Boeing announces South Carolina as second B787 assembly line – Suppliers Share Wrap

After investing USD1 billion earlier in the year to acquire Vought’s B787 rear fuselage assembly plant in South Carolina, Boeing has taken the next step and announced it will base its second B787 assembly line in the Southern US state.

Boeing Charleston performs fabrication, assembly and systems installation for the B787 aft fuselage sections. Global Aeronautica, which is 50% owned by Boeing, is located directly across from the Boeing plants, and is responsible for joining and integrating B787 fuselage sections from other structural partners.

This is the first time that Boeing has located a major commercial assembly line outside of its Washington home state. Boeing’s relationship with its unions at its Everett, Washington facility have been strained, with both sides taking positions that have been ideologically unpalatable to the other. Workers at the plant in South Carolina voted to end representation by the International Association of Machinists in Sep-2009. Under Vought, plant workers had voted to approve unionisation, but only by a slim margin.

Despite the fact that the B787 is still yet to fly, Boeing is clearly concerned about getting production of the aircraft up to speed once deliveries commence (from 4Q2010, initially to All Nippon Airways). Production of the new plant is due to commence in Nov-2009. Until the second B787 assembly line is brought on line in North Charleston, Boeing will establish a "transitional surge capability" at Everett. The manufacturer plans to eventually ramp up overall production to ten B787s per month.

Boeing's shares were down 1.1% yesterday, as shares in suppliers fell almost across the board, as equity markets globally struggled again.

Selected Aviation suppliers’ daily share price movements (% change): 28-Oct-09