Please ensure Javascript is enabled for purposes of website accessibility

Boeing Makes It Official: 787 Production Moves to South Carolina in 2021

By Lou Whiteman – Oct 1, 2020 at 3:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The move will cut costs but risks angering union leaders in Washington state.

Boeing (BA -0.73%) said Thursday it will consolidate production of its 787 Dreamliner at its North Charleston, South Carolina facility in 2021, part of a broader effort to cut costs that is sure to ruffle feathers in and around its Seattle commercial aviation base.

The move, which had been rumored, is in response to falling demand for Dreamliners and other aircraft as airlines scramble to bring down costs in response to the COVID-19 pandemic. Boeing in July said it would cut monthly 787 production in response to falling demand, and with fewer planes being built, Boeing no longer needs its Everett, Washington line.

"As our customers manage through the unprecedented global pandemic, to ensure the long-term success of the 787 program, we are consolidating 787 production in South Carolina," Stan Deal, CEO of Boeing Commercial Airplanes, said in a statement. "Our team in Puget Sound will continue to focus on efficiently building our 737, 747, 767 and 777 airplane families, and both sites will drive Boeing initiatives to further enhance safety, quality, and operational excellence."

A Boeing 787 at the company's South Carolina facility.

Image source: Boeing.

In one sense, the move is logical because Boeing has long been overly reliant on its native Puget Sound region and would do well to diversify away from greater Seattle. The company began production at the North Charleston site in 2010, and it is the only facility large enough to manufacture the 787-10 variant of the plane.

But the move will not be received well among Boeing's existing commercial aerospace workforce. Critics, including union leaders, believe Boeing had long planned to move 787 production to South Carolina, a so-called "right to work" state (where workers cannot be compelled to join a union).

Washington Governor Jay Inslee, who in a statement called the move "an insult to the hardworking aerospace employees who build 787s," said there was nothing the state could do to change Boeing's mind.

"I recently asked Boeing's leadership what the company needs to keep 787 production in Washington state. In all our conversations, they never asked for anything," Inslee said. "I understand the serious market forces Boeing faces today. What I don't understand is why the company can't commit to restoring production here when the market for this plane improves."

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.