Politics & Government

S.C. lands Boeing

A tale in two cities. Click to enlarge.
A tale in two cities. Click to enlarge. thestate.com

The landing was delayed, but Boeing has arrived in South Carolina and is bringing along 3,800 jobs to build its new, state-of-the-art jet.

Jilting its longtime Washington state manufacturing base, the Chicago-based airplane maker said Wednesday it will build its second 787 Dreamliner assembly line in North Charleston.

State and local officials, who unsuccessfully sought Boeing's first 787 assembly line in 2003, expect Boeing to break ground on the plant within a month, as the company moves to get the line up and running by 2011 to complete backordered planes.

Boeing said it chose the North Charleston site because of its existing facilities at the site, some already working on 787 segments.

"Establishing a second 787 assembly line in Charleston will expand our production capability to meet the market demand for the airplane," Jim Albaugh, chief executive of Boeing Commercial Airplanes, said in a news release. "This decision allows us to continue building on the synergies we have established in South Carolina."

The General Assembly also approved a massive tax incentive package, part of a host of promises made to Boeing since the company first discussed the possibility of locating in South Carolina in August. The package would eliminate income and other taxes for the company for a decade and provide low-interest construction bonds.

Gov. Mark Sanford, who previously opposed similar packages, said Wednesday he would sign the incentives bill.

To qualify for the incentives, Boeing pledged to invest at least $750 million and create 3,800 jobs in the state within seven years. State officials expect those number to grow.

Senate Finance Committee chairman Hugh Leatherman, R-Florence and one of the chief negotiators, said Boeing's move could have an initial economic impact of up to $450 million a year, even after incentives are taken into account.

That does not include other economic pluses that will spring from the plant. "The effects on our economy will be mind-boggling," said Leatherman.

House Speaker Bobby Harrell, R-Charleston, said the need for legislators to return in special session this week - to restore federal jobless benefits that unemployed South Carolinians lost because of an error not corrected earlier this year - gave lawmakers the chance to OK the incentives.

Harrell said he does not think the deal hinged on incentives, though leaders had planned to call lawmakers back into session, if needed, to approve them.

"The timing was incredible," Harrell said. "We were fortunate their board was meeting at the same week."

The Seattle Times reported the company could move facilities to South Carolina, but Boeing's Albaugh said his company remains committed to Washington.

"The Puget Sound region is the headquarters of Boeing Commercial Airplanes. Everett will continue to design and produce airplanes, including the 787, and there is tremendous opportunity for our current and future products here," Albaugh said in his news release.

S.C. officials expect a network of companies will spring up across the state to support Boeing's operations, just as businesses sprang up around BMW's Upstate plant, opened in the 1990s. Commerce Secretary Joe Taylor said his agency already is courting some of those firms and will advise existing S.C. businesses on opportunities.

Most credited a team of lawmakers, led by Leatherman, and Taylor for sealing the deal.

But it did not come easily.

Lawmakers said Boeing needed assurances S.C. workers were up to the work, and the state could provide training.

Senate President Pro Tempore Glenn McConnell, R-Charleston, Harrell, Leatherman and aides were in and out of closed-door meetings Wednesday with staffers, attorneys and Boeing representatives. Outside, lawmakers and lobbyists milled about, likening it to waiting on the Vatican's cardinals to send up a puff of smoke to signal a decision on a pope.

Other lawmakers acknowledged concerns South Carolina could be a pawn in high-stakes negotiations between Boeing and Washington state, the other finalist for the new plant.

"Any two parties in a negotiation could play one party against another party that made an offer," state Sen. Chip Campsen, R-Charleston said while waiting on the announcement. "It's always a risk you run. ... (But) I think they are legitimately interested in us."

Later, Campsen said the state's lower taxes and good quality of life were crucial factors in attracting Boeing.

When the Senate approved the incentives earlier Wednesday, "We had no idea Boeing was going to come here," Leatherman said. "As late as 4:30 (p.m. Wednesday), there was no decision."

A call from Boeing came about 5 p.m., unleashing cheers in the Senate while House lawmakers donned palmetto tree pins with wings. In the lobby, Sanford waited to personally thank Leatherman and McConnell - both of whom he frequently has criticized in the past.

"In terms of jobs, it's an incredible shot in the arm," Sanford said, in a nod to the state's 11.6 percent jobless rate. "Timing is of the essence."

Why S.C.?

Some of the reasons Boeing chose S.C. over Washington

Boeing's workers in North Charleston are nonunion and lower paid than their Washington state counterparts. In September, the Charleston workers voted to oust the Machinists union.

The S.C. General Assembly offered large financial incentives - including $170 million for infrastructure and other tax breaks - to lower Boeing's costs.

State-funded training at tech colleges diminishes the disadvantage of local workers' inexperience. Charleston's Trident Technical College has classes geared specifically to Boeing's needs.

Charleston has one of the deepest ports on the East Coast and an airport with runways long enough to handle the largest airplanes built.

Boeing also reportedly was unhappy with the business climate in Washington state - unionized workers there who went on costly strikes, and that state's shortage of college-educated engineers.

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