Source: China State Council Information Office
The Boeing Company said on Thursday it will consolidate production of 787 jets at its facility in North Charleston, South Carolina, starting in mid-2021, according to the company’s best estimate.
The decision comes as the company is strategically taking action to preserve liquidity and reposition certain lines of business in the current global environment to enhance efficiency and improve performance for the long-term, according to the announcement.
“Its production system has been adjusted to accommodate the current difficult market environment while positioning the 787 family to ramp up production as air travel increases,” the company said in the announcement.
“As our customers manage through the unprecedented global pandemic, to ensure the long-term success of the 787 program, we are consolidating 787 production in South Carolina,” said Stan Deal, president and chief executive officer of Boeing Commercial Airplanes.
“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,” he added.
The company began assembling 787-8 and 787-9 airplanes at its Everett site in 2007, and brought the North Charleston facility on line as a second final assembly line in 2010. Only the North Charleston site is set up to build the larger 787-10 model. 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.
In July, Boeing announced an in-depth study into the feasibility of producing 787s at a single location. The 787 study is part of an enterprise review underway to reassess all aspects of Boeing’s facility footprint, organizational structure, portfolio and investment mix, and supply chain health and stability.
The analysis confirmed the feasibility and efficiency gains created by consolidation, which enables the company to accelerate improvements and target investments to better support customers, the announcement said.
Boeing said it is assessing potential impacts to employment in Everett and North Charleston and will communicate any changes directly to its employees.
The company in late July reported second-quarter revenue of 11.8 billion U.S. dollars, GAAP loss per share of 4.20 dollars, primarily reflecting the impacts of COVID-19 and the 737 MAX grounding. The COVID-19 pandemic has significantly impacted air travel and reduced near-term demand, resulting in lower production and delivery rate assumptions.
In Commercial Airplanes Programs, Boeing has delivered a total of 20 aircraft in the second quarter of 2020. The delivery included two 777Fs to China Southern Airlines in May. The backlog included over 4,500 airplanes valued at 326 billion U.S. dollars.
To align to the sharp reduction in commercial market demand in light of COVID-19, the company is taking several actions including further adjusting commercial airplane production rates and reducing employment levels.