Boeing recently announced that they had chosen South Carolina as the location for a second production line for their 787 Dreamliner long-haul jet.  The Company current has a fuselage assembly and installation operation in South Carolina and this latest move will be a dramatic expansion of those capabilities.  According to Jim Albaugh, president and chief executive of Boeing Commercial Airplanes:

“This decision allows us to continue building on the synergies we have established in South Carolina with Boeing Charleston and Global Aeronautica”

Union officials in Everett Washington, the home of the current production line, were less than enthusiastic.  Union leader Tom Wroblewski said Boeing has:

“has betrayed our loyalty once again, walking away from our discussions.”

I guess you can’t please all of the people all of the time.  The Boeing announcement comes on the heals of the announcement by South Carolina that shipping giant Maersk has agreed to continue operations at the Port of Charleston (after announcing they would be leaving).  All in all, it’s been a great month for South Carolina economic development news.

Maersk Line announced yesterday that they continue operations in Charleston, South Carolina through 2014.  This is a reversal of a previous decision by the line to leave the east coast port.  This is obviously great news for Charleston and demonstrates their commitment to serving their shipping line clients in the best possible manner.

I was stuck by this question last month as I watched the Tour de France bicycle race.  Of course, I was cheering for Lance, hoping for a big comeback.  But, I also wanted to cheer for the “American” team.  It dawned on me that there was no truly American team.  Team Garmin Slipstream had the American sponsor, but most of its riders we foreign.  Team Astana had a Spanish sponsor, but a fair number of American riders.  Even Lance lives a fair amount of the year outside of the US.  In the end, I had to settle for nearly-American teams, but it got me thinking…

Today I read another article about a “Buy America” clause being added to a House spending bill that precluded any of the $33b of appropriated funds from being used to purchase cars other than those made by GM, Ford or Chrysler.  Yes, those three are American registered companies.  However, Mercedes, Toyota and many other have plants located in the US that employ thousand of Americans.  A portion of a dollar spent on a Toyota will work its way back to the American workforce.  BMW does a great job of keeping the South Carolina economy humming with their Greenville plant.  Conversely, many of the Ford vehicles are assembled in Mexico or Canada and employ their nationals.

So, what is the tipping point where a company becomes American?  For cars, I’d assume the profit margin to be in the 6-10% range.  That means that 90-94% goes to someone other than the manufacturer.  I know the dealers take 10-20% of the sales price, and we’ll assume they are “American” whether the car is a Honda, Ford or Fiat.  The remaining percentages goes to the raw goods and labor to assemble the car.  In some cases, that’s Americans and it some cases it’s not.  Conceivably, you could buy an American car and have 70% of the money go outside the US.

In this global, flat economy trade-restrictive “Buy American” clauses don’t make much sense.  They do, however, make politicians feel proud enough to wear their American flag lapel pins… (which was most likely made in China).

The Port of Charleston announced a new breakbulk/container service that will provide connectivity to several ports in the Middle East and India.  The “North America” service of the National Shipping Company of Saudi Arabia (NSCSA) will have a rotation that includes the ports of Jeddah, Jubail and Dammam in Saudi Arabia; Jebel Ali, United Arab Emirates; Mumbai, India; Port Qasim, Pakistan and Livorno, Italy.  

No indication was given as to the anticipated volume of the new service.  However, any win in this economy is a great win.  Keep up the good work Charleston!