Boeing 787 decision could happen at any time

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by GLENN FARLEY / KING 5 News and Wire Reports

Bio | Email | Follow: @GlennFarley

KING5.com

Posted on October 27, 2009 at 7:32 PM

Updated Wednesday, Oct 28 at 11:43 AM

SEATTLE - Boeing's decision on announcing the location of the second 787 assembly line could happen as early as Wednesday.

As first reported by KING 5 News, the news comes on the heels of South Carolina revealing what it intends to offer Boeing to bring the second line there, and it's looking increasingly likely that the company is looking south.

Cautionary notes are worth mentioning here that a decision Wednesday could slide, but what's clear is that things are moving very quickly. In South Carolina, officials have outlined what they're prepared to give the company - that they aren't actually naming.

About a 2-hour drive away from where Boeing could build its next plant, the legislators are in special session in Columbia, South Carolina. And, as expected, incentives for Boeing are now on the table: No sales tax on construction supplies or on the fuel used for test flights, along with a 10-year income-tax break and worker training, including $170 million in economic development bonds to lower construction costs.

But to get it, Boeing has its obligations, such as investing three quarters of a billion dollars into facilities and hiring at least 3,800 workers.

It's that last part that stands out. One of the key features of the 787 is that when production is running smoothly, the 787 line in Everett isn't  expected to require more than 800 to 1,000 people to assemble planes. South Carolina may be playing for more.

Michel Merluzeau studies Boeing and the aerospace industry for G-2 Solutions.

"This feared departure from home base is really on the verge of happening," Merluzeau said. "I don't think Boeing is bluffing anymore."

Last summer he had real doubts about Boeing putting a second line in Charleston, calling it high risk for a program two years behind schedule. But he thinks those risks are now less, and  Boeing might just do it.

"This summer I was a little more optimitstic about Boeing's ability to retain, or begin a second assembly line," said Merluzeau. "At this point, I think all bets are off, to be fair."

 The state has cut Business and Occupations taxes 40 percent - worth almost $3 billion - and gives other tax credits, in some cases eliminating them, and developing more worker training.

Boeing is worried another strike in Washington state could halt production, in an era when its customers are becoming increasingly vocal about delivery delays. Charleston is non-union. Aviation experts say several airlines have stated that if Boeing can't put out an undisrupted output of airlines, they'll simply place their orders elsewhere.

Last month, Washington Governor Chris Gregoire made Washington's business case before Boeing, citing big concessions made for the aerospace industry in 2003.

On Tuesday, the Machinists Union broke its virtual silence with a statement that the work force here is a proven commodity and has generated enormous revenue for the company on a daily basis, that staying in Everett is the lowest risk option and they are more than willing to talk. But it appears discussions about a no-strike agreement have gone nowhere. According to The Seattle Times, sources say discussions between the Machinists union and Boeing over the second production line for Everett have ended, and Boeing appears close to choosing Charleston, S.C. 

Sen. Patty Murray's office says she's trying to arrange talks Wednesday in Washington, D.C., between Boeing and the Machinists union.   

Spokeswoman Alex Glass says Murray doesn't want to see the opportunity for a second 787 assembly line in Washington pass by. The Washington Democrat believes there is still room to negotiate an agreement to secure an expansion of the widebody factory at Everett where the first 787s are being assembled.

KING 5's Jane McCarthy and The Associated Press contributed to this report.

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