Create a free account to continue

Can Washington Win Boeing Contract And Keep Jobs?

Washington wins because of its experienced workers, but the state's higher pay and possible work stoppages because of labor disputes work against it, study says.

RENTON, Wash. (AP) -- 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.

The report from management consulting firm Accenture on Washington's aerospace competiveness 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. The governor promised she would make sure UW and WSU know that these are enrollment slots that should be offered to Washington students first.

-- $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.

U.S. Sen. Maria Cantwell said the Accenture report echoes what she learned in a hearing with aerospace leaders in Seattle last month: the state needs to invest in its future workers by making sure kids have enough training in math, science, technology and engineering.

"With the right investments and collaboration, we can ensure that the next generation of planes are manufactured by a skilled 21st century Washington workforce," she said.

Gregoire's 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.

More in Supply Chain