EVERETT Wa. (Reuters) - - Boeing (BA.N) executives and state political leaders took sledgehammers to a 1960s office block on Wednesday to help clear the way for a factory that will make composite wings for the company's newest jet, the 777X.
The 1.3-million-square-foot composite wing center at the site of Boeing's massive aircraft assembly operation should cement the company's growth in Washington state for decades to come, and reflects Boeing's desire to bring more of its operations under its own roof. The previous generation of composite wings, used on Boeing's 787 Dreamliner, are made by Mitsubishi Heavy Industries Ltd (7011.T) in Nagoya, Japan.
"We're going to be a here for a long, long time," Boeing Commercial Airplanes Chief Executive Ray Conner told a crowd of about 100 that included Sen. Maria Cantwell (D-WA), Governor Jay Inslee, senior Boeing executives, employees and officials from the International Association of Machinists and Aerospace Workers, District 751.
The decision to build the wing in the U.S. marks a major shift in Boeing's strategy after it outsourced wings and other major pieces of its carbon-composite 787 to suppliers around the world, a process that led to production problems and made the aircraft three years late in reaching customers.
Boeing's decision should also ensure decades of stability and growth for hundreds of suppliers located near the factory and across the state, who will provide crucial 777X components.
"We're bringing this wing home from where it is built for the 787. It is a hometown wing," Gov. Inslee said.
The new wing factory will house three of the world's largest autoclaves used for curing composite material. Each autoclave is large enough to hold two 737 fuselages, Boeing said.
The building will be occupied starting in 2016. The first 777X is due to be delivered in 2020. The new jet, which carries a list price of up to $389 million and has garnered 286 orders, is expected to be 12 percent more fuel efficient than the current 777, which was introduced in 1995 and has become one of Boeing's most popular and reliable wide-body planes.
Conner thanked the machinists' union for approving an eight-year extension to their labor contract earlier this year. The agreement essentially traded union members' defined-benefit pension plan for the guarantee of future work on the 777X.
Boeing said the extension was necessary to ensure the wing factory and the 777X assembly plant would be placed in Washington, and not in another state. But the vote bitterly divided union members.
IAM District 751 Local C President Ron Coen, who was among the dignitaries taking a swing at the wall, told the crowd he didn't agree with the vote.
"But that's the past," he said. "We're here today about the future, about promises made and kept by the Boeing Company."
Reporting by Alwyn Scott; Editing by Chris Reese