Bringing Boeing to S.C. The Art of the Deal

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Boeing Plant - North Charleston

The Boeing Co. has announced that North Charleston will be home to a new 787 Dreamliner assembly plant, ending a hard-fought contest for the facility that could have instead landed it in Everett, Wash. Boeing announced that it will add to its existing facility at Charleston International Airport where fuselage sections for the Dreamliner are currently constructed.

This momentous scene -- state leaders hugging and crying as Gov. Mark Sanford signed with 10 commemorative pens the legislation that landed Boeing's plant in North Charleston -- came only after six years of patient courtship.

Boeing had considered locating its first 787 Dreamliner assembly line on that chunk of property near Charleston International Airport in 2003. Unable to woo the aerospace giant from its home near Seattle at that time, state business leaders immediately looked toward a second chance.

The tenacious suitor chased its prize at air shows in Paris and London and to hushed meetings in Charleston. The climax arrived Wednesday, with a bold promise made from the Statehouse floor.

Just minutes before the end of that business day, Boeing executives called an unnamed company official as he sat in Sen. Glenn McConnell's office. He shared the decision that jolted Washington state: For its second assembly line, the company had chosen South Carolina.

Olympus to Gemini

When Boeing first took notice of North Charleston, the deal became known as "Project Olympus." According to Charleston County economic development director Steve Dykes, most people involved didn't blame the company for sticking with its Washington roots. The mere consideration paid off later for the Lowcountry, when it attracted Vought Aircraft Industries Inc. and Global Aeronautica to make fuselages for the Dreamliner at the airport site.

"We've kind of known ever since Vought landed here that this was a possibility," Dykes said.

Around the time Boeing took over the Vought plant last summer, Commerce Secretary Joe Taylor called Dykes to notify him that "Project Gemini," or the second assembly line, had been activated.

While readying the site for Vought years earlier, the Commerce Department's project manager, Jack Ellenberg, had made sure to get the entire property permitted just in case. Then he and Dykes and others called on Boeing at the European air shows to ask, like an attentive server, if the company needed anything.

Ellenberg, who worked to bring BMW, Michelin and Google to South Carolina, supposes that part of South Carolina's appeal came from its consistency.

"Companies can pick up the phone if they have a question," Ellenberg said. "They know who's going to answer the phone."

When in August Boeing officials asked if they could have permits ready by Oct. 30 for an assembly line in North Charleston, Ellenberg could tell them he had been ready for years.

As Boeing's intentions became clear, Ellenberg and Taylor began regularly meeting with Charleston business leaders, including everyone from the obvious economic development players to tourism officials. About 30 people convened at each meeting, bound not to disclose what unfolded inside.

"What we wanted people to do was to not necessarily talk about the company, but to talk about positive things here," Taylor said. "When people's neighbors or co-workers had questions, we wanted to make sure there were enough people out there to say we're working this hard."

Game of trust

South Carolina had laid a foundation, yes, but its sturdiness remained untested.

Greenville attorney and former federal judge Billy Wilkins heard concerns from state lawmakers that Boeing planned to use South Carolina only as leverage against Washington state and the union that represents its production workers there. The International Association of Machinists last year staged an eight-week strike in the Seattle area that compounded delays that had been dogging the 787 program for two years.

Wilkins relayed that conversation to a top Boeing executive he knew personally and then set up a meeting at his firm's law office in Charleston. Sen. Larry Grooms, a Bonneau Republican, said that gathering at Nexsen Pruet about two months ago marked a turning point.

Boeing officials "shared with us that they had some concerns over the stability of government in South Carolina," Grooms said, alluding to the then-recent news of the governor's extramarital affair in Argentina. "They expressed some dissatisfaction."

Although Wilkins would not explain his Boeing connection, he served as chief judge of the 4th U.S. Circuit Court of Appeals, and the company's general counsel served on the bench. Another Nexsen Pruet attorney, Leighton Lord, said his firm began working with Boeing more than a year ago to represent the company in its takeover of the Vought portion of the fuselage plant.

"People were worried about the governor, and people were worried about a lot of things going on in our state for a couple of months," Lord said.

Then lawmakers rallied and did so without publicity, and the game changed.

Boeing officials "were really kind of taken aback by it," Lord said. "I don't think they were used to it."

Following the Charleston meeting, the Boeing discussions turned daily among involved lawmakers. They also started an active dialogue with the Commerce Department.

Sanford drew on a personal connection to Boeing Chairman Jim McNerney. The two had developed a business relationship decades earlier, thanks to McNerney's friendship with first lady Jenny Sanford's family in Chicago, where the aerospace giant is now headquartered.

Meanwhile, without knowing the story playing out behind the scenes, local machinists at the existing North Charleston plant voted to sever ties with the union that walked out on Boeing for eight weeks last year in Washington.

The leader in the local movement, Dennis Murray, said the timing had nothing to do with luring a factory, only that the labor contract with Vought ended when Boeing took over.

"It wasn't until we were well into this that we heard about a second assembly line," Murray said. "That was never a factor. We were being totally selfish. We were fighting for ourselves."

As he put it, "Boeing unknowingly helped us." But some would argue that the workers unknowingly helped Boeing make its choice.

Crunching numbers

Of all the leaders standing behind Sanford as he signed the incentives legislation Friday morning, none received as many hugs and handshakes as Senate Finance Committee Chairman Hugh Leatherman, a Florence Republican. At the meeting between Boeing and lawmakers, one company official had singled out Leatherman and Senate President Pro Tem Glenn McConnell, a Charleston Republican.

Leatherman remembered the Boeing representative saying, "I want to look the two of you in the eyeballs" as they discussed the potential factory.

A few weeks after the meeting at Nexsen Pruet, Leatherman met one-on-one with the Boeing representative to talk further. He and McConnell reconvened at the Renaissance Charleston hotel on Wentworth Street that Saturday morning.

McConnell remembered a few residents stopping by their table near the lounge window to joke about state business taking place. He thought, "Little do they know, this is big state business."

Without placing an order, the two senators looked at spreadsheets and talked numbers for an incentives package that could lure big business without hurting the state financially.

Days later, Leatherman left on an economic development trip to Japan but remained in e-mail communication with his Boeing contact.

A few days back in the country, he had a meeting at his Senate office Monday night.

Leatherman said there they ironed out an incentives package and then brought in their attorneys for a few more hours. As midnight neared, they had reached an agreement.

Their $450 million proposal was tentatively approved on a unanimous vote Tuesday in the Senate. It got final approval Wednesday and, in unprecedented time, moved to the House, which also gave its unanimous approval.

No one knew Boeing's final decision until McConnell, Leatherman, House Speaker Bobby Harrell, a company official and four attorneys met in McConnell's office shortly before 5 p.m. Wednesday. The Boeing representative took a call from top executives that sent lawmakers rushing to the Senate floor.

McConnell said Boeing representatives sat in the balcony but requested anonymity. As he stepped to the podium, McConnell said he thought, "The members can read our faces. We don't have to utter a word."

Reach Allyson Bird at abird@postandcourier.com or 937-5594.