Sanford signs incentive package for Boeing
October 30, 2009 by senatormcconnell
Boeing’s decision to land a new aircraft assembly plant in South Carolina should mean thousands of jobs beyond the plant walls.
Gov. Mark Sanford on Friday signed an incentive package that includes $170 million in low-interest loans used to lure Boeing.
State Senate President Pro Tem Glenn McConnell says he expects two to three spinoff jobs for each of the 3,800 Boeing hopes to create in seven years. That’s about the typical spinoff for an industrial announcement.
One aviation analyst says there won’t be many new suppliers because the plant will put together large components made elsewhere.
But Richard Aboulafia says Boeing’s decision is an endorsement for business in South Carolina and should mean more investment in future.
McConnell: South Carolina Will Never Be The Same
October 29, 2009 by senatormcconnell
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S.C. lands Boeing
October 29, 2009 by senatormcconnell
Lawmakers celebrate as deal is sealed
The landing was delayed, but Boeing has arrived in South Carolina and is bringing along 3,800 jobs to build its new, state-of-the-art jet.
Jilting its longtime Washington state manufacturing base, the Chicago-based airplane maker said Wednesday it will build its second 787 Dreamliner assembly line in North Charleston.
State and local officials, who unsuccessfully sought Boeing’s first 787 assembly line in 2003, expect Boeing to break ground on the plant within a month, as the company moves to get the line up and running by 2011 to complete backordered planes.
Boeing said it chose the North Charleston site because of its existing facilities at the site, some already working on 787 segments.
“Establishing a second 787 assembly line in Charleston will expand our production capability to meet the market demand for the airplane,” Jim Albaugh, chief executive of Boeing Commercial Airplanes, said in a news release. “This decision allows us to continue building on the synergies we have established in South Carolina.”
The General Assembly also approved a massive tax incentive package, part of a host of promises made to Boeing since the company first discussed the possibility of locating in South Carolina in August. The package would eliminate income and other taxes for the company for a decade and provide low-interest construction bonds.
Gov. Mark Sanford, who previously opposed similar packages, said Wednesday he would sign the incentives bill.
To qualify for the incentives, Boeing pledged to invest at least $750 million and create 3,800 jobs in the state within seven years. State officials expect those number to grow.
Senate Finance Committee chairman Hugh Leatherman, R-Florence and one of the chief negotiators, said Boeing’s move could have an initial economic impact of up to $450 million a year, even after incentives are taken into account.
That does not include other economic pluses that will spring from the plant. “The effects on our economy will be mind-boggling,” said Leatherman.
House Speaker Bobby Harrell, R-Charleston, said the need for legislators to return in special session this week – to restore federal jobless benefits that unemployed South Carolinians lost because of an error not corrected earlier this year – gave lawmakers the chance to OK the incentives.
Harrell said he does not think the deal hinged on incentives, though leaders had planned to call lawmakers back into session, if needed, to approve them.
“The timing was incredible,” Harrell said. “We were fortunate their board was meeting at the same week.”
The Seattle Times reported the company could move facilities to South Carolina, but Boeing’s Albaugh said his company remains committed to Washington.
“The Puget Sound region is the headquarters of Boeing Commercial Airplanes. Everett will continue to design and produce airplanes, including the 787, and there is tremendous opportunity for our current and future products here,” Albaugh said in his news release.
S.C. officials expect a network of companies will spring up across the state to support Boeing’s operations, just as businesses sprang up around BMW’s Upstate plant, opened in the 1990s. Commerce Secretary Joe Taylor said his agency already is courting some of those firms and will advise existing S.C. businesses on opportunities.
Most credited a team of lawmakers, led by Leatherman, and Taylor for sealing the deal.
But it did not come easily.
Lawmakers said Boeing needed assurances S.C. workers were up to the work, and the state could provide training.
Senate President Pro Tempore Glenn McConnell, R-Charleston, Harrell, Leatherman and aides were in and out of closed-door meetings Wednesday with staffers, attorneys and Boeing representatives. Outside, lawmakers and lobbyists milled about, likening it to waiting on the Vatican’s cardinals to send up a puff of smoke to signal a decision on a pope.
Other lawmakers acknowledged concerns South Carolina could be a pawn in high-stakes negotiations between Boeing and Washington state, the other finalist for the new plant.
“Any two parties in a negotiation could play one party against another party that made an offer,” state Sen. Chip Campsen, R-Charleston said while waiting on the announcement. “It’s always a risk you run. … (But) I think they are legitimately interested in us.”
