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The Boeing Effect

The Boeing Effect
March 2015
How the aerospace giant’s North Charleston presence continues to energize the local economy

On a sun-drenched morning in June 2006, 100 people—perhaps 150 counting every politician, reporter, and businessperson on hand—assembled in one corner of a massive new 342,000-square-foot building near the airport to celebrate word that the local outpost of Pennsylvania-based Vought Aircraft Industries was about to begin production of fuselage sections for Boeing’s new 787 Dreamliner. “It’s a great day,” said then-Governor Mark Sanford as he greeted one enthused attendee after another. Not far away, a journalist surveyed the enormous structure. “If this doesn’t work out, it’ll make a heck of a warehouse for Walmart,” he said, eliciting a nervous chuckle from those around him.

Of course, we all know the nation’s largest retailer never acquired that prime location. Instead, in July 2009, Boeing itself took over the site and the local outpost of Vought, paying $580 million and forgiving some $422 million in advance payments to speed production for the new passenger jet. With that move, Boeing became the biggest economic development story in the state’s history. Now into its sixth year in the Lowcountry, the aerospace giant employs nearly 8,500 residents and, with a dramatic expansion underway, promises to employ at least another 2,000 by 2020.

According to a report released last August by the S.C. Council on Competitiveness, “since Boeing’s arrival in South Carolina, the aerospace cluster has generated approximately the same number of direct jobs per year as the automotive cluster did between 1990 and 2007 following the arrival of BMW.” The aircraft giant’s growing presence in the area has been like a magnet for other industry firms. To cite just one example, in early 2014, one of Boeing’s largest suppliers of composite material, Tokyo-based Toray Industries Inc., announced plans to build a plant in Spartanburg and hire 500 to staff it over the next decade.

Similar developments are playing out closer to home. Boeing supplier PacRim Aerospace, an engineering firm based in Kirkland, Washington, has opened an office on East Bay Street and plans to add a second, larger outpost closer to Boeing’s North Charleston operations in the near future. Company officials have said by the time the second office is up and running, the firm will employ about 100 locally. And in February 2014, Everett, Washington’s Kaman Engineering Services opened an office at the Clemson University Restoration Institute to support the 787 program. Looking ahead, 60 more jobs are coming to the area via Senior Aerospace AMT, an Arlington, Washington-headquartered firm locating a satellite office in Charleston County.

Still, all of these events have almost been eclipsed by Boeing’s own activity and growth. Late last year, the firm demolished the old South Carolina Research Authority building on International Boulevard and cleared the surrounding land to make way for a 230,000-square-foot, dual-bay paint hangar and taxi-way. The new facilities will allow the company to further consolidate 787 production in the Lowcountry, painting purchasing airlines’ colors on Dreamliners assembled here rather than flying them to California or Texas and back. The paint hangar is scheduled to be completed mid-2016. And more recently, the firm held the grand opening for the 225,000-square-foot propulsion center in nearby Palmetto Commerce Park, where engine components for yet another of its new aircraft, the 737 MAX, will be built.

Perhaps the biggest ripple of all has been Boeing’s effect on employment growth rates. According to the Council on Competitiveness study, the state’s aerospace cluster has experienced one of the highest annual growth rates in employment among all industries in South Carolina over the last decade, an average of 11.4 percent, approximately eight times higher than the 1.4 percent average annual growth rate for the state overall. The study attributes much of that to Boeing’s arrival in the Lowcountry.

And that is just the beginning. Boeing is now in the process of clearing the 500 acres it secured directly across from the paint facility site. The company has been largely mum about its plans for the land, other than saying it will invest another $1 billion in its aerospace campus. Inside the two-million square feet of buildings Boeing already has on its campus, workers are turning out three 787s—with a list price of about $250 million each—a month while their counterparts in the corporation’s larger Seattle facility make seven. In 2016, the production rate will climb to 12 a month between the two plants, and in 2019, that number is expected to reach 14 a month.