[IW] Battle for Boeing's Future

[TedM]

http://www.industryweek.com/articles/the_battle_for_boeings_future_19722.aspx?ShowAll=1
(to read entire article)

For over 90 years, Boeing has been synonymous with the Seattle area
for the production of aircraft. But continued labor strife could
threaten that legacy, as the aerospace giant weighs where to locate
the second production line for its 787 Dreamliner.

Aerospace is one of the lifeblood industries of Washington, with
nearly 600 companies employing over 86,000 workers.

Boeing and the International Association of Machinists (IAM) are once
again at a standoff, with the aircraft manufacturer pushing for a no-
strike deal and the union, which signed a pact last fall after a two-
month strike, suggesting the topic be revisited no sooner than 2012.

...Boeing is expected to make a decision on the second production line
sometime in the next six months...

...If Boeing opens the 787 production line in Charleston, other right-
to-work states could enjoy similar competitive advantages, setting the
stage for Washington to perhaps lose assembly for a new jet to replace
the 737 toward the end of the next decade...

...Boeing faces risks as well. The (new) Charleston facility, which
was purchased from Vought Aircraft Industries in early July for
approximately $580 million, would be too small to assemble the
Dreamliner and would require significant construction. Perhaps more
importantly, workers would need to be retrained to bring a second line
into operation. Boeing created a complex global supply chain for its
787 supply system intended to help the company escape rising labor
costs. Instead, the system made it harder to control the production
process as suppliers, such as Vought, hit bottlenecks.

Another factor at play, says Aboulafia, is the rapidly changing nature
of aerospace production, which has seen an increasing emphasis on out-
sourcing and away from a single regional work body.

"The production line is being hallowed out, diminishing the
competitiveness of a trained workforce," says Aboulafia. "It used to
be that having tens of thousands of machinists with that tribal
knowledge of how to build a plane was overwhelmingly important.
Because so much of the work is done elsewhere now, it's much less
important."

Which is one reason that right-to-work states, which dominate the
South and Southwest, could become such a greater player in aerospace
production going forward.

"The automobile industry and the aircraft industries are not the same,
but boy, it teaches you a heck of a lesson," says Aboulafia. "It's
easier to train new people in a more favorable labor climate than it
is to rely on skilled and experienced people in a terrible labor
climate."