Local leaders eager to pilot aerospace growth

This could be Charleston's chance.

With Boeing Co. buying Vought's North Charleston manufacturing plant, local business leaders and elected officials statewide see a golden opportunity to bulk up the Lowcountry's budding aerospace industry and restore economic health to what many experts say is one of the recession's hardest-hit states.

In light of waning port business, a crippled real estate industry and an outward trickle of bread-and-butter manufacturing jobs over the past decade, this could be the Lowcountry's shot at becoming another hub of aerospace innovation, joining the ranks of Kansas and Dallas.

Washington's business leaders already have rallied to save their state's aerospace industry and its roughly 650 aviation-related companies, acknowledging the threat that Charleston poses with its business-friendly atmosphere, lower wages and weaker union base.

Boeing's purchase, a $580 million deal with an additional $422 million in forgiveness of previous cash advances, was seen by some in the aviation industry as a precursor to

Charleston landing an additional Boeing facility.

Parts for the passenger jet are being manufactured on every continent except Antarctica, then flown to Boeing's assembly plant in Everett, Wash. But some aviation analysts predict that the company will need a second location where workers can get the delayed plane back on schedule.

Even though Boeing has enough room to accommodate that need in Washington state, some say Charleston has a good chance of becoming the East Coast's only major commercial airplane manufacturing hub.

Crystal ball

Washington-based aviation consultant Scott Hamilton sees how it could evolve.

It would start with Boeing officials' decision to build a multimillion dollar facility to house a second Dreamliner assembly line. A handful of key suppliers would need to open their own Lowcountry operations to support that assembly work. Other suppliers could follow Boeing's lead, choosing to locate production lines or support workers in the Charleston region.

As Boeing grows comfortable with the area, Charleston could contend to land new production facilities for Boeing's soon-to-be-replaced 737 and 777 models. Both airplane production lines likely will need to be running by 2020, and Hamilton predicts that Boeing will locate that work outside the Seattle area.

"This could be a multidecade evolution, but that's how these things work," said Hamilton, who identified San Antonio, Texas, and Long Beach, Calif., as communities also in the running for the second assembly line.

Charleston area business leaders see aerospace as a natural fit for the local economy. A 2005 report listed the aerospace cluster as one of five industry groups that South Carolina should target.

Though Charleston is home to only a handful of aerospace companies, S.C. officials have tried to lure more by offering state-paid training and lobbying resources, said Karen Kuchenbecker of the Charleston Regional Development Alliance, a business-recruitment group.

Growing an economy through the cluster strategy can help a region push forward an entire industry through competition, research and innovation, explained George Fletcher, executive director of competitive growth group New Carolina.

"Think computers in Silicon Valley, movies in Hollywood, autos in Detroit, steel in Pittsburgh," he said.

Call to arms

The Washington state business community knows that Charleston could poach some of its long-standing aerospace work.

A report released earlier this year by the Economic Development Council of Snohomish County pinpoints the Charleston area as a top competitor for aerospace companies, in addition to San Antonio, Wichita, Kan., and Kinston, N.C.

It showed that the average machinist in the Seattle suburb of Everett makes $8,000 more each year than what Charleston pays. Water rates, land prices and electricity costs also come in far below Evergreen State levels.

Boeing's announcement last week sent shock waves through Seattle's business community, which has rallied around saving its aerospace industry.

"This is not a time for hand-wringing, blame or regrets. It's a time for us to buckle down, roll up our sleeves and show that Washington state is determined to remain the aerospace capital of the world," the Washington Aerospace Partnership, a recently created coalition, wrote in response to Boeing's purchase.

While Boeing officials often have looked to locate beyond Puget Sound, the company ultimately has shifted little outside the region. Hamilton, the analyst, noted that founder Bill Boeing told Seattle leaders he would move the company if they didn't build him an airport. Seattle leaders did and even named a portion after him.

"We're pretty used to people trying to take away our companies and our jobs because they're good companies and good jobs," said Bill McSherry, who advises Washington Gov. Christine Gregoire on aviation matters.

Seeing other communities nip at the heels of their aerospace industry, Washington state lawmakers passed $3 billion in tax breaks in 2003 for commercial airplane manufacturers.

That package led Boeing officials to commit to building the 787 in Washington. In South Carolina, such state incentive money also flows freely. Top commerce officials already have visited with Boeing officials at their newly purchased plant, namely to celebrate the Vought deal, but they also likely lobbied for the second 787 production line.

In a statement widely circulated around Washington business circles, Gov. Mark Sanford said his team is willing to do "whatever we can to help Boeing succeed and grow in our state."

Looking ahead

Boeing, which has started evaluating sites for its second line, is expected to make a final decision within six months. Hamilton said he doesn't see earlier production glitches at the Vought-run facility as a deal killer.

The supply-chain problems that long have delayed the 787 airplane's first flight were spread among several companies, he said. Boeing has taken heat for setting up such an ambitious and complicated system without proper oversight.

"There is blame enough and weakness enough to go around for everybody," Hamilton said.

Meanwhile, local officials are likely to get serious about the expensive task of extending the runways at Charleston International Airport.

Economic-development groups have complained that Charleston has been overlooked for competitive aerospace projects because the landing strips aren't long enough. They estimate that a runway of 10,000 feet or more is almost essential to attract another major aircraft manufacturer.

The two runways shared by Charleston International and the Charleston Air Force Base measure 7,000 and 9,000 feet.

Focusing on now

Even if Boeing's purchase last week marks its only investment in the Charleston area, the region still stands to benefit. The Chicago-based company has proven to be a great corporate citizen in other locations, said Barry Waldman, spokesman for Trident United Way.

"Boeing happens to be a company that believes in philanthropy," said Waldman, who estimates that Boeing employees nationally contribute $30 million each year to United Way's campaign.

Simply being able to add Boeing to the region's lineup of recognizable corporate citizens, such as Google, Robert Bosch and Daimler AG, will make it easier to attract new companies in all industry sectors.

"It's good for us as a region, promotion-wise," Dorchester County Economic Development Director Jon Baggett said. "If one's here, it shows others the viability of doing business here."

It also circulates Charleston's name among top executive circles.

"Companies, especially large companies, keep an eye on what their peers are doing," said John Krug, a Charlotte consultant who advises companies on where to locate. "There is a comfort in knowing that a peer company or any large company did due diligence on a community ... and came to the conclusion that that's where they need to be."

Reach Katy Stech at kstech@postandcourier.com or 937-5549.