Boeing has officially announced it is shutting down its 787 Dreamliner production line in Everett, WA. The facility will cease production of 787s by mid-2021 as Boeing battles substantial financial losses due to the ongoing COVID-19 pandemic.
The aviation manufacturer will consolidate its 787 production at its plant in North Charleston, SC. While the transition occurs, production will continue in Everett for smaller models of the 787 as well as 747, 767 and 777 planes.
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How will this impact production?
Boeing has decided to consolidate its production of 787 aircraft at its large facility in North Charleston to improve efficiency and costs. The plant runs with lower operating and labor costs, allowing Boeing to trim as many overheads as possible.
The manufacturer still intends to meet its previous production targets despite the closure of the Everett line. In a statement on Thursday, Boeing said,
“Production of the smaller 787 models will continue in Everett until the program transitions to the previously-announced production rate of six airplanes a month in 2021.”
The company conducted feasibility studies back in July which explored the impact of consolidation. These studies demonstrated that concentrating Dreamliner production at a single site would lead to significant efficiency improvements.
Changes at the Everett facility
While Everett will no longer participate in 787 manufacturing, the facility will still be involved in 747, 767 and 777 production. Despite this, the Seattle Times estimates that the decision will lead to around 1,000 redundancies in Everett, inevitably leading to additional job losses across the broader Seattle area.
Boeing previously announced some 12,000 jobs will be cut, most of which are also in the Seattle area. According to President and CEO of Boeing Commercial Airplanes, Stan Deal, the Everett facility is still very much in their future plans. He said,
“Our team in Puget Sound will continue to focus on efficiently building our 737, 747, 767 and 777 airplane families, and both sites will drive Boeing initiatives to further enhance safety, quality, and operational excellence.”
How will Boeing be affected?
Despite potential improvements in efficiency, the decision to scrap 787 production in Everett could spell trouble for the company. Boeing has long enjoyed favorable tax breaks in the state of Washington which are now under threat. Governor Jay Inslee stated,
“Boeing’s decision to take the 787 to South Carolina necessitates a review of our partnership and the company’s favorable tax treatment.”
Aviation manufacturers like Boeing have been hit particularly hard by the COVID-19 crisis. Many carriers are unwilling to purchase new aircraft in the current climate. Having already expressed its intentions to cut 10% of the workforce back in April, Boeing has seen a wave of order cancellation and deferrals further hit its balance sheet.
How significant a loss is this for the Pacific Northwest’s aviation industry? Leave your thoughts in the comments below.