South Carolina is sweetening the pot in an effort to grab more of Boeing’s manufacturing operations. The state this week will sell $85 million in bonds, part of which will pay for land used by the aerospace giant. State officials also hope to send the message that South Carolina is ready to build the company’s new 777X.
But so are Texas, Alabama, California, Kansas, and Utah. In all, 15 sites are courting Boeing’s newest offering. For most, that means tailoring a package touting a brand new facility and workforce to build the brand new plane.
Not smart, says aviation analyst Richard Aboulafia, adding, “If there’s one absolute no-no on this project, it’s [to build] a completely ‘Green Field’ facility.”
Boeing learned that lesson after choosing South Carolina to build the troubled 787. Most early kinks are now worked out, and compared to Washington state, where Boeing has traditionally been based, South Carolina offers looser regulation, workers generally earn lower wages, and the facility is non-union.
But Seattle’s highly-skilled workforce and the state of Washington’s generous incentives give it an edge, says Seattle-based aviation consultant Scott Hamilton. “It’s the best business choice,” he says, but adds he doesn’t know how much weight such logic will carry with Boeing CEO Jim McNerney.
After the International Association of Machinists union recently voted down Boeing’s contract offer, which would have guaranteed 777X production stay in Seattle, McNerney wasted no time in entertaining other states’ offers. Consultant Scott Hamilton says if Seattle loses the 777X, it will likely accelerate the decline of Boeing’s presence there.