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Eye On Olympia

Posts tagged: Boeing

Boeing’s latest move: Is that a bead of sweat on the brows of state officials?

Much talk — particularly from Republicans — today about Boeing’s decision to spend $580 million to buy a South Carolina plant that makes parts for the delayed new 787 aircraft.

First out of the gate, at 5:45 a.m. this morning, was the governor’s office, releasing this statement by Gov. Chris Gregoire:

“Yesterday, I spoke with Scott Carson, who informed me of Boeing’s decision to purchase the Vought facility in South Carolina. I recognize that this announcement underscores that Boeing wants to ensure that it manufactures the 787 Dreamliner as efficiently as possible, thus they have made the decision to buy Vought. In my conversation with Scott, he assured that no decision has been made on a potential second line for the 787, and that today’s announcement doesn’t have anything to do with that. Washington state is proud to be home of the world’s best airplane manufacturer and most skilled aerospace workforce.”

State officials are clearly nervous at the prospect of Boeing launching a full-on jet assembly line anywhere outside Washington state. Those same jitters are what prompted then-Gov. Gary Locke to champion a $3 billion package of tax incentives for the company in 2004.

Republicans and business leaders seized on the move as evidence that Washington’s not doing all it can to keep the massive employer (and taxpayer) expanding here. Most pointed to strikes by Boeing workers as a big part of the problem.

“Work stoppages over the past several years have cost Boeing $9 billion in revenue and $2 billion in lost profits — and Washington had the most aerospace work stoppage days of any state in which the company does business,” said state Sen. Mike Hewitt, R-Walla Walla.

Hewitt cited a recent aerospace competitiveness report that listed top concerns as labor-management relations and costs like unemployment insurance, workers’ compensation and taxes. He blasted Democrats for “a myriad of business-busting bills” in Olympia. And he said that Boeing and other aerospace jobs are 15 percent of the state’s economy.

Business leaders issued their own, similar statements. A sampling:

“Unless things change, Boeing’s future will be outside the Northwest and that will be devastating to the Washington economy…Airlines simply can’t make billion-dollar decisions on new aircraft and then face the prospect of delivery delays because of labor disputes…If Seattle wants to keep Boeing, they better stand up and show it, because there are dozens of other states that will welcome the jobs and the economic activity.”
-John Stanton, chairman of the Washington Roundtable

“Boeing and aerospace are as important to the vitality of this region as the Mariners and the Seahawks. They need to know how much they are valued.”
-Phil Bussey, Greater Seattle Chamber of Commerce president

“This is our wake-up call.”
-Don Brunell, Association of Washington Business president


Boeing to shed 4,500 jobs

Boeing says that it’s Commercial Airplanes workforce will shrink by about 4,500 jobs in 2009 “as part of an effort to ensure competitiveness and control costs in the face of a weakening global economy.”

The cuts, according to the company, will bring employment at its Commercial Airplanes division to about 63,500, or about the same as it was at the start of last year. The division added 5,000 jobs in 2008.

From the company’s press release:

“We are taking prudent actions to make sure Boeing remains well positioned in today’s difficult economic environment,” said Scott Carson, president and CEO of Boeing Commercial Airplanes.

“We have made significant strides in recent years to achieve greater efficiency and productivity, but we still face challenges that we must address,” Carson said. “We regret the disruption to those affected by this decision, but we believe that acting now will allow us to be in a financial position to adapt to market uncertainties, meet our customer commitments, continue investing in our current and future product lines, and protect our competitiveness in a fiercely competitive business environment.”

The company says that attrition and reduced use of contract labor will account for some of the lost jobs, but that “layoffs of Beoing employees also are necessary.”

Many of the job reductions will be in overhead functions and other areas not directly associated with airplane production. This will enable Boeing to continue focusing on successfully executing new airplane development programs, delivering airplanes to customers, continuously improving productivity and quality, and supporting customer airplanes in the fleet.

Most of the reductions are expected to occur in Washington state in the second quarter of the year. Affected employees will receive 60-day notices beginning in late February. 

In Olympia, Gov. Chris Gregoire called the move “sad and disappointing, and yet more evidence of the deepening national recession.”

She said she’d talked with Boeing CEO Scott Carson. I have been in touch with Scott Carson, Boeing’s chief executive and president of Boeing Commercial Airplanes.

“While I understand this was a business decision, I feel for those workers and their families,” she said. She pledged rapid help with unemployment claims and job-seeking from the state’s Employment Security Department for laid-off workers.
 
As Gregoire pointed out, Boeing’s move follows record-high unemployment claims filed last month in Washington. She said she’s working with Congress and President-elect Obama on a federal stimulus plan. Gregoire also says she’ll soon announce a state stimulus plan “to fund ready-to-go projects.”

In Washington, D.C., U.S. Sen. Patty Murray calle the news another reminder that the recession’s hitting Washington.

“Boeing is part of the lifeblood of our region and when Boeing hurts, Washington state hurts,” she said. She echoed Gov. Gregoire’s comments about working with the new administration.
 


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Richard Roesler covers Washington state news from The Spokesman-Review's bureau in Olympia.

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