Boeing close to naming second Dreamliner site

Boeing Co. will choose between Everett, Washington, and Charleston, South Carolina, for a second 787 Dreamliner assembly plant in the next couple of weeks as it considers diversifying its workforce to avoid strikes.

Opening a new facility in Charleston, away from the Seattle-area manufacturing hub, would present "execution challenges" and some duplication, Chief Executive Officer Jim McNerney said on a conference call today. Those "modest inefficiencies" would be "certainly more than overcome by having strikes every three or four years in the Puget Sound."

The company, the world's second-biggest builder of commercial jets, is having "constructive" discussions with its largest union, the International Association of Machinists and Aerospace Workers, before the decision, McNerney said. Machinists have gone on strike four times in the past 20 years, including a two-month walkout at the end of 2008.

"Our balance sheet would be a lot stronger today had we not had a strike last year, our customers would be a lot happier today had we not had a strike last year and the 787 program would be in better shape," McNerney said.

"I don't blame this totally on the union, but the mix hasn't worked well yet," he said. "So we've either got to satisfy ourselves that the mix is different or we've got to diversify our labor base."

A line in Charleston would potentially be Boeing's first non-union site. The company was founded in 1916, when Bill Boeing built a float plane on the shores of Seattle's Lake Washington, and its commercial operations remained in the area after corporate headquarters moved to Chicago in 2001.

South Carolina

Boeing bought Vought Aircraft Industries' Dreamliner operations in South Carolina in July and is considering a new assembly line that would be adjacent to that plant.

South Carolina is a right-to-work state, meaning that law forbids making union membership a condition of employment, and employees decertified the machinists union there in a Sept. 10 vote.

The 787 Dreamliner, a composite plastic plane, has been delayed five times because of parts, shortages, redesigns and incomplete work from suppliers.

The 787 is due to be delivered to the first customer at the end of 2010, two and a half years behind schedule because of problems with the new composite materials being used and the new manufacturing system. Suppliers around the world -- such as Vought -- are building large sections of the plane and shipping them to Everett for final assembly.

Job Cuts

Boeing has cut 7,200 positions in the past year and will reduce the workforce beyond the 10,000, or 6 percent, originally planned, McNerney also said on today's earnings conference call.

"While we are tracking somewhat short of our goal of 10,000 positions by year's end, we expect to achieve and surpass that target in 2010," he said. Executives still are working through the magnitude of additional cuts, which are needed as the Pentagon shifts spending priorities and because of "ongoing market pressures" in commercial aviation, he said.