Boeing Gambles on Failed Strategy

After sucking hundreds of millions of dollars in tax incentives from the state of South Carolina, the Boeing Company this week concluded a months-long charade of indecision by announcing it will build a second 787 Dreamliner assembly line in North Charleston, South Carolina. The decision by Boeing executives is the latest move in an outsourcing strategy, which is credited for delaying the launch of the problem-plagued 787 by more than two years.

Despite claims by Boeing that high labor costs and the threat of future strikes were key reasons for looking beyond Washington state for a new manufacturing site, the company refused to consider proposals from the IAM that would have guaranteed uninterrupted production for at least 11 years.

“Boeing’s goal was not an agreement that would keep the work in Washington state,” declared IAM General Vice President Rich Michalski. “Their goal was to run out the clock on a charade that included blaming their own workers for a decision to establish operations in yet another distant and high risk environment.”

The decision was met with outrage in Washington state, where lawmakers provided more than $3.2 billion in tax incentives in 2003 to get the company to build the first 787 production line in Washington.

“Boeing has betrayed our loyalty once again, walking away from our discussions just like they walked away from Seattle eight years ago to move to Chicago,” said District 751 President Tom Wroblewski. “We tried very hard to reach an extended agreement with Boeing. We listened closely to what executives said, and suggested ideas to meet their needs. We offered concrete, real-world solutions.

“Instead of investing in our shared future and a highly talented workforce in a region ideally suited for aerospace, Boeing has decided to double-down on its failed 787 strategy and place an ill-advised, billion-dollar bet on a strategy that’s a proven loser.”