December 11, 2013 in Business

With Boeing bid, California hopes to revive aviation industry

Gillian Flaccus Associated Press
 

LONG BEACH, Calif. – California is one of at least a half-dozen states vying for Boeing’s attention as the aircraft giant selects a production site for its new 400-seat 777X jetliner.

A deal to bring the facility to California could create thousands of jobs and resuscitate the once-vibrant Southern California aerospace industry.

Boeing Co. solicited bids from a number of states in November, and bidders have until mid-December to act, company spokesman Doug Alder Jr. said Tuesday. California planned to submit its proposal to Boeing on Tuesday.

Boeing began receiving replies this week and will begin reviews in several days, he said. Officials in Alabama, California, Missouri, South Carolina, Texas and Utah are among those who have spoken publicly about wooing Boeing with economic incentive packages worth millions of dollars.

“Based on our skilled workforce, existing manufacturing base and targeted business incentives, California is in a strong position to compete,” Mike Rossi, Gov. Jerry Brown’s senior adviser for jobs and business development, said in a statement.

California officials have been tight-lipped about what they are offering, but the stakes are high.

Boeing announced in September that it would cease production of its C-17 Globemaster III military cargo jet in 2015 and shutter its Long Beach production facility, which provides about 2,000 jobs and has been a backbone of the regional economy.

Richard Aboulafia, an aerospace analyst with Fairfax, Va.-based Teal Group, said California might have an uphill battle sealing a deal to build the 777X, despite the benefits available in Long Beach.

Boeing might instead prefer to sell its property there and profit from high real estate prices, he said.

“You have expensive real estate, tight labor supply, union issues, environmental regulations and geographic constraints. No one’s really thinking, ‘Oh, it’s perfect for large, heavy-scale manufacturing,’ ” Aboulafia said. “It doesn’t quite add up.”

Still, the office of Gov. Jerry Brown has worked closely with Long Beach officials to put together a strong incentive package, said Vice Mayor Robert Garcia, who declined to provide details.

The city is near a deep-water Pacific port, rail lines and an airport, he said, and already has a trained aerospace workforce.

“I think a big portion of our future in aerospace is going to be dependent on if we’re selected for this site,” Garcia said. “There are thousands of people who rely on these good jobs, with good wages and good benefits and they built a lot of (the) middle class in Long Beach and in the region.”

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