Propelling an industry

The exterior of Propulsion South Carolina, a new Boeing facility that will make engine inlets for the 737-MAX airplane.

Boeing Co.’s announcement in 2009 that it would build a Dreamliner factory in North Charleston is often called a game-changing event for this area’s manufacturing sector.

But it has proven to be just the starting point for what some analysts say will be an aerospace-based economic cluster that could rival what the company built in Washington state.

“Boeing South Carolina is not a one-trick pony,” said Saj Ahmad, chief analyst for Strategic Aero Research. “Anyone that thinks they are only going to produce the 787 and not much else is very much mistaken.”

On Wednesday, Boeing will officially open its newest facility here that will design and build engine inlets for the 737-MAX — a single-aisle airplane that will be 20 percent more fuel-efficient than any competitor. The first 737-MAX delivery is scheduled for 2017 and air carriers have ordered nearly 2,500 of the model, which will be built in Renton, Wash.

The 225,000-square-foot Propulsion South Carolina facility is in Palmetto Commerce Park in North Charleston near another Boeing plant that makes overhead cabins and interior parts for the Dreamliner. Its debut precedes another Boeing project in the works — an $82 million facility that will paint 787s for customers, scheduled to open in late 2016 on a small portion of 466 acres Boeing is leasing adjacent to its Dreamliner plant alongside Charleston International Airport.

It follows the opening last year of Boeing’s research and technology center, which focuses on advanced manufacturing technology and composite fuselage manufacturing.

Boeing has not said what it plans to do with the rest of its acreage, but Ahmad said it signals a long-term plan much larger than the $1 billion, 7,500-job investment the company has already announced.

“You could argue that with Boeing South Carolina, we’re seeing Boeing replicate the investment and expansion we saw in Washington from the post-war era that finally brought us the 707 in the true jet age,” he said. “Boeing South Carolina has a 50- to 75-year plan and the billions being invested there is just a fraction of the eventual showcase we’ll see decades from now.”

Richard Aboulafia, an aerospace analyst with The Teal Group, is less bullish about Boeing’s long-term plans in the Charleston region, saying it took the better part of a century to build what Boeing has in Washington and that there are too many variables to safely predict what will happen in 20 to 30 years. Chief among those variables is labor and whether Boeing can find a suitable yet cost-efficient workforce to expand its production in South Carolina. Another factor could be leadership changes at the company that take Boeing in an entirely new direction.

The additional acreage does accomplish one important thing, Aboulafia said: It gives Boeing options when dealing with union workers in Washington state.

“It puts the union on notice that they’re going to think about moving new jobs,” he said.

Jack Jones, the retiring vice president and general manager of Boeing South Carolina, told The Post and Courier in December that there were no long-term plans for the company’s vacant land beyond the paint facility and a parking lot.

“The acquisition was 100 percent to create flexibility if we ever need it,” said Jones, who will retire in May and will be succeeded by Beverly Wyse, who led Boeing’s 737 program for five years. “There is no insidious plot to bring a package of work here that nobody knows about. It truly is just there for whenever ... our corporate facility wants to do something here.”

In the meantime, orders for the 737-MAX and a production backlog of about 840 Dreamliners means there will be plenty of work for years to come at Boeing’s plants in North Charleston. And Aboulafia said it wouldn’t surprise him to see Boeing expand its production here to include a single-aisle plane.

Despite the long-term uncertainties, local development officials say they’ve been thrilled with the economic and business profile boost Boeing has brought.

“When you look at Boeing’s comprehensive global presence here, not just the direct manufacturing but the total footprint, you understand immediately this is about as good as it gets for a community,” said David Ginn, president and CEO of the Charleston Regional Development Alliance.

“We have one of the fastest growing aerospace sectors in the nation, and this positive growth multiplier will be felt by all industries and professional services for generations to come,” he said.

In addition to the Dreamliner manufacturer’s activities, Boeing South Carolina is attracting a host of aviation-related industries that want to be near the 787 maker, some of them opening offices here to complement existing operations near Boeing facilities in the Pacific Northwest.

South Carolina’s aerospace industry grew more than 600 percent in the five years after Boeing broke ground on its Dreamliner plant, making this area the fastest-growing aerospace industry in the nation, according to the U.S. Bureau of Labor Statistics. The Charleston area now is home to more than 75 aerospace and aviation-related businesses, according to the Charleston Regional Development Alliance.

The so-called “Boeing effect” helped propel the Charleston-North Charleston metropolitan statistical area to No. 18 in the nation in the percentage of advanced-industry jobs, according to a new report by the Brookings Institution. The advanced-industry sector includes such industries as aerospace, motor vehicle manufacturing, energy and specialized services such as architecture and engineering.

“We’re No. 76 by population, so we’re punching well above our weight class,” Ginn said.

Such industries now account for more than 61,600 direct and indirect jobs in the Charleston region, says the report, and the average annual income for those jobs is $73,340 compared to an average annual income of $44,370 for all area jobs.

Reach David Wren at 937-5550 or on Twitter at @David_Wren_