Boeing’s impact on South Carolina is best summarized with an analogy: the manufacturing giant is to S.C. aerospace what BMW is to the state’s auto industry.

Both are linchpins in the state’s industrial sector, with each employing thousands of workers and relying on scores of suppliers from around the state. Both have also changed how people inside the state and beyond view South Carolina.

Boeing moved into its 1.2 million-square-foot North Charleston site in 2011, after purchasing the facilities of suppliers Vought and Global Aeronautica. It has continued to grow since then, and today its Lowcountry location is the company’s lone production site for Boeing’s 787 Dreamliner aircraft.

While not the first aerospace company to move into South Carolina, Boeing is the largest, with more than 5,000 employees. In addition to the assembly plant, the company also has a research and technology center, an engineering center, and a propulsion site in the Lowcountry. Boeing’s presence has helped South Carolina has become a key player in the nation’s aerospace sector.

Today, the state is a significant player in both the commercial and military aviation industries, and it is home to more than 400 aerospace and aviation companies, according to the S.C. Department of Commerce.

“Boeing was absolutely the key to the aerospace industry in South Carolina,” said Hossein Haj-Hariri, dean of the College of Engineering and Computing at the University of South Carolina. 

“It was huge of Boeing to pick up from Seattle and come here,” added Haj-Hariri, whose department oversees the McNair Center for Aerospace Innovation and Research. “It was a seismic change because it wasn’t just Boeing, but also all the suppliers that moved here, too.”

South Carolina’s burgeoning role in the sector is coming at the right time, as analysts are bullish on the aerospace and defense industry, with expectations that it will grow at a 12 percent clip annually over the next five years, from $700 billion last year to more than $1 trillion by 2026, according to the Aerospace & Defense Global Market Report 2022.

While the sector has provided tens of thousands of high-quality jobs in the state, it’s also raised questions about state-funded economic incentives, which some complain is nothing more than corporate welfare. This includes nearly $60 million the state has spent to help train workers for Boeing and additional tens of millions of dollars being set aside for the manufacturing giant to expand in the state.

One thing about which there is no debate is that the state’s manufacturing landscape has changed sharply since the beginning of the century.

South Carolina has a long history in manufacturing, particularly in textiles, but its profile changed significantly in the 1990s, when automaker BMW chose Spartanburg for a U.S. assembly site. 

BMW has expanded the site substantially during the past three decades, investing more than $12 billion in the facility. In 2021, it produced 433,810 vehicles and today employs more than 11,000.

In the years since, other big names have built operations in the state, including automakers Volvo and Mercedes-Benz, and tire producers such as Michelin, Bridgestone and Continental. With them have come hundreds of suppliers, located throughout the state.

Just as BMW helped turn South Carolina into an auto manufacturing hub, Boeing’s arrival in 2009 turned the state into a player in the aeronautics industry. Today, Boeing, with more than 5,000 employees, has the second-largest manufacturing site in South Carolina, after BMW.

“Boeing was a game-changer,” said Robert Elliott, dean of manufacturing and maintenance at Trident Technical College, which runs the South Carolina Aeronautical Training Center. “Boeing’s arrival in our state and all the supply companies they brought with them was incredibly important.”

Boeing may be the best-known of the aerospace companies operating in the Palmetto State, but it wasn’t the first.

Lockheed-Martin, for example, opened a site in Greenville in 1984. Today, it is the company’s sole location for assembling F-16 fighter jets and is in the process of ramping up to 1,200 employees.

The industry’s anticipated growth is significant because aviation has experienced a bumpy ride during the past two-plus years. The Covid-19 pandemic resulted in a sharp decline in passenger travel, left air carriers and suppliers hurting, and saw the industry beset by uncertainty.

Boeing saw revenues decline from $101.1 billion in 2017 to $60.7 billion last year. Some of this was the result of a struggling aviation industry, and some was because of internal issues.

The latter began when European carrier KLM sounded an alarm in 2019 that the quality of manufacturing evident in the 787s it received was below acceptable standards. Over the next two-plus years, additional quality-control issues surfaced with Dreamliners.

The company initially grounded a small number of planes, and then found itself under the scrutiny of the Federal Aviation Administration, which began investigating conformance issues going back to the introduction of 787s in 2011.

Among issues: the discovery of production flaws, including tiny gaps where panels of the carbon-composite fuselage are joined, and faulty titanium parts from a supplier, the Associated Press reported.

In October 2020 Boeing halted deliveries of 787s. It briefly resumed in March 2021 but stopped again two months later. Also in March 2021, the FAA withdrew Boeing’s ability to inspect and sign off on new Dreamliners. It wasn’t until July 2022 that the agency gave its approval to Boeing’s revised certification program. In August Boeing resumed deliveries.

Boeing has estimated that problems connected with 787s will cost the company $2 billion. Layoffs attributed by Boeing to the COVID pandemic took place at operations around the country, and it appears to have reduced employment in South Carolina by approximately 2,000 during the period.

Dreamliners continued to fly during this period, but production of 787s slowed substantially. The company anticipates continuing to produce 787s at a very slow rate until it has more deliveries under its belt, with the plan to gradually return to production of five Dreamliners per month.

Another issue the company has been involved with is securing additional funding from the state.

South Carolina officials are seeking $70 million for Boeing and Volvo to help with future expansion.

Of that amount, $42 million would go toward relocating the entrance to Charleston International Airport and moving a radar facility off state-owned property that’s been promised to Boeing if the company decides to expand its 787 Dreamliner campus in North Charleston, according to a report in the Charleston Post & Courier.

“The aerospace industry will rebound, and when it does, South Carolina must be prepared to remain competitive for Boeing’s growth, including the potential to add another aircraft model,” Commerce said in a document explaining the project.

Boeing has been the recipient of state largesse before. As part of a significant taxpayer-funded incentives package to bring the company to South Carolina, Boeing received noteworthy concessions to help it offset costs in areas such as worker training.

When the package was being put together prior to Boeing’s arrival in S.C., state officials estimated it would cost nearly $34 million over 15 years to train Boeing workers.

But The Nerve, the news operation of the South Carolina Policy Council, reported last year that during the previous decade the state had spent far more than that amount, some $58.3 million, to train Boeing workers through the S.C. Technical College System’s “readySC” program.

Economic incentives can be a hot-button issue, as elected officials seek to both spur economic development and generate positive headlines for themselves, while minimizing financial and opportunity costs.

Despite the struggles of the past two years, Boeing’s Lowcountry site did receive some good news during the pandemic. In 2020 Boeing announced it would consolidate assembly of 787 Dreamliners at the North Charleston facility. Boeing began producing 787s at its Everett, Washington, location in 2007, but opted to move all assembly to South Carolina in a cost-saving move, the Seattle Times reported. 

Also, 787s were the most utilized wide-body aircraft in use during the pandemic, according to Boeing.

Despite the industry’s ups and downs over the past two-plus years, state officials remain bullish on South Carolina’s aerospace sector.

Employment in the aerospace cluster is growing at a rate eight times greater than the state’s average, and annual pay for aerospace workers is estimated at $81,114, compared to the state average of $44,986.

“In the past 10 years, aerospace-related companies have announced $2.2 billion in announced investment and over 4,400 new jobs,” according to Alex Clark, deputy director of marketing and communications for the S.C. Department of Commerce. “The data we have underscores that this industry is well established, continues to grow and South Carolina has room for more.”