Boeing plans $1 billion expansion in S.C.

Bruce Smith, AP | AP

CHARLESTON, S.C. (AP) — Boeing announced Tuesday it is expanding in South Carolina, investing another $1 billion and creating 2,000 new jobs over eight years.

"Boeing is now a part of the fabric of South Carolina. So this is family and when family does well, we all get excited," Gov. Nikki Haley said at an aerospace conference along with Boeing and state officials.

The state is providing $120 million in incentives for upfront expansion costs such as utilities and site preparation at Boeing's North Charleston manufacturing complex that now employs about 6,000.

The first of the company's 787 Dreamliners built in South Carolina rolled off the assembly line about a year ago. The plant assembles one of the planes a month and within six weeks will be assembling two a month, said Jack Jones, the vice president and general manager of Boeing South Carolina.

The Boeing plant also builds mid- and aft-body assemblies for 787s that are made in South Carolina and Everett, Wash. Jones said seven assemblies are put together each month and the number will increase to 10 this fall.

"We feel that with the Boeing commitment for a billion bucks and an additional 2,000 jobs created, the incentive the state is offering is commensurate with our commitment," he said.

"With unprecedented demand for commercial airplanes — including a forecast of another 34,000 airplanes required over the next 20 years — Boeing is positioned for significant and sustained growth in the years ahead," said a statement released by company spokeswoman Candy Eslinger.

Incentive bills were introduced in both the state House and Senate in Columbia on Tuesday.

Senate Finance Chairman Hugh Leatherman said he's in awe of Boeing's expansion plans. "Our state could very well become the aerospace hub, when you bring all these suppliers in here to supply not only Boeing but possibly Airbus in Alabama," he said.

House Speaker Bobby Harrell issued a statement saying the state and Boeing have been good partners from the start.

"As a Legislature, it's our job to create an environment that fosters economic growth so the private sector can do what government can't, create sustainable new jobs," he said.

Commerce Secretary Bobby Hitt said the incentives are similar to those granted to BMW when its plant in Greer, S.C. expanded after opening in the 1990s.

"BMW made a big move about the same value we're talking about here. You had to be able to improve the infrastructure to be able to grow and expand," he said.

News of the expansion was first reported in The Post and Courier. Jones said the hiring will be spread over the eight years.

Last year, the Charleston County Aviation Authority began the process of selling 320 acres near the North Charleston assembly site. The agency also voted to give Boeing first rights of refusal on nearly 500 more acres, as well as an option to buy another 265 acres. Last year Boeing also bought the South Carolina Research Authority office site near its assembly plant.

"A lot of people are reading into that that it means we're going to bring other programs on down," Jones said. "There's no commitment to that. What it does open up is flexibility. We don't want to be landlocked."

The 787 has been grounded since mid-January because of a problem with smoldering lithium-ion batteries. The company has proposed a fix to federal regulators and last week conducted a final test on the new design that includes more heat insulation and a battery box designed so that any meltdown of the battery vents hot gases outside of the plane. None of the 787s that reported battery problems were built in South Carolina.

Associated Press Writer Seanna Adcox contributed from Columbia, S.C.