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Originally published October 21, 2009 at 9:53 AM | Page modified October 22, 2009 at 7:24 AM

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Boeing nears decision on second 787 line

Boeing will decide in the next two weeks whether to put a second 787 Dreamliner final assembly line in Everett or in Charleston, S.C.

Seattle Times aerospace reporter

Boeing has narrowed its decision on where to put a second 787 Dreamliner final assembly line to Everett and Charleston S.C., and will make a choice within the next two weeks.

The outcome could have a profound impact on where future Boeing airplanes are built, and the key question appears to be whether the Machinists union will accede to management's demand for a long-term no-strike agreement.

In a conference call with the press this morning, chief executive Jim McNerney said talks with the union are "ongoing and on a regular basis" and said "the tone is constructive."

But McNerney made clear that the company is considering Charleston specifically because of the recent history of repeated strikes by the International Association of Machinists (IAM) in the company's Puget Sound area factories.

"The IAM and the company have had trouble figuring it out between themselves over the last few contract discussions," McNerney said. "I've got to figure out a way to reduce that risk to the company."

"I don't blame this totally on the union," McNerney said. "We just haven't figured out a way. The mix isn't working well. We've either got to satisfy ourselves that the mix is different or we've got to diversify our labor base."

South Carolina is a so-called "right-to-work" state, meaning that employees do not have to join unions even if a workplace is unionized. That leaves labor unions weak compared to states like Washington.

In Boeing's Everett plant, all production workers have to be union members. In Charleston, the workforce recently ousted the union in a decertification vote.

If Boeing were to put a 787 final assembly line in Charleston, it would be beside two other plants that already build two-thirds of the Dreamliner fuselage. More than 2,500 people currently work there, more than a third of them outside contractors.

The addition of a production line for 787 final assembly would establish a complete airplane manufacturing complex on the East Coast, posing a real threat that it could supplant the Puget Sound region as the center for building Boeing's future jets.

In the conference call, McNerney said there is only "modest" additional risk to the 787 program from setting up a new assembly line and trying to operate parallel assembly operations on opposite coasts.

"There would be execution challenges associated with" choosing Charleston, he conceded. "Keep in mind, we have a good-size operation in Charleston today. There would be some duplication. We would obviously work to minimize that.

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"Having said all of that, diversifying our labor pool and labor relationships has some benefits," McNerney added. "Some of the modest inefficiencies associated with a move to Charleston are certainly more than overcome by strikes happening every three or four years in Puget Sound and the very negative financial impact on the company."

McNerney said the ongoing talks with the IAM are confidential and would not reveal details.

The Boeing board meets at the end of the month. The decision is expected then.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

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