Boeing establishing engineering design center, 737 MAX propulsion operation in South Carolina

Boeing establishing engineering design center, 737 MAX propulsion operation in South Carolina


Boeing South Carolina continues to soar.

Originally dedicated to making 787 Dreamliners, the North Charleston operation is now poised to grow in size and scope of work.

The latest boost came Friday when Boeing announced that it is establishing new centers for commercial aircraft engineering design and propulsion in South Carolina. It’s another indication of Boeing’s long-term plans in North Charleston and its intentions to diversify beyond its commercial aircraft stronghold in Washington state.

The local engineering center will be one of three, with the others in Washington and California. In March, Boeing announced that it would take a similar approach to information technology, establishing “centers of excellence” in North Charleston, the Seattle area and St. Louis.

The announcement of the propulsion operation, which will work to enhance the performance of future jets beginning with the 737 MAX, comes weeks after the company said it is bringing 20 workers here to do engine inlet work for the new version of that best-selling single-aisle jet.

The meaning of the moves is not hard to discern, according to one longtime Boeing analyst.

“It’s part of a pattern that emerged with the establishment of 787 Line … in Charleston and the continued acquisition of land,” Scott Hamilton, of Issaquah, Wash.-based aviation consulting firm Leeham Co., wrote in an email Friday. “It’s clear for all to see that Boeing is going to make Charleston a major aerospace cluster.”

Richard Aboulafia, another veteran aviation analyst, agreed, but according to his reading, beefing up engineering in North Charleston isn’t necessarily a negative for the Seattle area.

“It’s an endorsement of South Carolina, absolutely, it’s an endorsement of in-house engineering, but it’s not a shift of current engineering capabilities away from Puget Sound,” said Aboulafia, vice president of analysis with Teal Group in Fairfax, Va.

The announcement comes a week after Boeing held its investor conference in the Lowcountry, where its executives hinted at such shifts. The statement Friday said the moves help “lay the foundation for increased competitiveness” as Boeing strives to meet the “unprecedented demand” for commercial airplanes.

“With these changes, we are structuring Boeing’s engineering operations to support that growth, reduce business risks and to consistently provide the products and services our customers expect,” Mike Delaney, Boeing Commercial Airplanes vice president of engineering, said in a statement.

In an email to the North Charleston workforce, Boeing South Carolina top executive Jack Jones said the moves will reduce the “risk of work disruption and/or recovery time from natural disasters, or man-made events, including acts of terrorism” and allow Boeing to cast a wider net for engineering talent.

According to Jones, the company will name a vice president of engineering for South Carolina and provide more details of the work to be done here “in the coming weeks.”

“Growth in the local center will not occur immediately but will be proportionate with work identified that fits with the strategic capability of the teammates based here,” Jones wrote.

The North Charleston operation, which includes about 1,000 engineering employees, now handles production-support engineering for what is made at the site, and will “increasingly move toward aligning the ‘design where built’ philosophy,” said Boeing spokeswoman Candy Eslinger.

“We expect that team will grow over the next several years,” Eslinger wrote in an email, without offering any more specifics about the timeline or number of jobs involved.

The company said the three engineering design centers will operate independently but also cooperatively with one another and an existing site in Moscow.

The new local propulsion operation is part of “a thoughtful, disciplined approach to building our capability and capacity in integrated propulsion system design,” said Nicole Piasecki, vice president and general manager of Boeing Commercial Airplanes Propulsion Systems Division.

“We intend to be the industry leader in this area,” she said in a statement. “The Propulsion South Carolina team will begin with the design and assembly of the 737 MAX engine nacelle inlet and expand strategically on future airplane programs.”

Aboulafia, of Teal Group, said one of the major questions left unanswered is whether production work will follow the engineering to North Charleston.

“Another issue will be how much propulsion engine build-up work will they do there because that’s where you get larger numbers of jobs,” he said.

Last month Boeing announced it would invest another $1.1 billion and hire 2,000 more people in South Carolina over the next eight years in exchange for a government incentives package that includes $120 million in infrastructure funding.

Lawmakers involved in the deal said roughly half of those jobs would be in information technology, and the rest would be engineering and production positions.

The company also is seeking to buy 320 acres across from its existing factories at Charleston International and has options to buy even more land around the airport.

“Over the next generation, I fully expect Charleston to grow dramatically in all Boeing disciplines: assembly, engineering, production of components and research and development,” wrote Hamilton, the Seattle-area analyst.

“The growth in demand, the land constraints in Washington State’s Puget Sound region and the limits on available manpower-expertise in Washington means that Boeing has to expand, and Charleston is it.”

Reach Brendan Kearney at 937-5906 and follow him on Twitter at @kearney_ brendan.