Expert puts area out front

A Boeing 787 stands in the paint hangar at the company's facility in Everett, Wash.

The Charleston area could be in the pilot's seat for Boeing Co.'s second production line of its new 787 jetliner, a prospect that could mean hundreds or thousands of jobs and the spawning of a minor aerospace industry hub.

"Right now, I think Charleston would be the favorite location," said Scott Hamilton, a Leeham Co. aviation consultant based in Washington state.

Boeing has said it is considering a second full-scale assembly line for its long-delayed Dreamliner passenger plane but hasn't made any decisions about locations.

Hamilton ranked Charleston above Everett, Wash., where Boeing builds commercial jets, because two factories that already supply key parts for the 787 are located at the Charleston International Airport.

He also noted that the airport has ample land for an assembly plant and that the region offers lower business costs than the Northwest.

San Antonio is in the running too, Hamilton said. Long Beach, Calif., is the wild card.

"We understand that Southern states have economic advantages over Washington state," Hamilton said.

"Here in Washington there's a love-hate relationship with Boeing. It's proud to have Boeing here, but every year Boeing goes to the legislature to benefit Boeing. Some believe it doesn't deserve anything more."

The Lowcountry lacks Washington's deep pool of skilled aerospace workers. It also would have to build a facility like the one now in place in Everett, Hamilton said.

Economic development officials don't comment on negotiations with companies such as Boeing, but the South Carolina Commerce Department this week said it's eager to work with the company.

"We are committed to continuing to develop the assets and workforce necessary to allow Boeing to grow and continue to be successful in their North Charleston manufacturing operations," S.C. Commerce Secretary Joe Taylor said in a statement.

"We have certainly been lobbying Boeing for a long time," said U.S. Rep. Henry Brown, R-S.C., who has toured a 787 supply plant in Singapore and plans to meet with the company's president in Washington, D.C., next week.

Boeing's announcement this week that it is paying $580 million to buy the Vought Aircraft Industries fuselage plant at Charleston International looks like a good sign, Brown said.

"We've been encouraging Boeing to look at Charleston for more of the assembly plants, to bring as many jobs as possible," he said. "Charleston is such a beautiful spot, and the management of Boeing really likes Kiawah."

Washington state has been worried about losing any of its Boeing investment or jobs to the Southeast for a while. This year, the Snohomish County Economic Development Council commissioned a $250,000 study on what the Seattle suburb needed to do to keep Boeing there.

Released in April, it's the kind of study that usually is done to attract an industry, not retain one, said Frank Hefner, College of Charleston economist.

"It's a standard analysis: If we don't do this, we will lose if not all the industry then big chunks of it," he said. The study compared the Seattle area to Charleston and other potential sites that are trying to attract the aerospace industry.

And Charleston loomed big as a potential threat to the Seattle region.

"It was a look at what's happening in the Southeast, and you all are pretty aggressive down there," said Deborah Knutson, president of the Snohomish Economic Development Council.

The study came in the wake of labor troubles at the Boeing plant in Everett, and after the company decided to break from tradition and outsource most sections of its new jet to companies outside the Northwest, such as Vought.

Sign up for our new business newsletter

We're starting a weekly newsletter about the business stories that are shaping Charleston and South Carolina. Get ahead with us - it's free.


Although now headquartered in Chicago, Boeing has been a mainstay of the Seattle economy for 93 years.

"There are those who say we need to do more to make the state a better business climate, and that's what the study was about," Hamilton said.

The study said Washington has lost aerospace jobs to states with lower operating costs and subsidies, such as tax incentives.

It characterized as a key loss the Global Aeronautica assembly plant, built in North Charleston across from Vought, which works with a majority of the 787 mid-fuselage sections. Last year Boeing acquired half of Global Aeronautica.

The study said Washington's advantages are its existing aerospace employees and labor force, tax rates, research and development talent, and quality of life. It disadvantages include higher wages, poor labor relations and high costs of living.

"The frequency and high costs of work stoppages, fairly or unfairly, reflect negatively on Washington," the study said .

Aerospace manufacturing provides 86,000 jobs and $5.4 billion in payroll to the Seattle region, largely because of Boeing and offshoot industries.

"We sometimes take them for granted and we just can't," Knutson said. "Sometimes you just have to step it up a little bit to make sure they know they're welcome here."

Hamilton, the aviation analyst, described the Vought acquisition as a game-changer, saying it will be a major factor in what Boeing decides.

"Charleston is responsible for 73 percent of the fuselage on the 787," he said. "If you have 73 percent of the fuselage there anyway, you will save yourself some shipping costs. That will be a major consideration."