South Carolina's legislators and economic development officials were practically giddy when Boeing announced they were touching down in North Charleston. They could hardly be blamed.
In what's being touted as the biggest development deal in the state's history, officials say Boeing has committed to invest $750 million dollars in a facility that will serve as a second manufacturing line for their "green" Dreamliner 787 aircraft, creating thousands of jobs in the three county region that's currently burdened with near 10% unemployment.
"Boeing's decision to expand their presence in our state with an infusion of jobs and capital investment represents not only enormously good news for our state's economy, but also a telling dividend from our state's continued efforts to better our business climate," South Carolina Governor Mark Sanford said in a statement.
It's not clear if even the Dreamliner's massive wingspan (197 feet—think 20-story building) can lift Sanford's diminished reputation. But the governor was the legitimate MVP of the deal, says David Ginn, president and CEO of the Charleston Regional Development Association—and not just because Sanford signed a sizable incentive package for Boeing. He also led the charge to lure Vought Aircraft Industries to the state six years ago, Ginn says. Now Vought's adjacent North Charleston facility will become a key structure for Boeing's Dreamliner as Boeing acquired the Vought facility in July for approximately $580 million. For South Carolina, Sanford continued in his statement, this new deal "means lowering taxes, easing regulatory burdens in our state's tort and workers' compensation systems, and keeping South Carolina a right-to-work state."
But even as South Carolinians rejoice over the promise of the 3,800 jobs Boeing must create over the course of seven years in order to recoup their incentives from the state, the union members in Everett, Washington are crying foul.
Last September, thousands of Boeing's machinists went on a seven week strike that delayed production that delayed production of the aircraft that was already behind schedule due to weak links in the global supply chain.
In a news conference reported by the Seattle Post-Intelligencer this week, Machinists' Union district president Tom Wroblewski said Boeing, "betrayed Washington state's loyalty and used talks over a long-term, no-strike labor contract to leverage a better deal from South Carolina for the second 787 final assembly plant."
Charlie Grieser, a team lead on the 767 line told the Seattle Times that Boeing relied on "threats and intimidation" rather than negotiating a good faith, no-strike agreement with the machinists there. As he and other union members watch their job security vaporize, Grieser believes South Carolina will eventually suffer the same loss of jobs, regardless of being a right-to-work state. He says Boeing has another agenda. "I think they're on their way to China."
In another interview with the Seattle Times, Bobbie Skar, a shop steward on the 787 who has worked for the company 24 years, cautioned, "Boeing is going to suffer, because they don't have the trained work force in South Carolina."
South Carolina executives, officials, and educators who have grown the technical college training network, as well as undergraduate and graduate degree programs in engineering, advanced materials and related curriculum, refute Skar's point, citing BMW's South Carolina-based manufacturing. "When you look at the level of complexity of assembling a 7 Series, it is not all that different from an aircraft," says Dr. Christian Przirembel, vice president for research and economic development for Clemson University. "The skill sets required by the people assembling and testing are there."
Candy Eslinger, a spokesperson for Boeing Charleston, maintains that the company's decision was based on their existing footprint in the area where the new, approximately 584,000-square-foot plant will be constructed, as well as other economic advantages.
On the manufacturing side, because the Dreamliner is made primarily of carbon-fiber composite material, which is trimmed like cloth, manufacturing processes will produce less scrap material and waste. Though much of the state's water supply was in peril during last year's drought which coincided with Google's opening of a data center in the Lowcountry, Ginn says, "Water and infrastructure is not an issue." Przirembel adds, "This is not smokestack manufacturing. Even their suppliers won't be as water dependent as textile manufacturers."
Production of the first Dreamliners are scheduled to start in 2011 and the completed planes are scheduled to take flight the following year.