(Adds reaction from unions and analysts)
By Harriet McLeod
NORTH CHARLESTON, S.C., July 30 Boeing Co
chose on Wednesday to build its biggest Dreamliner, the 787-10,
exclusively at its South Carolina plant in North Charleston,
saying the jet is too large to build economically in more than
Investors are banking on rising 787 production to lower the
cost of making the jet and generate cash flow that can be used
to reward shareholders.
The newest and longest of three 787 models, the 787-10 also
is eagerly awaited by airlines seeking its increased seating.
The plane will carry 323 passengers, 33 percent more than the
787-8 and 15 percent more than 787-9, with significantly lower
fuel consumption than current-generation jets of similar size.
But the new plane's longer fuselage sections will be "too
long to be transported efficiently" from North Charleston to
Everett, Washington, where Boeing has two 787s assembly lines,
Boeing said in a statement.
The decision drew immediate criticism from the machinist and
engineering unions, as the Boeing plan will move work to a
"It's part of the company's plan to redistribute commercial
production away from Washington state," said Ray Goforth,
executive director of the Society of Professional Engineering
Employees in Aerospace (SPEEA), which represents about 23,000
workers at Boeing.
International Association of Machinists District 751
President Tom Holden said in a statement that he was
disappointed at Boeing's decision. The union's 31,000 members in
the Seattle area are the "best choice" for producing quality
work on schedule, he said.
But some analysts said the decision had been expected, in
part because the jet's large body pieces were difficult to ship,
and because two assembly lines would be expensive for the
787-10. Boeing has orders for just 132 of the jets, about 13
percent of its 787 orders, which total 1,031 planes.
"The idea of building the same variant in multiple locations
makes no sense," said Richard Aboulafia, an aerospace analyst at
the Teal Group in Fairfax, Virginia.
Systems for the mid- and aft-body sections for the smaller
787s are installed at the North Charleston plant and most of the
sections are flown to Everett for final assembly. The South
Carolina plant also assembles some of the smaller 787s.
"We looked at all our options and found the most efficient
and effective solution is to build the 787-10 at Boeing South
Carolina," Larry Loftis, vice president and general manager of
the 787 program, said in a statement.
"This will allow us to balance 787 production across the
North Charleston and Everett sites as we increase production
The North Charleston line will continue to produce 787-8 and
787-9s, Boeing said. The site also will increase production to
five a month in 2016 from three a month currently, Boeing said.
Boeing plans to ramp up 787 production from 10 a month
currently to 12 a month in 2016 and 14 a month by 2020. The
Everett facility now assembles seven 787s a month.
The 787-10 is being designed at Boeing's Everett factory.
Assembly of mid and aft sections will begin in 2016, Candy
Eslinger, spokeswoman for Boeing South Carolina, said on
Wednesday. Final assembly of the 787-10 is due to begin in 2017.
The 1.2 million-square-foot South Carolina assembly building
was designed for capacity increases, Eslinger said. Later this
year, the plant will begin final assembly of 787-9 jets, which
are currently being made exclusively in Everett. The South
Carolina plant began production in 2011 and rolled out its first
airplane in April 2012.
"Introducing the 787-10 in North Charleston takes advantage
of that facility's capacity while allowing the Everett facility
to continue improving productivity as it focuses on the 787-8
and 787-9," Boeing said.
(Reporting by Harriet McLeod and Alwyn Scott; editing by Andrew