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Boeing Gets Incentive Package From South Carolina

Monday, 02 Nov 2009 10:15 AM

CHARLESTON, S.C. -- A $750 million Boeing 787 assembly plant is expected to bring thousands of badly needed jobs to South Carolina's ailing economy and, officials hope, a closer look at the state by other industrial prospects.

"There will be corporations that will chose to make South Carolina home that I suspect would not have were it not for this investment," Gov. Mark Sanford said Friday after signing the incentive package that clears the way for the largest single industrial investment in South Carolina history.

Boeing announced Wednesday it would open a second assembly line for its new 787 with nonunion workers in South Carolina, not in Everett, Wash., where it has built planes for generations.

"They made a difficult but ultimately wise decision," Sanford said. "That was not a decision against any worker in the Northwest. It was simply a decision about the larger strategic question of 'Do you put all your eggs in one basket?'"

He was joined by about two dozen lawmakers in a building near Charleston International Airport where the roar of jet engines could be heard in the distance.

In July, Boeing bought a factory in North Charleston that makes 787 fuselage parts and the company also owns a stake in a second fuselage plant here.

Boeing expects to create 3,800 new jobs in seven years at the assembly plant. Construction, which begins later this year, is expected to employ 2,000 — welcome news in a state with an 11.6% unemployment rate, the sixth highest in the nation.

Officials have compared the announcement to the state's other prize industrial catch: the BMW manufacturing plant opened in upstate South Carolina 15 years ago.

When BMW decided in 1992 to build in Spartanburg County, it promised to create 2,000 jobs and invest $500 million. The company estimates its investments through last June at $6.3 billion — including $2.1 billion through suppliers. It now employs 5,000.

Unlike BMW, there won't be a lot of aeronautics suppliers coming to North Charleston, said aerospace analyst Richard Aboulafia of the Teal Group.

"The 787 is meant to have very little manufacturing activity at the top end," he said. "That reduces the importance of the final location to suppliers. The idea is these major subassemblies come flying in and get assembled."

But the Boeing decision is expected to help in other industrial recruiting.

"This is a major company everybody knows. It will help attract other attention," said University of South Carolina economics professor Doug Woodward. "This is tremendous news, historic."

"The spinoff, instead of talking about the multiplier in jobs, I think is going to be in the industries that now take a serious look at South Carolina because Boeing did," said state Senate President Pro Tem Glenn McConnell.

"The message to the international global business community is South Carolina is open for business," said State House Speaker Bobby Harrell. "We want you to come here and we want the jobs here. We will negotiate. We will beat other states and we will fix this economy. "

The Boeing incentive includes up to $170 million in low-interest loans for construction, plus sales tax exemptions for computers, material and fuel used in test flights. It allows Boeing to pay very little corporate income tax for 10 years, by tying those taxes to in-state aircraft sales.

BMW got $130 million in incentives — $200 million in today's dollars — including tax incentives, road improvements and job training.

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CHARLESTON, S.C. -- A $750 million Boeing 787 assembly plant is expected to bring thousands of badly needed jobs to South Carolina's ailing economy and, officials hope, a closer look at the state by other industrial prospects."There will be corporations that will chose to...
boeing
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2009-15-02
Monday, 02 Nov 2009 10:15 AM
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