As the clock passed midnight on the East Coast last night, the Seattle Times reported that negotiations between Boeing and the IAM had broken down, all but assuring that Charleston would take joint custody of Boeing’s 787 final assembly operations.
An announcement, thought to be days – if not hours away, say program sources – will finally bring to a close the “will they, won’t they” discussion. Boeing is set to make a decision that could represent not only an existential transformation in its nearly century-long history, but a seismic shift in the North American commercial aerospace industrial center of gravity.
The last time Boeing opened a new commercial final assembly operation, it was in Everett for the 747 in the late 1960s.
Not to mention, a second 787 line might be the biggest positive economic deal this country has seen after a recession that began just days after the IAM authorized its strike in September of last year.
South Carolina’s silent treatment of the competition is quite telling in comparison to that of Washington state, which as a century-old hub of aerospace expertise has had to awkwardly justify its existence. Washington state, for all its logistical and technical advantages, couldn’t override the one political roadblock that dominated Boeing’s thinking.
The hushed tones of Charleston County Airport Authority meetings and the mystery economic incentives passed by the South Carolina State Senate finance committee only served to reinforce the “worst kept secret” approach to the Lowcountry’s bid for the 787 line.
The $170 million economic incentive package, passed yesterday out of committee, would exempt manufacturers from the state fuel tax for test flights and transporting aircraft. The package known as Project Gemini, after the Zodiac symbol ‘Twins’, didn’t name Boeing, but then again, it didn’t have to.
The silence from Charleston, one senior executive says, is a quiet confidence created by a document known as the Master Charleston Campus Plan. Those who have seen it say it outlines a massive expansion of the Boeing Charleston site including a final assembly line, delivery center, flight line and paint hangars. The plan is so compelling that the US Senators who quietly visited Boeing Charleston earlier this fall, and the normally vocal Mayor of Charleston, have virtually remained silent on the matter.
The reality is that Charleston has not always been the front runner for the 787 line. In 2007 and 2008, Charleston, it appeared, could do no right. Cash-strapped Vought sharing responsibility with Alenia Aeronautica at Global Aeronautica was nothing short of a crippling bottleneck for the program. Poor workmanship, arbitrary processes and an unstable design and oversight by omission did nothing to untangle Boeing’s ability to manage the program. Boeing would eventually be forced to purchase 50% of Global Aeronautica in March 2008. Charleston was the last place Boeing wanted to lay down its roots.
Yet, as Boeing began to come to grips with the management of its global supply chain, coupled with the cost of doing business in Charleston with partners with their own bottom line to bolster, Boeing began to see the existing arrangement as a losing proposition. Negotiating the incorporation of design changes was an expensive and time consuming process and financially unstable partners presented an unacceptable risk to the program.
By early summer, it had become clear that the ownership of Vought’s aft fuselage fabrication and integration plant would change hands. There were at least some high-level indications that the announcement of the acquisition could have come as early as the Paris Air Show, but “emergent first flight issues”, now known to be the side-of-body issue, took precedent.
When the deal was announced on July 7th, it represented the company’s biggest commercial expansion since its merger 12 years earlier with McDonnell Douglas. Yet, what had been quiet speculation about the future of Charleston, Boeing’s purchase of Vought’s 787 operations amounted to a proverbial starting gun for the competition for the second line.
Late Summer brought the filing of permits for the Charleston line and the de-certification of the IAM at Boeing Charleston, the last of the major hurdles for Boeing’s competition. Both events would set the stage for the secret negotiations between Boeing and the leadership of the IAM, which appear to have ended in stalemate. For now.
Washington state elected officials are now frantically working both sides, trying to bring Boeing and the IAM back to the table, while Boeing maintains that no final decision has been made on the location of the line.
In the words of Yogi Berra: “It ain’t over till it’s over.
Underlying the whole selection process is a shifting justification for the second line. As Boeing was accumulating orders at a stunning pace, the company entertained the idea of using a second assembly line to raise production rates to as high as 16 787s per month, beyond the 10 per month it had planned for the end of 2009. However, as the reality of the production troubles set in, the difficulty in ramping up made the second line imperative to get to the originally targeted 10 per month, now set for the end of 2013.
It cannot be far from Boeing’s mind that the “assurance of delivery” their customers seek is as much about labor relations as it is about program execution.
When the final announcement is made, congratulations will be offered, fingers will be pointed and blame will invariably be cast. The decision is both the close of another chapter for the 787, and the beginning of an entirely new one. All of this comes before a single hour has been flown by the Dreamliner.
What’s past is prologue
This post was originally published to the internet between 2007 and 2012. Links, images, and embedded media from that era may no longer function as intended.
This post originally appeared at Flightglobal.com from 2007 to 2012.