Boeing Co.’s decision to boost production of its 787 Dreamliner wasn't quick or easy, but the aerospace giant's finance chief said Wednesday it ultimately came down to the plane's growing strength in the global wide-body market.
"It's a big decision for the company when we make these rate increases," Greg Smith, Boeing's executive vice president and CFO, said during the Baird Global Industrial Conference in Chicago.
The rate increase — to 14 planes a month from 12, split between Boeing assembly sites in North Charleston and Everett, Wash. — was announced in September, but the decision was months in the making.
Smith said the process involved examining "the entire supply chain, our own efficiency, what capital we need and when and, ultimately, the marketplace — is the marketplace strong enough to support 14 a month?"
With more than 600 deliveries in fewer than six years of service and close to 700 Dreamliner orders in the production backlog, Smith said Boeing finally had "the confidence to be able to go to 14."
He said next year's introduction of the 330-passenger 787-10 — the largest and most fuel-efficient member of the Dreamliner family — into commercial service "will again draw more demand." The "Dash 10" will be built exclusively in North Charleston because of its size, and Singapore Airlines is scheduled to take the first delivery next spring.
The 787-10 will make its public debut next week at the Dubai Airshow, one of the world's largest aviation events, with one of the North Charleston-made test planes on display for potential buyers. There are currently 177 orders for the jet.
"It's going to be a phenomenal machine," Smith said of the 787-10, which is undergoing flight testing in North Charleston and Washington state.
"There's strong demand for the aircraft and, again, I think it just goes to the fact of what that airplane is bringing to the market," Smith said of the three-model Dreamliner family, which is built of lightweight composite materials. "The efficiency of the 787 compared to what it was replacing or what is available competitively is compelling."
Smith also said Boeing continues to look company-wide for ways to improve productivity and efficiency, continuing an aggressive cost-cutting campaign that began more than a year ago.
"We're resetting the bar on productivity ... really getting our teams to strive to a whole different level of performance," he said.
Those measures have included workforce reductions throughout Boeing, with the company's North Charleston operations — including the Dreamliner assembly campus — seeing a nearly 13 percent cut in workers and contractors over the past year. The local workforce of 6,889 as of Oct. 26 is the lowest figure since Boeing started breaking out its North Charleston totals in 2013.
Boeing also is "really getting deep" in its analysis of whether to build a new, so-called middle-of-the-market plane that would fill a niche for jets bigger than the single-aisle 737 but smaller than the double-aisle Dreamliner.
"We see a market opportunity that's pretty significant, so we're in active discussion with our customers to see if that's a market that's attractive to them," Smith said, adding that any production would not begin until 2024 or 2025.
"We're in discussions with over 50 customers on exactly where this would fit in their fleet, what would it do, what do they need, when do they need it and, then, can we make the business case all come together," he said.
Boeing hasn't said where it would build such a plane if it decides to go ahead with the project, but analysts agree it could benefit North Charleston's campus either as a production site or — if the plane is built in Everett — as the exclusive site for Dreamliner assembly.
Boeing, which chose North Charleston for its second 787 campus in 2009, remains one of the Lowcountry's largest employers. In addition to its Dreamliner facility, the company has a research campus and sites that design and build engine parts for the 737 MAX and interior parts for 787 cabins.