November 30, 2011 in Business, News

Boeing will keep 737 MAX production in Renton

Spokane groups see big opportunities for related production, supply work in this area
By The Spokesman-Review
 
AP/Stephen Brashear photo

In this Aug. 30, 2011 photo, a model of the newly revealed 737-MAX passenger airplane, which feature redesigned CFM International LEAP-1B engines, is photographed in Renton, Wash.
(Full-size photo)

Ending months of speculation, Boeing on Wednesday announced it will base future production of the already in-demand new 737 MAX aircraft in Renton.

State and area officials have worked for months on helping convince the company to keep future production of the new airplane in Renton, where Boeing makes the current generation of the aging but still popular 737 passenger jet.

So far Boeing has lined up roughly 700 commitments for the more fuel-efficient 737 MAX from several airlines.

Boeing has reviewed potential sites for 737 MAX production since the company announced in August that it will build a new-engine variant of the market-leading 737.

Spokane officials say they are delighted with Wednesday’s announcement and intend to get a piece of the action, including possibly landing a second production line for the new jet, expected to go into service in 2017.

Boeing announced on Wednesday a deal between the company and the Machinists Union was struck to ensure the aircraft is built in Renton.

Renton was considered the top contender for the manufacturing work, which also was being sought by several other cities and states. Spokane never presented itself as a candidate for the main facility, but officials here said the area has advantages that could streamline 737 MAX production.

Citing the area’s available land, workforce skills and infrastructure as assets to help Boeing meet its 737 demand, several Spokane groups, including the Community Colleges of Spokane, the City of Spokane, Spokane County, Greater Spokane Inc. and Spokane International Airport, plan to submit a proposal to Boeing next year, said Larry Krauter, the airport executive director.

He met with area leaders to discuss a statewide aerospace competitiveness study at a meeting Wednesday at the GSI offices in downtown Spokane.

That proposal has two targets, he said: to recruit Boeing to add a secondary production site in Spokane if it needs more capacity than Renton provides; and to recruit one or more suppliers of equipment and components for the 737 MAX.

If nothing else, Boeing might consider using a Spokane site as a secondary drop-off site for component assembly before the aircraft are hauled to Renton for final assembly, said Krauter.

The Machinists agreement, which must be ratified by the union, includes a contract extension for machinists, according to Boeing. An Associated Press story reports that the Machinists likely agreed to call off a labor contract dispute with Boeing in exchange for the company’s commitment to future production in Washington state.

Washington Gov. Chris Gregoire is asking the state legislature for more money for education, workforce and transportation projects in order to keep the state at the forefront of aerospace skills and production.

The aerospace industry provides at least 89,000 direct jobs in Washington, with many production salaries ranging from $81,000 to $91,000 per year.

Greater Spokane Inc. President Rich Hadley said it made obvious sense for the Spokane coalition to emphasize the advantages this area provides. He met with other city and area leaders Wednesday to underline Spokane’s plans to use aerospace as a key way to land new jobs.

Even if all production remains on the West side, Hadley said those Spokane firms doing work tied to supplies and parts for Boeing will benefit from the announcement. “That’s good news for those companies,” Hadley said.

A recent study prepared by Accenture looking at the state’s aviation industry noted that Renton and Spokane were the two state locations best positioned to help Boeing and other aerospace companies expand. Other areas in the state were also noted in the Accenture study, which was funded by Washington Aerospace Partnership, a statewide advocacy group.

Krauter said Spokane’s airport has extensive land and untapped transportation resources for expanded aerospace production. He said two current land sites, on the west and south ends of the airport, have been designated as key locations for possible company expansion.


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