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First Dreamliner delivery confirms Charleston as international business address
Oct. 6, 2012Charleston Regional Business Journal
By Brendan Kearney
Speaking this week, economist and College of Charleston President George Benson predicted just how high the region could rise on Boeing's wings. He said historians will view the aircraft maker as the most “transformative” economic force on the Charleston area since the Civil War.
“We've been always a kind of Navy town driven by tourists and governments jobs, for the most part,” Benson said. “Now suddenly we've got an outside influencer coming into the fold, which we never had before.”
Over the past couple years, thousands of Charleston-area workers have had a hand in building the inaugural 787 Dreamliner. Now a high-level delegation from the South Asian national carrier has come to pay for it and take it home.
And that's a big deal for everyone involved.
For the Charleston area, it's a cutting-edge business transaction — “exporting a complex manufactured product to an important export market,” in the words of aviation analyst Richard Aboulafia.
“You're talking about serving a vast growth part of the world, and that's the name of the game in this economy,” said Aboulafia, vice president of analysis at the Teal Group, a Virginia-based consultancy.
And it's an airplane sale that could help sell the broader region on “the international stage,” according to Charleston Regional Development Alliance President and CEO David Ginn.
“When you're on an international stage, you're able to compete in a different and more fundamentally powerful way,” Ginn said earlier in the year, looking out at Boeing's North Charleston flight line from his organization's conference room.
Gov. Nikki Haley, whose parents emigrated from India and who met with several interested aerospace businesses at this summer's Farnborough International Airshow, said the business pipeline is already percolating.
“India's going to be a great partner,” she said. “We're talking to a lot of Indian companies that now want to look at South Carolina, so the fact that the first Boeing planes are going to India is a nice complement. And there's a lot of R&D, IT, manufacturing companies that are looking not only from India but from China, from Japan, from Mexico that we're recruiting, so it's all working out very well.”
For Boeing and Air India, it's a long-awaited liftoff.
Boeing conceived the 787 concept almost a decade ago, but after winning hundreds of advance orders in the mid-2000s, including 27 from Air India, technical hurdles and supply-chain hiccups pushed the program three years behind schedule.
The South Carolina complex, which had been part of the problem, has become part of the solution. Boeing bought the Vought Aircraft Industries aft-body factory and the Global Aeronautica mid-body plant, and, facing more than 800 plane orders from airlines, decided to build a final assembly plant in North Charleston as well.
The delivery to Air India officially begins a new era in U.S. plane manufacturing: This is the first time since World War II Boeing has assembled and delivered a commercial airplane outside Washington state, according to Scott Hamilton, an aerospace consultant based near Boeing's center of gravity in the Puget Sound.
“It doesn't really matter whether it was Air India or British Airways or even United Airlines,” Hamilton said. “It's the fact that this is now a new delivery center in America is significant.”
Air India, meanwhile, was among the 787 program's earlier customers in 2005, and it remains one of its biggest customers. The government-owned carrier, which has struggled mightily since merging with Indian Airlines in 2007, pinned its turnaround hopes on the Dreamliners.
But Boeing's delivery delays threw a wrench in that plan, and Air India aggressively sought compensation for the wait. Early in the year Air India was reportedly seeking $1 billion from Boeing, and negotiations continued through May, when the airline was expected to take its first plane from Everett, Wash. Boeing and the airline worked out a deal in June, but the Indian government had not signed off on that arrangement until August. And it wasn't until last month that Air India took its first two Everett-made 787s from the North Charleston delivery center.
On the map
All of that now is in the rearview mirror. It's still just the beginning of the larger Boeing project here.
The plant's second plane is in Texas being painted, and is scheduled to return to North Charleston this weekend. The third and fourth sit parked on the flight line here. All are scheduled to be handed over to Air India by spring.
Boeing South Carolina is slated to assemble at least three planes a month by the end of next year, and eventually could double that production. The campus aft-body building will undergo a major expansion over the next year and a half, and further growth of the airframer's local footprint seems inevitable in the long run.
Anita Zucker, CEO of The InterTech Group, was the mistress of ceremonies for the November 2009 groundbreaking of the final assembly building.
“At a time when our economy was in such a tough position, look at what it has done for this community,” she said.
With the first delivery, “it absolutely puts us on the global map, if we haven't already been there,” Zucker said.
Mark Taylor, a Charleston-based real estate executive with investors on the West Coast and properties nationwide, knows that first-hand.
Wherever Taylor goes and whomever he meets, Boeing is the first thing people mention when they learn he's from Charleston.
“The amazing thing is they're all perceptive about it,” the president of North Carolina-based SCG LLC said this summer.
Taylor, a Woodruff native, said Californians might not think much about South Carolina, but they know Boeing is building — and now delivering — 787 Dreamliners here.
“The world has come to Charleston, so to speak,” he said.