MIAMI — Welcome to part five of our multi-part epoch on the fascinating history of the Boeing Everett plant. Enjoy our final installment.
The Plane That Just Won’t Quit: The 767
In November 2009 Boeing broke ground on the new 1.2 million square-foot factory in Charleston. This move by the company to assemble its first wide-body jet ever outside of Everett, in a right to work state, raised many an eye brow. Nevertheless, production began in early July 2011 with the first airplane rolling out on April 27, 2012. The first South Carolina assembled Dreamliner was delivered on October 5, 2012.
Boeing also opened a full delivery center in November 2011 and a new facility to manufacture 787 parts in December 2011. Production was expected to reach three aircraft per month during 2013, but is moving at a build rate of just 1.5 per month as of the end of July 2013.
The company didn’t stop in South Carolina in its search for solutions to the 787 problem. Boeing identified space in Everett to add a temporary assembly line for the 787 that “may not be temporary”. They looked no further than the domain of the 787’s predecessor for the answer. With a dwindling order book for the 767, apart from the U.S. Air Force’s KC-767 aerial re-fueling tanker, the airplane’s assembly line seemed ripe for the picking.
In March 2011, beginning with the 1,001st 767 built, Boeing shrunk the footprint of the company’s smallest twin-aisle twinjet’s space into an area 44% smaller than the original production line. Since the tooling was too heavy for the overhead cranes, a specially hired industrial moving company literally jacked up the entire assemblage, put it on hydraulic-powered dollies and drove it across the floor to the back part of the 767’s original bay in the factory. At the same time, the production rate increased slightly, returning to two aircraft per month by building the aircraft 20-30% more efficient then the first 1,000 planes. This was accomplished by adopting the Lean+ “just in time” manufacturing initially utilized by the 737 and 777 a few years before. Ironically the 787s delays have increased the life span for the 767, the aircraft it was designed to replace. Boeing expects the production rate to increase to three per month in early 2014.
Brief Relief from the Storm
Operational issues aside, manufacturing steadily began to improve. On November 12, 2012 Boeing celebrated the roll out first 787 to be built at five airplanes per month from 3.5 per month that had just been achieved months before. On May 9, 2013 the rate was lifted to seven aircraft per month at Everett. The airplane was the 114th 787 to be built overall and the 100th 787 to be built at Everett. Fortunately, the 787 production pace is clearly on the upswing with the 100th delivery assumed to have taken place in the past two weeks.
After a perfect storm of crisis at Everett, the storm clouds so synonymous with the Pacific Northwest do appear to be parting: Order books for the 787 and 777 are bulging, and build rates are accelerating quickly. The 787 Dreamliner is flying again and proving the energy efficiency and passenger appeal it promised from the beginning. The first stretched Boeing 787-9 rolled out in July, and made its first flight on September 17, 2013. The even larger Boeing 787-10, which occupies the low end of the 777-200 market, officially launched at the 2013 Paris Air Show. For a time, even Boeing’s historically strained labor relations had improved.
A Future in Doubt
But on the radar a storm was growing over the upcoming 777X, a relaunch of the carriers popular 777. Much like the second 787 line, the one that wound up in Charleston, it was not clear over where the airplane would be built. As an expected launch for the Dubai Airshow in November, 2013 answers to where the new airplane would be built were left up in the air.
The first news came in late October, when Boeing management announced that they would be moving 777X engineering to locations outside of Seattle. The news sent Puget Sound into a tizzy, with analysts foreshadowing a coming decision to move to South Carolina or elsewhere. Boeing simply explained that this was not terribly novel, and attributed the redistribution to the decline in defense spending and the need to keep those people employed.
The second salvo, and the beginning of the real show, came one week later when it was announced that management and the IAM Machinists union had agreed to a tentative deal to keep the 777X in Washington State for good. The deal, in the form of a new contract, laid out deep cuts to employee benefits in exchange for the 777X and its wings to be built in the region.
Rank and file union members were enraged by the deal on a number of levels. First, that union had the nerve the clearly poor offer to a vote. Second, that Boeing was requiring such deep cuts. Finally they were enraged that Boeing presented the offer as an unequivocal take it or we leave. Local union leadership wound up tearing up the contract and denouncing it at the end of a union meeting, and things took a drastic turn for the worst.
With momentum building against the contract, national IAM leadership, who negotiated the original contract, stepped in to circle the horses. Industry experts, politicians, and Boeing brass all pointed out that a no vote would almost certainly guarantee the eventual end of Boeing in Seattle.
State politicians acted fast to try to shore up support in Boeing, passing a $9 billion incentives package over a single weekend to sweeten Boeing’s stay. The package offered significant tax breaks, education investment, and infrastructure upgrades. While the company had said they were required to build the line, it later became apparent that Boeing would still leave if the union failed to ratify their contract.
The issue boiled to a head only last week, when the contract went up for a vote. The mood was decidedly negative in tone at the Everett voting site. Groups of employees held up signs and chanted slogans denouncing the contract and the union leadership that brought it to vote to begin with. Very few were stating, at least publicly, that they had voted anything other than ‘no’.
Ultimately, the contract was voted down in a landslide two to one vote. While unions cheered what they saw as calling Boeing’s bluff, few others shared the enthusiasm. Boeing announced the next morning that they had begun the process of looking elsewhere, and later went on to say that they had no intention of engaging the Seattle unions again until their current contract was over in 2016.
Looking forward, the skies are far from blue over Everett. If the 777X ends up elsewhere the existing plant could easily wind up half empty by 2020. The 767, while it will maintain a steady flow of airplanes for years, will eventually wrap up production early in the next decade if not sooner. The 747-8 program is not expected to make it through the decade, particularly once the 777X comes out. The 787 will likely keep the plant going for some time, but the Dreamliner may soon find itself the only remaining line in the plant as the 777 closes early in the next decade.
If the 777X winds up coming to Everett the plant is expected to become significantly larger in the coming years. The program would generate tens of thousands of jobs and contribute to years of success in Everett. But right now, that appears unlikely.
For now, all that is left are unanswered questions. Faced with dwindling sales in the entire Very Large Airplane category and a twin-jet take-over, will the iconic 747 program make it to its 50th birthday? How many years will it take to make the 787 truly profitable and to what extent will production rise? Will the 777X come to Washington, or will it move elsewhere and herald the death of Boeing in Seattle? What will the plant look like in 2030? Will it continue to be a bustling mini-city, or a shell of its former self?
Only time will tell.