Later, Campsen said the state’s lower taxes and good quality of life were crucial factors in attracting Boeing.
When the Senate approved the incentives earlier Wednesday, “We had no idea Boeing was going to come here,” Leatherman said. “As late as 4:30 (p.m. Wednesday), there was no decision.”
A call from Boeing came about 5 p.m., unleashing cheers in the Senate while House lawmakers donned palmetto tree pins with wings. In the lobby, Sanford waited to personally thank Leatherman and McConnell – both of whom he frequently has criticized in the past.
“In terms of jobs, it’s an incredible shot in the arm,” Sanford said, in a nod to the state’s 11.6 percent jobless rate. “Timing is of the essence.”
Why S.C.?
Some of the reasons Boeing chose S.C. over Washington
Boeing’s workers in North Charleston are nonunion and lower paid than their Washington state counterparts. In September, the Charleston workers voted to oust the Machinists union.
The S.C. General Assembly offered large financial incentives – including $170 million for infrastructure and other tax breaks – to lower Boeing’s costs.
State-funded training at tech colleges diminishes the disadvantage of local workers’ inexperience. Charleston’s Trident Technical College has classes geared specifically to Boeing’s needs.
Charleston has one of the deepest ports on the East Coast and an airport with runways long enough to handle the largest airplanes built.
Boeing also reportedly was unhappy with the business climate in Washington state – unionized workers there who went on costly strikes, and that state’s shortage of college-educated engineers.
Way to go on Boeing
October 29, 2009 by senatormcconnell
The big news Wednesday afternoon was a Dreamliner come true: Boeing has decided to build a massive facility in North Charleston for production of its 787 airliner. That landmark victory for economic development in our community and state will bring thousands of well-paying jobs — an especially impressive and important achievement during these tough times. Many people can claim a fair share of the credit for this triumph. That happy group includes the state lawmakers who, while meeting in an extended session Wednesday, passed an economic incentive package to help lure the aircraft manufacturing giant.
Read more
Boeing lands here
October 29, 2009 by senatormcconnell
Aviation giant expects to break ground on new assembly plant within the next few weeks
North Charleston won the fiercely fought battle for a Boeing 787 aircraft assembly plant Wednesday, thrusting South Carolina onto the world stage of aircraft manufacturing.
The Boeing Co. will build the new line at its Charleston International Airport property instead of in Everett, Wash., the nation’s aviation nerve center and longtime home of the company’s commercial airplane business.
The decision was announced after state lawmakers wrapped up a two-day special session in which they approved a rich basket of financial incentives for Boeing valued at $450 million by state Sen. Hugh Leatherman, a Florence Republican who heads the Senate Finance Committee. Read more
Ripple effect to magnify benefits
October 29, 2009 by senatormcconnell
Boeing’s commitment to North Charleston could kickstart economic recovery in South Carolina, a leading economist said Wednesday.
And it could buff up the state’s tarnished national image after being the butt of jokes for months because of Gov. Mark Sanford’s extramarital affair and U.S. Rep. Joe Wilson’s “You lie!” outburst.
“If Mark Sanford goes off to Argentina, people might laugh at us,” USC economist Doug Woodward said. “But what they are seeing now is what’s important. It’s going to be a story that resonates for decades, rather than the political stories that have been circulating recently.” Read more
Boeing lands in North Charleston
October 29, 2009 by senatormcconnell
North Charleston will be home to a new Boeing 787 jet assembly plant, ending a hotly sought-after deal that thrusts the state into the front lines of aircraft manufacturing.
North Charleston won the fiercely fought battle for a Boeing 787 aircraft assembly plant Wednesday, thrusting South Carolina onto the world stage of aircraft manufacturing.
The Boeing Co. will build the new line at its Charleston International Airport property instead of Everett, Wash., the nation’s aviation nerve center and longtime home of the company’s commercial airplane business. Read more
S.C. officials worked years to win the 787 plant prize
October 29, 2009 by senatormcconnell
While Boeing Co. did not publicly disclose plans for a second 787 assembly line until this year, the effort to lure the investment and jobs to South Carolina can be traced back to June 2003.
It was then that Gov. Mark Sanford’s office and then-Commerce Secretary Bob Faith acknowledged the state had received a “request for proposal” from the airplane manufacturer.
At the time, Boeing was looking at cities all over the country for places to build the first assembly line for the 787 Dreamliner jet, then called the 7E7.
The company sent out a 27-page questionnaire to narrow the list of candidates.
In the tight-lipped world of economic development, Boeing’s eagerness to publicize the early phase of its site selection was highly unorthodox. It was dubbed “an open beauty contest.”
