Boeing is going, so time to woo new plane makers

April 24, 2013 | John Burbank

john burbank

John Burbank, EOI Executive Director

What rhymes with going, going, gone? How about Boeing, Boeing, bawn? That doesn’t make sense in English, but it sure hits the nail on the head with the once loyal, Washington-state born, bred and based Boeing Company.

Every sign points toward Boeing’s departure from our state. I never thought I would see this day. When I first visited Seattle for the World’s Fair in 1962, Boeing was the gem in the emerald crown, putting out 707’s for all the airlines in the world. I watched on TV back home in Connecticut when the massively spectacular Boeing 747 was rolled out of the Everett assembly building. Returning to Washington in 1973, I drove past Boeing Field and knew that Seattle (and Everett and Renton) would never go the way of Detroit and its cars. Boeing just had too much invested in plant, equipment, experience, skilled machinists and engineers, to pull out of town. It was embedded into our economy, our politics, and our culture. It made us proud. It was a great corporate citizen.

I didn’t foresee that day in 1997 with Boeing merged with McDonnell Douglas and McDonnell top brass started to call the shots. Or Boeing farming out production to off-shore sites. Or Boeing moving its headquarters to Chicago. Or Boeing making its home state of Washington bend over backwards in a bidding war to build the 787.

We did, with a $3.2 billion tax incentive package to build the 787 in our state. It didn’t actually work out that way. Boeing took the money, and proceeded to outsource most of the aircraft to sites around the world. Then those parts were brought back to Everett, where they were put together. But someone forgot about how to insure quality control when dealing with dozens of different vendors for different parts. That little problem with the batteries catching fire?

Just this week Boeing Commercial Airplanes CEO Ray Conner announced that the redesigned battery has “made a great airplane even better.” So Boeing engineers and machinists in Everett saved the 787, reconfiguring and remaking parts to put the 787 together again. What do these workers, and the taxpayers of our state get for their generosity and forbearance with Boeing? A Boeing investment in South Carolina for a duplicate 787 production line. Next up? Boeing is laying off 1,500 engineers and 800 Machinists in the Puget Sound area, while creating 2,000 new jobs in South Carolina and outsourcing engineering work to its design center in Moscow — that’s Russia, not Idaho…

We need to figure out how to keep our highly trained and educated machinists and engineers working in Washington. Right now our state has the deepest concentration of aerospace intelligence anywhere in the world. We have the facilities, the runways, the production capacity to build airplanes. So rather than the state being a promoter for Boeing, we have to be a promoter for aircraft manufacturing.

When Boeing demands tax concessions to build the 777X here, we should bargain. Yes, we will give these concessions, but let’s make sure we are a better steward of these lost tax dollars. Let’s write into the law requirements for the number of local jobs created and the wages paid as a result of these giveaways. And if those jobs aren’t created, let’s claw back our tax dollars to fund public education.

There are other aerospace companies out there — Bombardier and Comac, for starters. They want to manufacture in the U.S., because we have a huge market in flying. We don’t have to engage in a race to the bottom with other states to get aerospace business here. We have a high road for production that will attract manufacturers through a highly skilled organized workforce, with high production standards and incredible shared expertise. When you are building something as complex as an airplane, which can’t stop working in the middle of a flight, that is what you want. High road production insures profitability, a skilled, well-paid, and motivated workforce, and a good quality of life shared among all of us.

When Boeing abandons our state in search of anti-union and low-wage states and countries, we don’t have to become the next Detroit, with empty manufacturing facilities and abandoned runways. We can break the Boeing monopoly and build a 21st economy. Just because one big bird is leaving the nest, doesn’t mean we can’t make it a place for other manufacturers to roost!

From the Everett Herald

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Posted in Column, State Economy

Comments

  1. Chuck Lare says:

    Thanks John. To your point, “We have a high road for production that will attract manufacturers through a highly skilled organized workforce, with high production standards and incredible shared expertise.”

    Wallingford’s Avtech where I did some consulting (I originally started my career at Boeing designing for the Space Shuttle) built equipment for Boeing and many other organizations including Brazilian aircraft.

    Recently I have been advocating for the Aerospace cluster to be expanded to include all transportation through a NW Transporation Cluster Initiative (ref.http://www.wallingfordsolarinitiative.org/projects/electric-trolley-bus-jobs-initiative). This initiative could leverage: PACCAR who built electric trolley buses in the 1940’s; the City of Seattle’s recent award to the Seattle company Pacifica Marine to build the new First Hill Streetcar using 751 Machinists; and King County being on the verge of awarding a $150 to $200M (primarily Federal money) contract to replace the current aging fleet of Electric Trolley Buses (ETB)

    Include public transportation in the manufacturing mix and you gain what businesses thrive with – market certainty.

  2. Winslow P. Kelpfroth says:

    John: I had just finished listening to this podcast when I read your piece on Boeing. Prof Glaeser is an economist at Harvard and worth listening to

    WP Kelpfroth

    Check out episode Glaeser on Cities of podcast EconTalk.

    Click to play: http://files.libertyfund.org/econtalk/y2013/Glaesercities.mp3

  3. Penny Pfiester says:

    Thank you, John, for your thoughtful, common sense article on the misguided and bad corporate decisions made by Boeing! Sadly a company that was founded here, built quality here, and has been the pride of Seattle area for so many years, has abanded those values in favor of corporate greed! The 787 battery failure is an excellent example! Their labor relations with unions speaks for itself…and the CEOs and managers haven’t figured out the problem, by looking in the mirror!

  4. N Velluzzi says:

    I agree that clawbacks on economic development incentives ought to be part of the deal. However part of the problem is the decentralized nature of those policies and the overall weak nature of that policy structure nationally that results in states being played off one another and playing against one another. It’s sorta a national version of ‘race to the bottom.’ I, and other scholars of economic development, are quite critical of the actual benefit of incentive-based growth strategies. In a knowledge- and learning-intensive industry as aerospace, the optimal location strategy is not likely determined by wages and the historical political geography of the region, rather the ability of the workforce to learn and adapt to changing technology in ways that result in competitive or absolute advantage for the firm, industry, and region.Stan Sorscer (sic) nailed it in his Seattle Times or maybe PI op-ed several years ago that criticized Boeing’s production strategy for the 787. His overall point was the risk/cost curve that a firm must negotiate when either outsourcing or seeking new locations (read: South Carolina) to build a technically and technologically complex product like passenger airplanes. Boeing chose the roll the dice, now it is paying the piper.

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