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Aug
2013
23

Boeing’s Wage-Slashing Move to SC Backfires as Company Can’t Meet 787 Production Demand

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When Boeing left Washington for South Carolina in order to suppress the wages of its workers, it also left behind the quality work that had been provided by a highly skilled, union workforce.  Now, that union-busting is backfiring as productivity has dropped immensely and Boeing is unable to meet their 787 Dreamliner production goals.  

Via to the Puget Sound Business Journal:

Boeing’s South Carolina facility is running behind projections and won’t make its goal of producing three 787 Dreamliners a month by the end of 2013. In fact, the Everett plant will have to make up the difference in order for the company to reach its overall goal of 10 jetliners a month by year’s end.

As recently as July 24, when Boeing announced second-quarter earnings, Boeing CEO Jim McNerney insisted the company is on track to hit 10 Dreamliners monthly by the end of this year.
But how Boeing accomplishes that has become more problematic. Company executives have started saying that Boeing’s North Charleston, S.C., plant is somewhat behind its goal of contributing three 787s monthly by the end of 2013.

The cost savings associated with moving to South Carolina, where workers are paid nearly half of what workers in the Everett, WA plant make, are now for naught. The Everett plant will be counted on to make up the difference.  

For Boeing, the news is only getting worse as one of their largest global competitors, Airbus, is looking to move to Washington state to build their new engineering center. Airbus Americas Chairman Allan McArtor explained the move:

We are attracted to Washington state for the same reason we were attracted to Wichita. That’s where the talent is,” he said. “If you want to have access to the talent that developed over the last 100 years of aviation, Washington is very fertile ground.”

Boeing moved to South Carolina to take advantage of “Right-to-Work” laws.  In an internal memo that leaked they said, “the only consistent advantage attributed to Charleston was the ability to ‘leverage’ the site placement decision toward ‘rebalancing an unbalanced and uncompetitive labor relationship.’” Their new workforce is woefully inexperienced and cannot meet demand so they have to go back to Washington to get back on track.  Meanwhile, their competitor is swooping in and taking advantage of the incredible wealth of skills in Washington. If karma has its way, the worker well will be dry before Boeing has a chance to return.

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14 Comments on “Boeing’s Wage-Slashing Move to SC Backfires as Company Can’t Meet 787 Production Demand”

  1. Obviously the author of this article has never been to Charleston. I live less than two miles from the Boeing plant in North Charleston. I’m not going to bash unions, no need to, I believe in modern day unions. However, your assertion that there are no skilled workers in the area is insulting, and an assumption. There is no such thing as skilled union workers, just skilled workers, and there are plenty of them in the area. N Charleston is home to Charleston AFB. There are plenty of former Air Force personnel in the area, as well as many others with the skills necessary to work @ Boeing. Many of them choose not to however, and when you mention Boeing they balk at the idea of working for them. They will tell you there are better paying jobs available to them in the area. Cheap labor is just that, cheap labor. Doesn’t matter what state your in, or the laws. The old saying “you get what you pay for applies here.” The idiots in this state are in the upstate. Along the coast IQ’s double, Charleston county is very liberal, Columbia, the state capital is upstate. They hate us on the coast, Nikki Haley is an upstate tea party queen, trust me, we would get rid of her if we could, but were outnumbered by idiots.

    1. Todd, what a typically narrow-minded and ridiculously hypocritical rant you shared. Confirms that Liberals have no answers. They are out of ideas, so they resort to lying to the press, name-calling and character assassination of anyone who disagrees with them.

      1. Aaah yes “Right to Work State” I now live in Michigan, which is a ‘Right to Work State’, wanting to avoid unionism, we see where this went (bankrupcy) actually Michigan has a huge management problem, and unionism was the response. Talented workforce will relocate to jobs with competitive compensation. Companies who aren’t competitive in paying their talent will be left holding the bag,. Like Boeing in S.C.

      2. Too funny, Justin.

        Readers are to assume your rant is proof you have answers and ideas? OK, I’ll accept your woeful reply to Todd, on strength of your words alone. However, maybe you should ask the neocons sites you visit to come up with new material. Just suggesting

  2. firsties!

    Serves’m right

  3. Glad to see Boeing get what is due them…or maybe I should say McDonald Douglas…since the merge with Douglas in the 1990′s has only meant deterioration ever since.

    It has been get rid of the “Ol Timers”, send what you can out of the country, eliminate the artery feeding sites like Wichita, KS and find anyone else to build aircraft for cheaper….even if it means sacrificing quality to do it. They did it all while hiding behind an umbrella called LEAN Manufacturing.

    As much as I have hated the idea we would loose the aircraft industry in my lifetime there seems to be no other answer. Those Ol Time leaders are gone now …you know the ones who new providing good jobs and security to the workers was good for us all. It’s all about the almighty buck and what is even more scary is eventually when all this still doesn’t make the rich as rich as they like, they will start sending core assets out of the country to be built. That is when we will start seeing planes fall from the skies but it won’t matter because the ones who decided to move it out will have their money and be gone by the time we ALL figure it out.

