January 16, 2014 in City

State pitches Spokane as site for Boeing 777X work

By The Spokesman-Review
 
Tax incentives from the state

A special legislative session last November extended current tax breaks Boeing received for locating a 787 factory in the state through 2040, if the 777X is built inside its borders. They’re worth an estimated $8.7 billion.

OLYMPIA – State to Boeing: How about building your new plane in Spokane?

Low labor costs and short commute times mean the aerospace giant should consider building its newest jetliner on the West Plains, if it decides against a Puget Sound location, the state said in its official pitch for the 777X.

The formal site proposal that Washington submitted in the multistate competition to land the assembly line and other facilities needed for the new plane lists the industrial park near Spokane International Airport as a possible alternative to Everett. The Puget Sound community where the current Boeing 777 is built is the state’s “Scenario 1,” with Spokane as a backup.

“The Spokane region can provide an affordable alternative to other areas, due to its 18 percent lower business cost than the national average, one of the best commute times in the nation and the sixth lowest natural disaster rate,” said the proposal, which was obtained by the Associated Press under a public records request.

Spokane has the largest number of aerospace companies in the state outside the Puget Sound region, the proposal said. In addition, it has a skilled manufacturing work force and the ability to train more people with local schools and colleges, on-the-job training, apprenticeships and “customized technical training,” it said.

The Boeing plant in Everett is the state’s first choice for a place to assemble the new plane and build a new-carbon fiber wing that the design requires. Undeveloped land at Paine Field, which is near the Boeing plant, is a possible alternative for a site to build the wing.

The site on Spokane’s West Plains is “a low-cost alternative” for the assembly and wing factory.

The proposal touts Washington’s long relationship with Boeing and the aerospace industry and the many tax breaks the state offers the company to build the new plane. A special legislative session last November extended current tax breaks Boeing received for locating a 787 factory in the state through 2040, if the 777X is built inside its borders. They’re worth an estimated $8.7 billion.

After the Legislature approved those tax breaks, however, the initial contract extension Boeing was demanding from its machinists’ union failed. The company began soliciting formal bids for the 777X from other states as well as Washington.

Earlier this month, the machinists agreed to a revised version of the contract extension, leading Boeing to say it will build the plane in the state, but a site has not yet been announced.

Washington has low-cost energy, no income tax, extensive aerospace programs at its universities, and with some 1,350 aerospace companies, an established supply chain for parts the company needs, the state Commerce Department said in the 164-page pitch for the factories.

It is updating water-quality standards required by federal law that involve fish consumption rates, which could affect a major industrial project, the proposal adds. “The governor has committed that the state will not adopt regulations that fail to meet the dual objectives of increased human health protection and a thriving economic climate for existing and new business,” said the report, which carries Gov. Jay Inslee’s message and signature on its first page.

Boeing opened a factory on the West Plains in 1990 to make floor panels and air ducts for its planes, but sold that facility to Triumph Group in 2003. The plant still supplies parts for Boeing jetliners.

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