S.C. lands sought-after Boeing plant

By John P. McDermott and Yvonne Wenger - The (Charleston) Post and Courier

NORTH CHARLESTON -- North Charleston snatched a Boeing 787 aircraft assembly plant away from the nation's aviation hotbed Wednesday, prevailing in a fiercely sought-after deal that thrusts South Carolina onto the cutting edge of aircraft manufacturing.

Boeing said Wednesday it will build the new line at its Charleston International Airport property instead of Everett, Wash., the longtime nerve center of its commercial airplane business.

The decision was announced after state lawmakers wrapped up a two-day special session in Columbia to amend a law that would extend benefits for jobless residents. While they were at it, they also approved a rich basket of financial incentives for Boeing valued by state Sen. Hugh Leatherman, a Florence Republican who heads the Senate Finance Committee, at $450 million.

The aerospace giant would have to create at least 3,800 jobs and invest more than $750 million within seven years to take advantage of the various inducements.

Tim Coyle, vice president of Boeing Charleston, said the company plans to break ground on the 584,000-square-foot expansion near its existing factory within the next few weeks. Work on the first locally made 787 Dreamliner is expected to begin in 2011.

Boeing had said previously that its stormy relationship with the International Association of Machinists was a key factor in its decision to look beyond its highly unionized operation in Washington. Last year, the IAM staged a damaging eight-week strike in the Seattle area that compounded the delays that have been dogging the 787 program for two years.

The company began taking a hard look at building the second line for its newest jet in North Charleston in August, meaning that the Dreamliner plant went from a dream to a reality in less than three months, said Senate Pro Tem Glenn McConnell, R-Charleston.

It wasn't South Carolina's low unionization rate, the incentive deal or any other single factor that sold Boeing, McConnell and Leatherman said.

Coyle agreed, saying Boeing considered the business environment, logistics and the infrastructure in North Charleston and Everett.

“Being able to deliver on schedule, the company decided two sites were better than one,” Coyle said.

Leatherman said he expects the company to exceed its job and capital investment projections, not fall short.

Gov. Mark Sanford said he will sign the incentive legislation.

The deal comes at a time when unemployment is near a record high in South Carolina, with the recession manufacturing been particularly hit hard by the recession.

Boeing also could give a big kick to small but promising industry for South Carolina, with many officials likening the prize to the BMW car plant that opened in the Upstate 15 years ago.

“Just as the similarly monumental BMW investment catalyzed a now extensive automotive presence across South Carolina more than 15 years ago, we believe Boeing landing decisively in North Charleston will spur on an already growing aerospace hub in our state,” Sanford said in a statement.

North Charleston Mayor Keith Summey called the Boeing deal “wonderful.”

“It's the reversal of the shipyard closing,” Summey said, referring to the gradual shutdown of the Charleston Naval Base in the 1990s.

Doug Woodward, director of research and an economics professor at the University of South Carolina's Moore School of Business, said the Boeing expansion will have a huge impact on the state by raising its global profile.

“Boeing is one of those rarefied companies which everyone knows and recognizes as a leader in the field, and to have that in South Carolina is an intangible benefit aside from jobs and income generated,” Woodward said.

“It will help sell our state to other companies ... and I think it will put Charleston on a lot of people's lists of the hottest places to be in 2010.”

The launch of the cutting-edge 787 — Boeing's first new jet in more than a decade — is being watched closely within the aviation world. Unlike most large commercial airplanes, which are made from aluminum, about half of the Dreamliner's structural components are a mix of epoxies and strong lightweight composite materials, such as graphite and carbon, to cut fuel consumption.