Boeing to ship all four 787 Dreamliners built this year to Air India

Boeing Co will ship all four 787 composite-plastic Dreamliners assembled this year in its new South Carolina plant to Air India Ltd.

The first of the jets rolled out yesterday from a 1.24 million-square-foot (115,000-square metre) hangar near Charleston, South Carolina and is expected to start flying in three to four weeks. Air India would take delivery at midyear, according to Jack Jones, Boeing South Carolina vice president.

''I know we're a little late delivering this airplane, but when they get it, they're going to say it was worth it,'' Jim Albaugh, head of Boeing's commercial airplane division, told employees and South Carolina politicians including governor Nikki Haley and U.S. senator Lindsey Graham.

The development ends over three years of delays and Boeing is seeking to speed up production of the twin-aisle jets to 10 a month by the end of 2013. The company has delivered 11 of the aircraft to Japan Airlines Co and All Nippon Airways Co, according to Marc Birtel, a spokesman.

The planes come with a price tag of $193.5 million. The South Carolina facility, built at a cost of $750 million, opened last year, and will build 3.5 planes a month by the end of 2013 or early 2014, Jones told reporters. The plant is the company's first new commercial-jet factory outside Washington's Puget Sound region, where the company was established. Boeing's decision to build in the state, which bars union membership as an employment condition, led to an accusation from the Machinists union of illegal retaliation for strikes.

The National Labor Relations Board filed a complaint against Boeing, only to withdraw it after Boeing and the union reached a new contract that promised that the upgraded narrow- body 737, the MAX, would be built in the Seattle area.

Albaugh offered no comments regarding any compensation to Air India, though he had last month disputed the Indian government's statement that the planemaker agreed to pay $500 million in compensation because of delays to the jet, that were to be delivered in May 2008.

Air India demanded in February that the company pay up $1 billion after saying in August 2010 that it would seek $840 million. At the time of placing orders, airlines sign for delivery slots, and with penalties for late deliveries like what Boeing is facing for the 787. (See: Air India seeks $1 billion from Boeing for delay in Dreamliner delivery: report (http://www.domain-b.com/aero/airlines/20120314_dreamliner_delivery.html))

Yesterday's development was an important milestone in the Dreamliner saga, featuring the controversial outsourcing of design and manufacturing work. The development was put behind schedule thanks to kinks in the vast global supply chain.

South Carolina has been an important and at the same time an occasionally weak link of the chain.

Problems and inefficiencies at plants owned by Boeing suppliers in South Carolina added to the delays in the 787's development. With a view to regain control of Dreamliner production, Boeing bought portions of the operations of two of its South Carolina partners in 2009.

With the purchase of the two operations, Boeing went on to undertake a $750 million expansion to build Boeing South Carolina.

According to Rob Stallard, an aerospace analyst, it had been pretty impressive how Boeing had got the whole operation together, and was now actually rolling out an aircraft from a factory that has never made a plane before.

Meanwhile, local leaders have used the attention on South Carolina - a state unfriendly to unions, to promote the state as an aerospace manufacturing hub. Now a few aerospace companies have operations in South Carolina, which include Boeing, Honeywell International and Lockheed Martin.

The plant has a 6,000-strong workforce and is expected to create more jobs in the state.