Boeing said on Wednesday it would build an assembly line for its 787 Dreamliner in South Carolina, outside its historic civil aircraft manufacturing base of Seattle, after talks with unions in Washington state broke down.

The announcement is a serious blow to Washington state, where Boeing employs more than 200,000 people and generates about $36bn annually. In recent days, politicians had shuttled back and forth between the aircraft-maker and leaders of the machinists’ union in an attempt to forge an agreement that would persuade the company to locate its second 787 line in the region.