    Welcome aboard Airbus! It doesn’t take a rocket scientist to see the skilled labor that Boeing so quickly and freely tosses to the wind is more than willing to dedicate their service to a new and appreciative company in town.

  4. Wow, how insulting! My husband works at the North Charleston plant and I think things are going pretty good. A lot of the skilled workers like my husband come from other states. My husband came from Florida to work there and a lot of the others are former NASA employees, not exactly the idiots the writer would have you believe!

  5. I work on the flight line at Boeing SC and the talent on the flight line is already leaving bc of the pay. There is some talent in the factory but the management is trying to get to rate of 3 planes a month and sends out unfinished aircraft to the flight line and we are reworking and doing factory work first before the flight line can begin their jobs. Most the companies skilled talent on the flight line is from other parts of the country and will leave bc they have no incentive to stay. They will go back home for less money to be at home. So they need to pay much better for us to stay there. Also they micro manage, Over work us and underpay us. An union would not hurt bc they would create better organization which is absolutely NONE there. Help to stop the micro managing which hurts moral. And pay us better which is about $8-10 underpaid for that type & size of aircraft. So whoever said its so great there is a fool. They would not last a week on the flight line with the pressure of the whole Boeing SC site on their back. Only getting 3 or 4 days off a month trying to save this company from their own stupidity. So our families suffer bc of it. Boeing got what it paid for. Cheap labor equals poor product. When Washington has delivered over 30 planes since the battery grounding and Boeing SC has delivered ONLY 6 planes. Then there is a major talent problem and a management problem too. And I work with some NASA guys too and some aren’t the brightest crayons in the box. This isn’t a space shuttle. Its a 787 aircraft. Two totally different types of things. It’s like comparing apples and oranges. That’s my $.30 worth. That was my raise this year. So there is an idea of what the pay is like. The reason you can not get a good hamburger in Charleston anymore is bc they work for Boeing SC now. Catch you on the flip side.

  6. The shop floor can only work with the plan they have been given…From what I hear the “plan” changes all of the time along with the leadership. Too bad for Boeing. Boeing had the starting pay in WA at $12 in 2007 and people were quitting within a month. You cannot get or keep talent with sub par pay

  7. Skilled workers and former NASA employees? Thats like saying im used to scuba dive so I should be fine skydiving. Building airplanes and rockets are close but not quite the same thing. Having to deliver 100 rockets to customers around the world would make a closer comparison. The author didnt say there were only walmart greeters in Charleston only they were not able to produce what was needed. History shows boeing has gone to other states to build and things just have not worked out always as they would hope. An area that has been building airplanes for a few generations ( around 97 years) is bound to have more experience.

  8. I feel bad for all of us in S.C here.
    Our workforce isn`t up to the standards of thew workers in Washington state and wont be for at least 15-20 years.
    What we need to do is unionize and make them make the improvements we need to be the workforce all of us want to think we are, but aren`t

  9. I have a brother-in-law that works for Boeing S.C. He has talked about some of the same problems the other people mentioned. He says there is a lot of whispering about unionizing. I’m glad. I’m from S.C. but I was in a union for a few years in New York. Then I came back home and realized exactly what the union was protecting me against. Luckily I was eventually able to go back to school and leave the blue collar life behind. I had pride in my hard work as a blue collar guy, but I discovered it was never enough in S.C. I was working 60 hours a week and getting “Chinese overtime,” which worked out to about $5 an hour for overtime. I can’t believe some of the things companies do in S.C. are legal. There are a lot of loopholes in the labor laws that companies down here exploit without a second thought. Anyway, I hope S.C. workers realize this and do what is best for them and their families.

  10. Many very good points here… We in Washington and all of you are one…Do not let coorporate greed divide us. You are Americans and are capable of our equal in the work force in this arena…We teach each other…and it takes some time but we all learn fast… We have just been doing the airplane thing for a long long time… Lets work this together and be Union….Send the message to the 27 million dollar a year payed Mcnenrys in this country and to our federal government that We Want Our Country Back…. Approve some bills in the white house to stop the coorporate greed and stop giving all our labor away. Sharing some of it with the world is a good thing but at a smaller scale… All of us, our parent’s thru great grandparent have been 2nd to none for a 100 hears…Don’t let them continue to give it away and sell us out… The union labor is probly less than 5% the cost of a jet yet they never mention how much the salery work force costs them and it is far more than the unionized labor…. Keep the coments comming… Let our public know how things really are instead of watching all the surpressed new’s T.V or paper… They never print our true to life comments……..

  11. IKEA

    Boeing Everett, Washington is having
    to finish and repair wing sections
    coming from Boeing S.C. due to sloppy
    work.

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