Boeing's new $1 billion investment could nearly double employment at
its North Charleston Dreamliner jet-manufacturing plant and help South Carolina
land more aircraft suppliers, state leaders said Tuesday.
"Our state could become the aerospace hub," said state Senate Finance chairman
Hugh Leatherman, R-Florence.
Boeing plans to add 2,000 jobs by 2020. That would bring Boeing's employment to
8,000 workers at its Lowcountry facility.
Noting that Boeing has exceeded its S.C. employment expectations since launching
the plant in 2009, Leatherman said he thinks Boeing will add another 2,000 jobs,
raising its total workforce at North Charleston to 10,000. That still would be
well short of the 86,000 workers that Boeing employs at its Washington state
manufacturing hub.
Hours after the deal was announced, the state Senate Finance Committee, which
Leatherman heads, agreed to borrow $120 million in bonds to aid Boeing with its
expansion. The incentive deal now heads to the Senate floor. Boeing received
$450 million in incentives more than three years ago for its initial $750
million investment in the state.
Leatherman asked for quick passage of the bonds "to let Boeing know we
appreciate their being here."
An incentives bill also was introduced Tuesday in the S.C. House.
If approved, the money will go to buy a 320-acre site that neighbors Boeing's
plant at Charleston International Airport and prepare that site for
construction, state Commerce Department Secretary Bobby Hitt told senators. The
bonds would not pay for any buildings, Hitt said.
The state would own the site until the bonds are repaid in 15 years. The state
could give Boeing the property or lease it to the company if performance goals
-- $1 billion in new investment and 2,000 additional jobs -- are met within
eight years, Hitt said.
In 2009, Boeing said it would hire 3,600 workers in North Charleston, surpassing
that goal in 2012 -- four years ahead of the state's deadline, said company
spokeswoman Candy Eslinger. The company already has invested $1 billion in North
Charleston, she said.
"South Carolina has been a great partner for Boeing," Eslinger said.
Boeing will add workers to its North Charleston facility that builds aft-bodies
of 787s and paints the aircraft, and at a new operations center to transport
pieces of the aircraft to the Seattle area, where Boeing operates another plant
that also assembles 787s, Eslinger said. North Charleston also will become a
site where Boeing consolidates information technology work.
The expansion should help the state attract more aircraft suppliers, including
some that also might do business with an Airbus plant that is opening in Alabama
in 2015, Hitt said. "The action today increases the heartbeat of the suppliers
looking to come to South Carolina," he said.
BMW, which has its only U.S. plant in Greer, was the largest
economic-development project landed by the state before Boeing, and it has lured
about 40 direct suppliers to the state, Hitt added.
The talks
Boeing had been discussing expanding in South Carolina for a few months, but
talks became serious about three weeks ago, state leaders said. Company
executives met with Leatherman, Hitt, House Speaker Bobby Harrell, R-Charleston,
and Gov. Nikki Haley to hammer out details.
Leatherman said company and state officials met constantly, even getting
together -- with Boeing's chief counsel -- on Good Friday. An agreement was
reached late Thursday night, he said.
Hitt, a former BMW executive, said the deal reminded him of that German
automaker's second S.C. investment. That deal, more than a decade ago, doubled
BMW's employment to 4,000 and led to the creation of an auto-research facility
with Clemson University. BMW now employs 7,000 workers and has invested $5.8
billion in the state, company officials said.
Harrell said the new incentives package offered Boeing amounts to about 10
percent of the company's planned investment, "a pretty good deal for the state."
Local governments are expected to give the aircraft maker tax breaks as well, he
said.
"I do anticipate the cheering will seriously outweigh any opposition that we may
have" to the cost of the incentives, Harrell said.
One Senate Finance Committee member -- Sen. Kevin Bryant, R-Anderson -- voted
against the incentives, saying he could not add $120 million to the state's
debt. State Sen. Tom Davis, R-Beaufort, voted "present," saying he wanted more
time to study the incentives bill.
House Ways and Means chairman Brian White, R-Anderson, said he does not have a
problem with more incentives for Boeing. "They have proven that they will live
up to their obligations ahead of time."
More planes?
With the expansion, Leatherman said Boeing will boost its North Charleston
production of 787 jets to eight a month. The facility, which built its first
787s a year ago, now produces one 787 a month, a number that soon will increase
to two. The goal is to build three jets a month in North Charleston, Eslinger
said, adding Boeing is not ready to discuss an increase beyond that number.
Boeing has orders for 840 of the new jets. Made with composite materials, the
jets have proven popular with airlines because they are lighter and more
fuel-efficient than other commercial aircraft.
Boeing has not talked about adding production of another type of jet in South
Carolina, officials said.
About 1,000 of the new jobs added in North Charleston will be engineers; the
other 1,000 will be made up of production and information technology workers,
state officials said. The jobs will pay $65,000 a year on average, Hitt said.
Boeing has an option to buy another 765 acres near its North Charleston plant.
Combined with the 320 acres that are part of the bond deal announced Tuesday,
the North Charleston facility would be about the same size as the company's
manufacturing operations in the Seattle area, Eslinger said.
"If you could prove you have the workforce and can do the job, more (jobs) would
be coming," U.S. Sen. Tim Scott, R-North Charleston, who helped with previous
Boeing deals, said Tuesday. "The announcement says 'Phase 2,' so maybe there
could be a Phase 3. They did not say this is the final phase."
The 787 took three years longer than projected to get off the ground because of
production problems. Since mid-January, the aircraft has been grounded because
of a problem with smoldering lithium-ion batteries. The company conducted a
final test of a new battery design last week. None of the 787s that reported
battery problems were built in South Carolina.
