Aero-space to grow Boeing Co.'s footprint continues to expand in the Lowcountry

Construction continues on the new Boeing propulsion plant, where engine inlet components for the new 737 MAX single-aisle passenger jet will be built in Palmetto Commerce Park in North Charleston. It will open mid-2015.

Boeing's startling decision in 2009 to build its newest jetliner in South Carolina was skewered by some as a huge miscalculation, especially among the rank-and-file in Washington state, home of the company's commercial aircraft division.

Airplane manufacturing isn't for amateurs, and this ill-conceived East Coast experiment was doomed for failure, was the overriding sentiment.

The pointed pessimism has since softened considerably as Boeing has continued to plow more money into its North Charleston operations.

For example, the aerospace giant will invest in a paint facility for the 787 Dreamliner this year at its Charleston International Airport campus. It's also erecting a 225,000-square-foot propulsion center in nearby Palmetto Commerce Park to build engine inlet components for its 737 MAX.

And Boeing hasn't even disclosed yet what it has in mind for about 500 acres it has secured for future expansion across International Boulevard from its 787 factory. All the company has said so far is that it's committed to investing another $1 billion and creating 2,000 more jobs in South Carolina by 2020.

A union official from the Society of Professional Engineering Employees in Aerospace summed up the situation during a recent visit to North Charleston to meet with Boeing workers in North Charleston.

"Boeing is here to stay," spokesman Bill Dugovich said.

The engineers union believes the North Charleston operation will become more seasoned as the local work force matures, especially now that the 787 production rate is finally reaching acceptable levels in North Charleston. The plant, which has been dogged by numerous start-up glitches and delays, completed its first Dreamliner about two years ago.

"I think they will start developing some expertise," said Rich Plunkett, SPEEA's director of strategic development. "They will develop some tribal knowledge."

Boeing watcher Saj Ahmad with StrategicAero Research echoed their remarks.

"This is a 50- to 75-year-plus investment that will see the 787 family built here and develop the business into a specialist hub for composite technology and other materials of excellence," the London-based analyst said.

Boeing makes parts for and assembles the 787-8 in North Charleston. It also makes parts for the longer 787-9 and will start assembling its first "Dash-9" in the fall. A decision on the assembly site for the 787-10, the biggest version of the jet, is expected this year. Ahmad believes the Lowcountry is a shoo-in for production.

"The 787 factory will be expanded in the coming years, not only to accommodate the biggest 787, the 787-10, but also to push ahead with production output," Ahmad said. "Boeing has always envisaged its South Carolina plant to mirror what Everett (Wash.) does."

Workers at the local plant are on target to build three 787s a month by midyear, adding to the seven a month being produced in Everett. In 2016, the production rate will ramp up to 12 a month between the two plants and 14 a month by 2019 to catch up on more than 1,000 Dreamliner orders from 69 worldwide customers. Through April, 144 had been delivered.

Ahmad said the learning curve is still steep for the relatively new factory in North Charleston, but it is catching up.

"The rapid way in which they introduced the 787-9, fell behind on work and then caught it all back up within a matter of months proves that not only is the tenacity there to right any production wrongs, similar to what was seen in Everett, but that Boeing is continually investing in human capital to make the plant a success," he said.

Boeing Commercial Airplanes CEO Ray Conner said during an investors conference Wednesday in Seattle that the 787 has been a "productivity journey," but "we are now moving into a production-stable environment. I think we will see the learning curve come down substantially."

He added that he and Boeing Co. CEO Jim McNerney were in North Charleston recently to check on production gains. Conner said the improvements set up the local plant for the increased production rates over the next five years.

"We feel very, very good about the progress we have made there," he said. "They are doing fabulous work down there."

Ahmad said Boeing's growth in North Charleston is all part of a long-term plan that's still under wraps.

"The investment Boeing is making in North Charleston is not foolhardy," he said. "North Charleston overall is expanding, and the additional land bought will not sit idle. Boeing is taking more proactive, rather than reactive steps to better align the commercial arm of its business to the changing dynamics of labor, expertise, financing and the wider supply chain. That, too, builds on the 'Partnering for Success' program that Boeing is working through now with suppliers to extract better concessions and drive up quality and productivity."

Some of the Boeing construction going on now is tied to its promise in April 2013 to invest another $1 billion and add 2,000 more jobs by 2020.

"It means Boeing is committed to South Carolina and staying in South Carolina for many years to come," Boeing S.C. spokeswoman Candy Eslinger said. "We are investing in our infrastructure and investing in our people, and we are investing in the state."

Some of those jobs already have been added. Others are on the way. About 7,200 employees are at the site now, but some of those are temporary contract workers.

Last fall, Boeing announced some of the engineering work for the new 777X passenger jet, to be built near Seattle, will be done in North Charleston. It also is bringing up to 400 research jobs as part of a "Center for Manufacturing and Technology" that's being established locally. The completion of the 737 MAX plant is expected to add even more jobs by July 2015.

"Boeing is looking at continued expansion, and they see an ongoing demand for their product," College of Charleston economist Frank Hefner said. "They see this as the location to do the expansion because it's a lower-cost environment than Seattle. That's the bottom line. It's a combination of regulations, unions and efficiencies among other things."

As for the Charleston area, the Lowcountry can thank Boeing for largely leading the region out of the steep economic downturn before any other area of the state, Hefner said.

"Boeing is one reason why the Charleston Metro area has replaced all the jobs lost during the recession and the rest of the state is still catching up," he said. "That's why we are the bright spot in the state in terms of industrial expansion. It's a deepening of the aviation industry here, which means it will be more integrated, with more suppliers and more training opportunities for workers."

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