years late.
2012: Boeing's local interiors factory begins production off Ladson Road. Boeing South Carolina rolls out its first Dreamliner and flies it for the first time. A General Electric engine mounted on a 787 fails during a test run in July at Charleston International Airport, prompting inspections and a federal safety investigation. Boeing's first South-Carolina-made commercial jet is delivered to Air India on Oct. 5. In December, Boeing announces plans to buy more than 300 acres at Charleston International. The acreage was later reduced to 267.
2013: Boeing grounds the 787 for three months after battery fires on separate planes. Boeing breaks ground Nov. 12 on the new 737 MAX engine components plant in North Charleston beside its interiors fabrication factory. The machinists union in the Pacific Northwest on Nov. 13 rejects the labor contract that would have ensured production of Boeing's new 777X jet in Washington state. The company asks other states, including South Carolina, to submit proposals by Dec. 10 deadline. Boeing renews talks with the union on a new labor agreement the same day states' bids are due. On Dec. 13, Boeing, through an arm of the state Commerce Department, closes on the purchase of 267 acres across from its 787 campus. It also is buying 200 additional acres from private landowners, nearly tripling its footprint at Charleston International.
The land purchase comes one day after the Chicago-based aerospace giant announced hundreds of new research jobs for the Charleston area. Analysts believe the land deal paves the way for Boeing to eventually move all 787 production to North Charleston.
Read the latest on Boeing South Carolina in a question-and-answer overview. In News
Boeing declined to comment on the speculation.
"This expansion makes future growth in North Charleston possible," said Jack Jones, vice president and general manager of Boeing South Carolina. "While we expect to begin the permitting process immediately for this property, we have no specific plans for the land other than where we will locate the new paint facility."
In addition to the new 230,000-square-foot structure to paint finished Dreamliners in customers' colors, Boeing will also add a fully equipped fire station.
The new 10,000-square-foot fire station will sit on its main campus behind the welcome center. It will be completed late next year.
Also, a second autoclave will be added in 2016 to support aftbody composite fabrication. An autoclave is a pressure vessel used to process parts and materials which require exposure to elevated pressure and temperature.
"Our commitment to South Carolina is visibly demonstrated every day as our growth and expansion continues," Jones said. "I don't expect that ending anytime soon."
In addition to the 267 acres the Chicago-based aerospace giant is acquiring beside its 264-acre, 787 Dreamliner assembly plant, Boeing will add another 201 acres with the purchase of the former Trailwood Mobile Home Park and wooded acreage across from Glynn Terrace subdivision.
Boeing, through an arm of the state Commerce Department, is paying $13.8 million for the 267 acres Charleston County Aviation Authority is selling at the airport. The additional 201 acres is being bought from Truluck Properties for $35.2 million. Both land purchases are through a long-term lease with Palmetto Railways, a division of the Commerce Department. Boeing has the option to buy all 468 acres when the lease expires in 2027.
The land deal and new buildings are part of the $120 million in incentives awarded to Boeing in April in return for a $1 billion additional investment by the airplane maker by 2020.
"The Aviation Authority is very pleased with the arrangement, and we look forward to continued success with Boeing and working with them in the future," Aviation Authority Executive Director Paul Campbell said.
The Aviation Authority has about 488 other acres available at the airport should Boeing decide to expand further in the future.
Though not part of Friday's announcement, Boeing will also undertake an extensive mitigation effort to address wetlands on the property along International Boulevard included in the 267-acre deal. About half of that acreage is considered wetlands. Other wetlands exist at the former mobile home park.
Boeing is buying property throughout the Lowcountry to make up for the wetlands it will fill near the airport. The replacement land will be placed in conservation easements, Eslinger confirmed.
A more detailed wetlands mitigation plan will be announced in January, she said.
Aviation analysts said whatever Boeing intends to do with the property it is collecting, its presence in the Lowcountry is going to expand.
"The long-range plan at Boeing is to shift all 787 production to Charleston," said aviation analyst Saj Ahmad with StrategicAero Research in England. "You don't buy that much land and do nothing with it. It's only a matter of time before all 787s emerge from Charleston."
