An updated analysis on the state of Washington’s aerospace industry has landed. Conclusion: still too much baggage.
The Snohomish County Economic Development Council commissioned the study by Deloitte Consulting, which found that the state has more disadvantages than advantages in the competition for aerospace jobs.
“Washington has not been a player in recent site selection decisions by aerospace companies,” the study concluded.
The players the state was compared to are Kansas, North Carolina, South Carolina and Texas. For example, North Carolina lured Spirit Aerosystems, which will build part of the Airbus A350.
Deloitte also did the 2003 analysis that resulted in more than $3 billion in tax breaks to help the state attract initial 787 assembly work. But competitors have moved more aggressively since then, and the second line of 787 work could be up for grabs.
Reacting to the new study, Gov. Chris Gregoire announced creation of a new Aerospace Council that will focus on skills training and research and development. The Deloitte study goes beyond that, identifying high business costs, such as labor, workers’ compensation and unemployment insurance. The latter two are among the highest in the nation and under the purview of government. Labor costs are frustrating, because there isn’t much government can do. If labor and management at Boeing can’t find a way to avoid the routine strikes, the state’s aerospace industry may go the way of Michigan’s auto industry.
Last fall’s eight-week strike by the Machinists union cost Boeing an estimated $6.5 billion in revenues. At the time, Mark Blondin, a union official, rejected the idea that the strike would imperil future business, telling the Seattle Times: “Our leverage is the skills and abilities of this work force.”
The Deloitte report notes that advantage, but competitor states are working to close the gap. Gregoire says “spies” have come to the state to figure out its skills-development regimen. Once they do, the state will have lost its chief attraction for the aerospace industry, and those machinists will lose their jobs.
This is not just a West Side issue. The recently formed Inland Northwest Aerospace Consortium has about 40 members, including Kaiser Aluminum, Triumph Composite Systems Inc. and Goodrich Corp. Recently, Cascade Aerospace, an aircraft maintenance company, set up shop at Spokane International Airport. Associated Painters is looking to relocate from Everett to the airport. All of these businesses would take a hit if Boeing were to move its business to other states.
We cannot take our current position for granted. Boeing already moved its headquarters to Chicago. If we’re not actively improving the business climate, most of the remaining jobs will take flight, too.