Boeing will place its second 787 Dreamliner assembly line in North Charleston, S.C., the company announced today.
The facility also will have the capacity to test and deliver aircraft.
Boeing has been considering whether to place the line in Everett, Wash., or South Carolina, and had asked the Machinists union in Washington for a no-strike clause. But talks broke off Tuesday, the Seattle Times reported.
Boeing says it chose North Charleston because it would best support its 787 business plan as the program increases production rates. Boeing already operates a factory in North Charleston that makes 787 parts.
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"Establishing a second 787 assembly line in Charleston will expand our production capability to meet the market demand for the airplane," said Jim Albaugh, president and CEO of Boeing Commercial Airplanes.
The Society of Professional Engineering Employees in Aerospace said the decision will hurt a program already stretched to its limit.
"We are astounded that Boeing has chosen to compound the problems of the 787 program by further fragmenting the supply chain," SPEEA executive director Ray Goforth said in a statement. "There is no credible business case for this decision."
The news came shortly after South Carolina legislators approved an economic incentive package to guarantee tax breaks and low-interest loans.
After Boeing announced its decision, the typically staid South Carolina chamber broke out in cheers and legilators put on palmetto tree pins with wings, merging the state's symbol with its biggest economic development announcement on record.
Gov. Mark Sanford called it a "monumental" investment that will spur the state's already-growing aerospace hub.
Boeing's Albaugh sent a message to employees Wednesday saying he knows the decision is a concern to some in Washington.
"I ask everyone to focus on the larger picture," he wrote.
Putting the line in Charleston will expand production capability, diversify its manufacturing base and drive down costs, Albaugh said in the message.
And that will sustain Boeing's competitiveness, he said.
Boeing has 840 orders for its 787 from 55 airlines. The program was launched in 2003.
Spirit AeroSystems in Wichita builds its nose section and struts. Company spokesman Ken Evans said the company had no comment about the announcement.