EVERETT, Wash. - As expected, Boeing revealed today that it's moving all 787 Dreamliner production to South Carolina, dealing a big blow to a Puget Sound city already reeling from Covid-related losses.
Stan Deal, Boeing's Commercial Airplanes CEO, confirmed the rumors in an email sent to employees.
"For months, teams studied options, engaged all of our stakeholders, including unions, and considered a number of factors including logistics, efficiency and long-term health of our production system," Deal said. "It became clear that consolidating to a single 787 production location in South Carolina will make us more competitive and efficient, better positioning Boeing to weather these challenging times and win new business."
More than 30,000 people work at Boeing's Everett plant. It's the city's largest employer.
Although the Everett factory produces several widebody jets, including the 747, 767 and 777, Everett Mayor Cassie Franklin said losing Dreamliner production is a "one-two punch."
“There isn’t a family in this city that isn’t somehow connected back to the Boeing Company, it’s part of the fabric of our city,” Franklin said.
Boeing hasn't said how many jobs will be impacted, but Snohomish County Executive Dave Somers said executives told him about 900 workers will be affected. That doesn't include the indirect economic impacts from losing so many employees in the region.
Gov. Jay Inslee, in a prepared statement, said the state will reassess Boeing's "favorable tax treatment" in light of the company's announcement.
“Washington state remains the best place in the world to build airplanes," Inslee said. "Boeing's success as a company is a credit to the workers and taxpayers of Washington state. Today's announcement is an insult to the hardworking aerospace employees who build 787s."
Inslee said he asked Boeing leadership what the company needed to keep 787 production in Washington, but "in all our conversations, they never asked for anything."
"This news falls hardest on the more than 1,000 Washington workers who build the 787, and many more who face uncertainty as a result of this decision," Inslee continued.
"We have the most talented workforce in the world and unparalleled infrastructure. We are consistently the top-ranked state for workers and businesses, and there remains a competitive business environment for aerospace manufacturing in our state."
The company plans to complete the transition to South Carolina by mid-2021, though Boeing stressed that it will still have a large footprint in Western Washington.
"Today’s decision does not change our commitment to Washington state," Deal said in the note to employees. "We’ve made many long-term investments in the Puget Sound region to support our development programs including the 777X and completing the 737 MAX family (in Renton). These programs and our people are just as important to the future of our company as the 787."
Boeing also released a video explaining the decision. You can watch it here.
Read the full message sent to employees:
The past seven months have been nothing short of extraordinary as we navigate the significant ongoing impacts of the coronavirus pandemic on our people, our business and our industry. We have made long-term strategic and sometimes difficult decisions to ensure we bridge to a recovery, and build a stronger, more sustainable future for all of us.
I know this isn’t easy and I appreciate how we have supported each other and stayed nimble while we look at every opportunity to adapt, preserve our liquidity and be more competitive in a very different commercial market.
To ensure we can be effective in a market that will be smaller in the near-term, and one that will have different demands from our customers long-term, we made a decision earlier this morning to consolidate 787 production in South Carolina after months of detailed and thorough study.
This strategy affects many teammates so it was important we took the time to run a rigorous and thoughtful evaluation. You may remember that in July, after we announced the lower 787 production rate and saw ongoing challenges in the business environment, we began to assess the most efficient way to produce the Dreamliner. For months, teams studied options, engaged all of our stakeholders, including unions, and considered a number of factors including logistics, efficiency and long-term health of our production system. It became clear that consolidating to a single 787 production location in South Carolina will make us more competitive and efficient, better positioning Boeing to weather these challenging times and win new business.
Winning against the competition isn’t because of any one site or any one program – it takes all of Boeing to succeed. The 787 is the tremendous success it is today thanks to our great teammates in Everett. They helped give birth to an airplane that changed how airlines and passengers want to fly. 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.
Today’s decision does not change our commitment to Washington state. We’ve made many long-term investments in the Puget Sound region to support our development programs including the 777X and completing the 737 MAX family. These programs and our people are just as important to the future of our company as the 787.
Later today, we will share the decision of our 787 study with the public. But first, I want to provide further context around our strategy and what’s next for our team in this video.
Over the next several months we will continue to work details of transitioning to a single 787 production location in mid-2021, according to our best estimate. You have my commitment that we will share openly and transparently with you when decisions are made.In the meantime, many of you likely have questions about today’s announcement.
I hope you can join me for our next employee webcast on Monday, Oct. 5 starting at 9 a.m. Pacific time/12 p.m. Eastern time to ask those important questions and continue our conversation.
Thanks for all you’re doing, and please stay safe and healthy.