Monday, May 6, 2013

Boeing Puts Its Money Where Its Plans Go: To Invest $1 Billion In South Carolina "To The MAX 737"

The year is 2015, and one more piece of the puzzle is inserted on Boeings aviation game board. A billion dollar plant in Charleston area will open next to the new 787 plant, employing more than 2,000 employees to the Max. Engineers will be assigned by existing engineering  mentors from the Northwest and additional aerospace engineers throughout the pool of available help for this process. The concern for the Renton production site is how much of the action on the 737 will remain for them in production.  There is a significant amount of work for Renton manufacturing where it needs to retire the Next Generation order book before the two plants assembly line is required for duo delivery slot from both The Max and the NG lines of 737.

Juggling of order books will be applied judiciously for optimal effect. A start up process for the Max would disrupt Renten Productivity on the NG backlog. A MAX start up in Charleston will allow Boeing to bring season veterans into a new factory and find out how to make this new technology aircraft without impedances applied on an existing factory floor. It will take from 2015 to 2017 before delivery production will start to crank-up from the new site at which time, Renton will be closer to end of the NG Order Book.

Tacoma News Tribune Starter News Piece 

From Boeing's own website here is the tale of the order Book
Unfilled Orders by ModelThrough April 2013
Model SeriesOrdersDeliveriesUnfilled
Total Unfilled Orders4447
Total Unfilled for 7373138

Out of  7,435  737 orders taken there remains 3,138 planes to build.

Renton will produce everything down through the 737-900ER Box and then retire the NG backlog. This total is 1904 aircraft for non Max aircraft. What is not known is how many of these aircraft could be converted over to the Max line. But 1904 is sufficient enough number to keep Boeing Renton going for almost four years at 42 a month, or Maxing out production in the year 2017 where they will need to retool for the Max and split with Charleston on its delivery aircraft. By 2015, Charleston will be in its initial phase of finalizing the deal and will be receiving Renton team members for training, engineering and testing.  Secondly, how many more Max aircraft will there be on the order book by 2015 or by four years and how many NG will there be added to Renton's Work Orders. If renton receives another 200-300 NG in the next 4 years they will be ready to handle order backlog until 2018 closes. 2019 will be the year both facilities will be fighting for "King of The Mountain Honors" with Charleston having a definite head start.

Renton has flexibility after 2017:

  • They may take in other Boeing programs that supplement Everett.
  • Co-produce the MAX
  • Establish a new niche for Boeing's X programs
  • Have long, long talks with its Renton workforce.
  • Transition in the works by 2020 for Renton. Company wide real estate is a premium.
Renton has a short narrow runway:

Wikipedia referance:

It has one runway designated 16/34 with an asphalt and concrete surface measuring 5,382 by 200 feet (1,640 x 61 m).[1] The runway was resurfaced and realigned in August 2009; prior to this time, it was designated 15/33.[4]

Aerial Renton Airport during Resurfacing Aug 2009.jpg

Renton is either trapped in a box or it it is a real opportunity to expand the smaller projects with military and specialty technology such as the X-48C project if it goes into production in 10 years or less. This will be a production site but it remains limited by nature to single isle and small aircraft. Charleston operation has only the sky for limiting aircraft types. Everett has fewer options due to expansion in place and other encroachments. But those concerns are remapped within the property with continuous plans for new projects.  The airport is owned by City of Renton and is important to its economy.  Cost of relocation would be a premium cost, but Boeing drops another billion into Charleston is a capital investment of great importance and commitment.  Boeing could not do that at Renton. The value added onto the Charleston best uses the region as Boeing's  new aerospace center.  The hand writing is on the wall due to space considerations of current aircraft in production and on the drawing board. Any decisions will not be based on sentiments or loyalty, but more about gaining an advantage from the ground up to meet the competition.

Renton is a valuable property, but will be best used in  different Boeing capacities as a unique aerospace center, once the "other" plant is operational, and the back log is caught up on the NG. Then Boeing should have another important plan ready for Renton.  Boeing isn't sinking another 1 billion into the Renton facility even though it upping its productivity to 42 units a month. It has to remove the NG backlog so Boeing can make more sales on the Max destined to the Charleston order book, which has the money and space that Renton facility cannot utilize.

Renton Airport top of picture, Boeing 737 NG Manufacturing Facilities Center and angling towards right top.