Boeing has decided to build its second 787 Dreamliner assembly line in North Charleston, S.C., the company said Wednesday.
Boeing had been considering whether to place the line there or in Everett, Wash.
Boeing says it chose North Charleston because the location was best to support its 787 business plan as the program increases production rates. The facility also will have the capacity to test and deliver aircraft.
Boeing already has a plant in Charleston that makes 787 fuselage sections, and it owns 50 percent of the adjacent Global Aeronautica plant, which integrates 787 fuselage sections from other suppliers.
"Establishing a second 787 assembly line in Charleston will expand our production capability to meet the market demand for the airplane," Jim Albaugh, president and CEO of Boeing Commercial Airplanes, said in a statement.
Albaugh sent a message to Boeing employees Wednesday, saying he knows the decision is a concern to some in the Seattle area, where the first 787 line is and where Boeing's commercial aircraft division is based.
"I ask everyone to focus on the larger picture," Albaugh wrote.
Placing the line in Charleston will expand production capability, diversify its manufacturing base and drive down 787 costs, he said.
That will sustain Boeing's competitiveness, Albaugh wrote.
"We are adding jobs in South Carolina, not taking them away from Puget Sound, which is and will continue to be our center for design, flight test and manufacturing," he wrote.
Boeing hasn't said when operations will begin in South Carolina. But the company has said it wants to produce 10 787s a month by 2013.
South Carolina Gov. Mark Sanford praised Boeing's decision and called it "enormously good news for our state's economy."
Sanford said the state's "monumental" investment will spur the state's already growing aerospace hub. He compared it to the state's investment in BMW, which came to South Carolina more than 15 years ago.
South Carolina offered Boeing $170 million in upfront grants for startup costs, plus multiple tax breaks that would be worth tens of millions of dollars more.
The legislation assumes the company will invest $750 millon and create 3,800 jobs in South Carolina in seven years. If it doesn't create that many jobs, it doesn't get any of the money.
The Society of Professional Engineering Employees in Aerospace said Boeing's decision will hurt a program already stretched to its limit.
"I think it's an astonishing bad business decision," said SPEEA Midwest director Bob Brewer.
It will compound problems on the 787 by further fragmenting the supply chain, Brewer said.
"To take it now and try to move it to a second location and put a work force in place when all your experience is setting in Everett is absolutely mind-boggling to me," he said.
It's also a concern for Wichita, Brewer said.
Spirit AeroSystems builds the nose section and pylons to the 787.
If Spirit invests capital to increase 787 productivity, "and the line (in South Carolina) comes to a standstill or something... we're setting here with 787 parts in Wichita that can't ship," Brewer said. "I can foresee that happening very easily."
Spirit spokesman Ken Evans said the company had no comment on Boeing's decision and referred questions to Boeing.
Boeing has 840 orders for the 787 from 55 airlines. The program was launched in 2003.
Boeing has relied on overseas suppliers to build major portions of the plane that are later assembled in Everett.
That approach so far has been problematic. Ill-fitting parts and other glitches have hampered production, and Boeing has postponed the plane's first flight and deliveries five times. It is more than two years behind schedule.
Last week, Boeing reiterated that it plans to fly the 787 for the first time by the end of the year.
The delays have cost Boeing billions of dollars in anticipated costs and penalties.