Boeing made history a few weeks ago when it rolled out the first commercial airliner built outside of its manufacturing base in the Puget Sound region of Washington state: a 787 Dreamliner produced at its new final assembly plant in North Charleston, South Carolina. For the U.S. airframer, it was a breakthrough after a changed approach to manufacturing that has been far from straightforward and uncontentious.

Some 7,000 employees and visitors, many wearing Boeing-blue T-shirts, gathered under a brilliant sun in front of the massive final assembly building April 27 as a procession of speakers including South Carolina Governor Nikki Haley, U.S. Senator Lindsey Graham and Boeing Commercial Airplanes CEO Jim Albaugh framed the moment. Dreamliner No. 46 emerged from the hangar in a cloud of manufactured smoke, the words “Made with pride in South Carolina” and the state symbol of a Palmetto tree and crescent stenciled near its nose. Weeks later, on May 23, employees assembled in the building to watch a live broadcast as the 787 took off from Charleston International Airport on its maiden flight.

But history is seldom tidy. Boeing erected the final assembly facility only after purchasing in stages the troubled Global Aeronautica joint venture of Vought Aircraft and Alenia Aeronautica. This group had been responsible for integrating 787 center fuselage sections at the site adjacent to Charleston airport, then shipping them to Everett, Washington, for the aircraft’s final assembly. Boeing announced its selection of the North Charleston site for a new 787 final assembly line in October 2009 and broke ground that November.

The decision to open a second Dreamliner assembly line in South Carolina, a “right-to-work” state that allows individuals to decide whether or not to join a union, was threatened by a National Labor Relations Board (NLRB) complaint alleging that it amounted to retaliation against Boeing’s unionized work force in Washington state. The NLRB dropped its unfair labor practices case in December after Boeing and the International Association of Machinists and Aerospace Workers agreed on a new four-year contract that includes a Boeing commitment to build the reengined 737 MAX in Renton, Washington.

Today the North Charleston complex covers 2.5 million square feet, about half of that space devoted to final assembly and delivery activities, and employs 6,000 people working two shifts five days a week. Thin-film solar laminate panels on the assembly building roof generate the equivalent of 20 percent of the electricity used by the plant. The site has “zero waste to landfill” status, with all waste converted to biomass or recycled.

During a plant tour coinciding with the first 787 rollout, Jack Jones, Boeing South Carolina general manager, was asked to compare the manufacturer’s union and non-union work forces. “I worked in a union shop [in Washington state] for 32 years,” he said. “There’re some great, great [workers] up there. It’s just all about leadership and how leadership interacts with their people. Up in Seattle, the leadership deals with the union leaders; that’s how you negotiate with employees. Here, we are developing a culture of trust and respect and that’s where it’s different. I think people see it and believe it, and we have a great relationship with our people.”

Super-sized Building

The 642,720-square-foot assembly facility in North Charleson, Boeing’s largest single-span building without central supporting columns, was completed in June 2011, joining existing buildings involved in 787 aft- and mid-body fabrication, integration and assembly. The rear and central fuselage sections are advanced to final assembly on site or ferried by the modified 747 Dreamlifter cargo plane to Everett for final assembly. Boeing executives say the complex covers the production cycle from “freezer to flight,” a reference to carbon fiber tape that is infused with resin and kept in cold storage, then wound into fuselage sections and cured.

The mid-body building is where Dreamliner fuselage barrels manufactured by Alenia Aeronautica in Italy (sections 44 and 46); the forward fuselage from Kawasaki Heavy Industries in Japan (section 43) and center wheelwell and center wing tank (section 11/45) from Japan’s Fuji Heavy Industries are joined and stuffed with wiring. The fuselage subassembly facility under Global Aeronautica was the “main problem” behind 787 production delays, but is no longer an issue, said Will Geary, Boeing mid-body director of operations. “Traveled work” items, or unfinished subcontractor tasks left to be completed at final assembly, have been reduced to “less than five” of 4,000 total tasks in the mid-body section.

“Suppliers are meeting my expectations, both on schedule and on the completeness of their work,” Geary said during the plant tour. “My number-one goal is to achieve rate,” he added. “Everything else will follow on.”

According to Jones, “It’s not unusual to get travelers–work that doesn’t get completed inside your factory. A couple of hundred travelers is not unusual on typical programs. This airplane, the very first one ever built here, is going to roll out with 100 or less travelers. Trust me, I’ve rolled out a lot of airplanes and it’s not always that clean coming out.”

Airplane number 46, powered by General Electric GEnx-1B engines, was scheduled for delivery to Air India by the end of the second quarter, after being painted by subcontractor Leading Edge Aviation Services in Amarillo, Texas. In fact, all four of the 787s assembled in South Carolina this year were destined for the Indian state-owned carrier. But even with the first aircraft flying, a complication arose. Air India said in late May that it would refuse delivery of 27 planned Dreamliners from Boeing until the two parties agreed on compensation for a three-year delay.

The 787 production rate in South Carolina this year is described as “transitional.” Jones said Boeing plans to ramp up to final assembly of 3.5 aircraft per month by late 2013 or early 2014. The balance of seven or more Dreamliners per month will come from Everett.

“Every time you go up an increment in rate, it’s very important that you stabilize before you go up to the next one,” Jones said. “You have to get all your processes settled. You have to get your supply chain synched to the time you need to build your aircraft. That takes about six months on average before you want to take it up another increment. It’s all about stability.”