Boeing on Thursday said it plans to consolidate its 787 Dreamliner production at its South Carolina facility next year, a bid to lower costs amid weak demand, marking a blow for its Seattle-area production hub.
Boeing in July said it would evaluate consolidating production lines for the widebody jets, which it currently has in both Everett, Washington, where it first started producing the planes in 2007, and North Charleston, South Carolina, a plant where the workforce isn't unionized.
At that time, Boeing said it would further cut already-reduced production plans for the 787, a plane used often on international routes, which have been more affected than domestic ones during the coronavirus pandemic. It will make six 787 planes per month next year, down from 10.
"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," Stan Deal, CEO of Boeing's commercial airplane unit, wrote in an employee memo.
Boeing said mid-2021 was its "best estimate" for the start of the production consolidation in South Carolina. The company noted that only the North Charleston facility is set up to produce the 787-10, the largest model in the Dreamliner family.
After the announcement, which was expected, Boeing's stock slipped from the day's highs and was up less than 1% in afternoon trading.
Boeing announced the second production line for the 787 nearly 11 years ago, and consolidating production there is the latest pain for Boeing's workers and the economy around its Seattle-area production facilities. Boeing employs about 7,000 people in South Carolina and close to 70,000 in Washington state, according to its most recent counts.
"Boeing's decision to pull its 787 production out of Washington state is shortsighted and misplaced," Rep. Rick Larsen, D-Wash., chairman of a House subcommittee on aviation and whose district includes Boeing's Everett plant, said in a statement on Wednesday. "As the economy comes back and air travel returns, I will fight to bring 787 production back to Everett."
The dismal aircraft market on top of the aftermath of two fatal crashes of its bestselling 737 Max prompted a wave of cost-cutting. Boeing earlier this year said it planned to reduce its 160,000-person workforce by 10%, warning this summer that further cuts are possible.
The Max, Boeing 767, 777 and 747 jets are made in the Puget Sound area of Washington state.
Boeing also plans to stop making the iconic 747 jetliner, which is also produced in Everett, in 2022.