He said the "teething issues" affecting production on a revolutionary airplane will be worked out, and "Boeing will not allow its Charleston investment to be a one-trick pony."
Boeing is not expected to announce where the 787-10 will be built until next year, but Ahmad said it's a no-brainer that the biggest version of the Dreamliner will be constructed completely in North Charleston.
"The sheer size of the jet means that it won't fit in the current Dreamlifter," he said in an email, referring to the size of the 787-10's fuselage. "I see no logical business, economic or strategic benefit of it being anywhere other than in Charleston. There has to be a pretty big disaster production-wise for Boeing to look elsewhere. As it stands, the 787-10 is Charleston's to lose."
Aviation analyst Scott Hamilton of Leeham Co. in Washington state said he believes North Charleston is sitting pretty for 787-10 production and the local Boeing campus will one day rival the company's massive operation in Everett, Wash.
"That's going to be built down there," he said, referring to the 787-10 in South Carolina.
The production of other aircraft could follow in decades to come, he said.
"It's obvious Boeing plans to continue growing Charleston," Hamilton said. "Whether that happens sooner or later is dependent on what happens with the 777X. Over the next 10 or 15 years, Charleston is going to continue to grow. In the next 25 to 50 years, Charleston could be equal to or greater than the size of Everett."
Everett, Wash., is the hub of Boeing's commercial airline industry, including the original production site of the 787.
Hamilton said he believes the next new airplane, a replacement for the 757, will be built in Charleston when the current plane ends service by 2030.
Other aviation analysts hailed Boeing's acquisition of more land as good news for the Charleston area.
"It is only a great thing for South Carolina that Boeing is looking to take more land and increase the size of that campus," said aviation analyst Greg Raiff, CEO of New Hampshire-based aviation consultant firm, Private Jet Services.
"Strategically, it would be a wonderful thing for South Carolina if it were the only place in the world you built a 787," Raiff said.
Aviation analyst Richard Aboulafia of the Teal Group of Virginia agreed.
"It shows a commitment by Boeing, and that's great for Charleston," he said.
Boeing's 787 final assembly plant in North Charleston was built to accommodate future expansion, Eslinger said.
Aboulafia said he thinks the 787-8, which is currently built in North Charleston and Everett, will eventually be phased out in favor of the new 787-9 and 787-10.
Boeing already makes parts for the 787-9 in North Charleston, but final assembly happens in Washington state, Eslinger said. The 787-10 has not started production, but it will be the largest airplane in the class with a seating capacity of 330 when it's first delivered in 2018.
"I don't think the 'dash 8' will survive the introduction of the 'dash 9' and 'dash 10,'" Aboulafia said. "It's more likely to get phased out."
As for production of the 777X, Boeing's new twin-engine, more fuel-efficient 777 model, Boeing continues to wrangle with the machinists union in the Pacific Northwest over its location.
Union leadership rejected a proposed new contract offer from Boeing on Thursday, pouring water on Washington state's hopes of landing the lucrative deal that could generate 8,500 jobs in a $10 billion investment. Boeing maintains the offer has not been withdrawn, and it's in the union's hands to accept or reject.
The main sticking point with the International Association of Machinists is the loss of its traditional defined-benefit pension. Boeing wants to replace it with a 401(k)-style defined-contribution savings plan.
The revised proposal presented Thursday also withdrew an earlier offer to dramatically slow wage growth for new hires. The new offer would have kept in place the current rate at which employees rise to the top of the pay scale.
The offer comes after the union soundly rejected Boeing's first offer in November by a 2-to-1 margin.
That led Boeing to open bidding for the 777X to sites across the U.S. More than 54 sites in 22 states, including South Carolina, submitted proposals, the company said Thursday. Boeing is expected to start winnowing them down over the weekend.
Boeing announced in November some of the engineering work on the 777X will come to North Charleston as well as three other sites across the U.S.
Boeing hopes to start construction on the new 777X plant in November 2014 with airplane assembly in 2016 and the first flight by the end of the decade.
The company said it will make a decision on site selection early next year, but a new deal with the union would sideline other states' bids.
Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.