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November 16, 2011 in News, City
Efforts launched to keep Boeing in Washington
Spokane hoping to lure some of the work to Eastern Washington
RENTON, Wash. — The competition to build Boeing’s next airplane and keep nearly 80,000 jobs in the state is Washington’s contest to lose, Gov. Chris Gregoire and her economic advisers said Wednesday.
An outside study found Washington has an advantage over other states competing to assemble the 737 MAX, because existing workers and assembly lines can be put to work on the new plane. But other factors — those outside the reach of government such as labor contracts — could lead Boeing toward a different choice.
Boeing announced in August it would put new engines on the 737 to improve fuel efficiency and compete with the Airbus A320neo. Boeing is expected to announce next year where the MAX will be assembled.
Gregoire said assembling the 737 is likely to be the largest manufacturing contract in the world for at least a decade and Washington must win that contract and keep and grow aerospace jobs in Washington state.
Spokane-area leaders are trying to lure at least a portion of the potential manufacturing base to Eastern Washington, and are contemplating zoning changes on the West Plains in an effort to make that area more attractive to airline manufacturing.
The report from management consulting firm Accenture on Washington’s aerospace competitiveness found the state would beat Texas and Kansas to build the new 737, but that Washington was not significantly ahead in the race.
Washington wins because of its experienced workers. But the state’s higher pay and possible work stoppages because of labor disputes work against it, according to the study.
Texas offers financial enticements for aerospace companies, produces more engineers than Washington and is training workers for aerospace jobs, beginning in high school.
Kansas also has an experienced aerospace workforce but low unemployment could be a problem for Boeing, the report said. Kansas, Texas and Washington all received similar marks in a comparison chart, which also rated the competitiveness of Alabama, California, Florida, New Mexico, North Caroline and South Carolina.
The cost of building new facilities in other states gives Washington a big advantage, said Craig Gottlieb, senior manager at Accenture. But if Boeing decides it needs to build a new facility to assemble the 737 MAX, then Washington loses some of its competitive advantage.
“It’s our job to make sure we are taking nothing for granted,” Gregoire said, in proposing nearly $10 million in new state spending to put Washington in the best position for keeping the 737 in this state.
The proposals made at a news conference at Renton Technical College are based on what she learned from the Accenture report, which was paid for by Washington businesses that want to keep Boeing building airplanes in Washington.
- $7.6 million for the University of Washington and Washington State University to enroll 775 more engineering students.
- $1.5 million toward aerospace research at the UW and WSU.
- $450,000 to provide 12 high schools with aerospace curriculum support.
- $250,000 to add courses at 10 high schools for problem-solving using science, technology, engineering and math skills.
Gregoire said some of the money would come from a reserve fund and the rest she would request from the Legislature. State Rep. Marcie Maxwell, D-Renton, said she though lawmakers were ready to spend money to keep good jobs in the state.
“We’re going to work hard to get this done,” she said after the news conference.
Gregoire said Washington has already been investing in training Boeing’s future workers, with 22 of the state’s community and technical colleges already working with Boeing. Walla Walla Community College recently dropped its carpentry program to make room for aerospace training, she said.
Her announcement was made in a classroom where future Boeing line workers are being trained.
Matthew Anderson, who is studying aerospace mechanics at Renton Tech, said he’s looking forward to taking his new skills to a job at Boeing and saying goodbye to his restaurant job.
“I’ve grown to love this,” said Anderson, 21, who graduated from Seattle’s Roosevelt High School and originally wanted to study art.
Boeing has more than 80,000 workers in Washington, mostly at the 737 factory in Renton and the wide-body plant in Everett where the 747, 767, 777 and 787 are assembled. The governor said another 30,000 people work in Washington at companies that support Boeing and build airplane parts.
The state no longer has the hold on Boeing it once had. Boeing moved its headquarters in 2001 to Chicago and in 2009 the company decided to build another 787 assembly plant in South Carolina.
Accenture’s Gottlieb said the equation for deciding where to build the 737 MAX is different from the 787 because the 737 is based on old technology and the 787 is a completely new plane using brand-new technology.
“It would make sense to keep it here,” he said.
© Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Jethro_toll on November 16 at 1:49 p.m.
Most of Boeing production is in China anyway. Are they going to move them to Washington state?
IHike4Fun on November 16 at 3:08 p.m.
I thought they had moved a lot of stuff to South Carolina.
The labor contracts and the tax structure in Washington are killing the business here. They have already moved corporate headquarters out of Washington State. I think it is almost inevitable they will shut down assembly here. If I had a house in the Seattle area I’d really want to sell it before that happens.
westerly on November 16 at 3:35 p.m.