“We’re hot and heavy after it,” Faith said at the time. “We have as good a shot as anybody.”
A site at Charleston International Airport ended up as one of the four finalists.
But it was not to be. In December of that year, Boeing informed crestfallen officials it had elected to build the line at its longtime commercial aircraft manufacturing hub in Everett, Wash. The Evergreen State also put together a $3.2 billion incentive package South Carolina declined to match, officials said at the time.
Also, a corporate shake-up that resulted in the departure of Boeing’s chief financial officer and chief executive officer prompted the board of directors to think more conservatively about the site. A brand new plant in South Carolina would have been a very bold move for the aerospace giant, given its long history in the Seattle area.
It was not long before a consolation prize emerged in form of Dallas-based Vought Aircraft Industries, which needed a new factory to build rear fuselage sections for the 787. That relationship with Boeing steered Vought in late 2004 to build its factory the Charleston airport site, along with another Dreamliner supplier, Global Aeronautica. Read more
S.C. lands Boeing
October 29, 2009 by senatormcconnell
Lawmakers celebrate as deal is sealed
The landing was delayed, but Boeing has arrived in South Carolina and is bringing along 3,800 jobs to build its new, state-of-the-art jet.
Jilting its longtime Washington state manufacturing base, the Chicago-based airplane maker said Wednesday it will build its second 787 Dreamliner assembly line in North Charleston. Read more
SC gives 1st nod to package meant to lure Boeing
October 28, 2009 by senatormcconnell
An economic incentive package that appears tailored to bring a massive Boeing assembly facility to North Charleston crossed its first legislative hurdle Tuesday, winning approval in a state Senate committee.
The Finance Committee OK’d low-interest construction bonds and incentives that include a sales tax exemption on fuel used in test flights. To qualify, a company would have to bring at least 3,800 full-time jobs and at least $750 million in investment to the state over seven years.
“We’ve got an opportunity before us now … to bring jobs to our people that are so desperately needed,” said committee chairman Hugh Leatherman, R-Florence.
The measure, which does not name a specific company, was headed next to the full Senate and leaders believe it could be approved this week.
The lawmakers are meeting as Boeing decides where to site a second assembly line for the 787 airliner. Everett, Wash., also is competing for the facility.
Sen. Robert Ford said legislative leaders have instructed lawmakers not to discuss the company because the situation is too sensitive.
“Of course, for any district in the world, it would be a major, major employment opportunity,” said the Charleston Democrat, whose district includes Boeing’s existing North Charleston plant which makes fuselage sections for the 787.
The five-part legislation, which expands existing law, includes sales tax incentives that would exempt fuel used in test flights and flights to transfer aircraft between manufacturing facilities. It would also exempt computer equipment purchases and allow a qualifying company to immediately pay no sales tax on construction materials, rather than wait for a 2011 phase-in.
It would ensure the company could negotiate with state officials to pay little corporate income taxes for 10 years. It deletes the minimum pay requirement from the break already allowed for companies investing less and creating fewer jobs.
The proposal would also allow the state to issue up to $170 million of economic development bonds that would allow a company to build using a lower interest rate, making the project cheaper, if approved by the Legislature on a two-thirds vote.
Business leaders praised the proposal.
“I think if what we believe is going to happen happens, without talking about a name, this is almost as big as” Michelin’s expansion and BMW’s move to South Carolina more than a decade ago, said Otis Rawl, president of the state Chamber of Commerce. “This is another one of those marquee companies that puts South Carolina not only on a national map but a global map.”
Rawl said it’s the first time legislators have addressed economic incentives in a special session.
“The fact that we’re here sends a message to whoever the prospect is,” Sen. Larry Martin, R-Pickens, said about an impending announcement, while declining to name a company. “We’d have walked to Columbia for that.”
Senators did not discuss a price tag for the incentives, and business leaders declined to do so.
“The fiscal impact of the project itself far exceeds what state’s putting in this thing,” said South Carolina Manufacturers Alliance president Lewis Gossett. “It’s going to be a net gain, when you’re talking something on this scale in manufacturing.”
John Cawley, the economic development coordinator for North Charleston where Boeing is considering building a second production line, declined to comment on the economic incentives, saying he did not know what they were.
He also said he could not comment on any Boeing plans for the city.
Boeing announced in August that it was seeking permits to expand its North Charleston plant, but said it was simply a procedural step because of the lead time required to secure permits.
Last month, plant workers voted against continued union representation.
Boeing has said it plans to make a decision on a second assembly line in the coming weeks.
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