Boeing’s Seattle union workers are the highest paid….watch out….companies like to move production to less ‘unionized’ states…fact of business.
johnclarke on November 16 at 4:01 p.m.
Boeing’s Seattle union workers are the highest paid….
Compared to what ?
http://blog.seattlepi.com/aerospace/2008/08/26/updated-boeing-makes-new-offer-to-machinists/
The average machinist makes $56k per year. Yeah, those terrible over paid union machinists are just killing Boeing.
In 2010 the CEO made $19.7 million. 2010 profit $3.3 biliion, and it was a horrible year.
Here we have what is wrong with the so called “job creators”. They want all sorts of concessions from the state, and scream about paying a living wage to highly skilled machinists. Then, they hold a gun to your head and say they are going to move an assembly plant to a place where people will will take that same job for half the wage. Boeing, you suck.
selkirks on November 16 at 4:38 p.m.
@IHike4Fun:
Actually, Washington State is consistently ranked by magazines like Forbes and newspapers like the Wall Street Journal as one of the best states in the country for doing business.
So your assumption that “labor contracts and tax structures” in Washington are “killing business” is flatly incorrect. I’m sorry.
jddavis on November 16 at 5:07 p.m.
Selkirks—Why did Boeing move its corporate headquarters from Seattle to Chicago a few years back?
johnclarke on November 16 at 5:28 p.m.
jddavis - because of the unions picketing the headquarters building next to Boeing Field, and also the current CEO at the time liked Chicago. I gather it was considered a bit higher on the social ladder. They literally moved one building. So, really it had nothing nada zip to do with what state is better to do business in.
hunternomore on November 16 at 8:16 p.m.
And then there’s the OTHER side of Boeing—you know, the dark side.
DickAdams on November 16 at 9:26 p.m.
If Boeing leaves the State if Washington and decides to move to another state, you can thank Gregoire. Actually when Boeing moved the exec offices to Chicago, Gregoire was partly responsible for that move. Gregoire it seems, can not stop her reckless spending habits no matter what the economy looks like.
Jethro_toll on November 16 at 9:41 p.m.
Gregoire should concentrate on moving herself OUT of Washington.
CougarGold on November 16 at 10:45 p.m.
jddavis -
“Why did Boeing move its corporate headquarters from Seattle to Chicago a few years back?”
Partly because their biggest customer at the time, UAL, is headquartered there. The bigger question is why did they choose S. Carolina to build the 787. Here’s a hint; they didn’t want to deal with labor strife (or is that the answer?).
johnclarke on November 17 at 4:23 p.m.
DickAdams on November 16 at 9:26 p.m.
If Boeing leaves the State if Washington and decides to move to another state, you can thank Gregoire. Actually when Boeing moved the exec offices to Chicago, Gregoire was partly responsible for that move. Gregoire it seems, can not stop her reckless spending habits no matter what the economy looks like.
Baseless attack. What the heck, Dick. You could look out the window at snow and blame it on “reckless spending”. Give it rest pal. That is not why Boeing moved their headquarters.
johnclarke on November 17 at 4:28 p.m.
If only there were some electronic means of gathering information.
http://siteselection.com/ssinsider/incentive/ti0106.htm
http://www.spaceandtech.com/digest/sd2001-19/sd2001-19-001.shtml
http://hbr.org/2001/10/inside-boeings-big-move/ar/1
“About a year ago, Phil Condit, our chairman and CEO, started conversations with his strategy council and other executive leaders about Boeing’s long-term strategic growth plans. In the course of those conversations, it became apparent that our headquarters needed to be in a neutral location, one not directly associated with one of the major units of the company.”
Translation ? Union.
jddavis on November 17 at 9:43 p.m.
Cougar and JC—wrong, and wrong.
CougarGold on November 19 at 1:02 a.m.
jddavis - Please explain. I was always of the understanding they wanted to be close to their (then) biggest customer. You have a different take?
jddavis on November 20 at 3:37 p.m.
Cougar—here is a good article from way back. I believe it explains it pretty well.
http://www.spaceandtech.com/digest/sd2001-19/sd2001-19-001.shtml
CougarGold on November 21 at 9:31 p.m.
jd - This is what I remembered about the move:
From the article:
” Chicago is home to a major Boeing customer, UAL Corp.’s United Airlines, though that was not a factor in the company’s selection decision.”
While I understood the essence of the move regarding being away from any of their major production facilities, I think choosing Chicago over Denver or Dallas may have been somewhat influenced by UAL’s presence. I just recall that was my impression at the time. It could be very well true that it wasn’t considered but I would have to believe there were some folks in the selection process that it resonated with.