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State has work ahead to keep aerospace jobs

The new governor is facing a host of challenges to keep this vital industry happy.

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By Michelle Dunlop
Herald Writer
Published:
Until this year, Washington state could claim to be the only spot in the country where commercial jets are built.
But in 2012, the Boeing Co. delivered the first 787 aircraft built in South Carolina. And within a few years, Alabama will join the jet-making club when Airbus workers in Mobile deliver their first A320.
Keeping Washington's aerospace industry happy is a necessity for government officials in 2013, as the state swears in a new governor.
"The challenge for the state of Washington is: How are they going to continue to grow the aerospace industry with the budget woes they've got?" said Scott Hamilton, an analyst with Issaquah-based Leeham Co.
More to the point: Can the state retain what it has?
In recent years, with the help of industry organizations, the state and local governments in Washington have gotten behind training and education efforts geared at the aerospace industry. With her term waning, Gov. Chris Gregoire earlier this month included another $26 million for aerospace training in her 2013 to 2015 budget proposal.
But it will be up to Gov.-elect Jay Inslee to set the state's aerospace strategy.
"Aerospace is one of the priority clusters in (Inslee's) jobs plan," Sterling Clifford, an Inslee spokesman, said in an interview Friday.
A looming wave of aerospace workers retiring will put pressure on the state to ensure there's a training plan in place to meet the industry's needs. Inslee is aware of that, Clifford said.
Linda Lanham, executive director of the Aerospace Futures Alliance, advocated for many of the worker training programs that are in place.
"We need to make sure we're always on top of training," she said. "We need to keep it up."
Lanham and Hamilton both say that a long-term state plan for the aerospace industry is badly needed. Hamilton noted that the state has to follow through on any strategy it devises, something Washington has failed to do in the past.
After landing the original 787 final assembly line in 2003, Washington "was just complacent" in terms of staying competitive in the aerospace industry, Hamilton said. In 2009, Boeing picked North Charleston, S.C., as the site of a second 787 assembly line. This month, Boeing reached a deal that would allow the company to expand its North Charleston site by as much as 1,100 acres.
It's not just South Carolina that has Hamilton worried for Washington. Alabama, North Carolina and Florida are in the hunt for aerospace jobs, too.
"The state needs to have a really good strategy to beat back the South, quite honestly," Hamilton said.
And Washington can't afford to wait another year or two to put in place a plan for retaining and growing one of its key industries. This year, Gregoire appointed Alex Pietsch as director of the governor's office of aerospace. Pietsch is responsible for crafting a statewide aerospace plan. He has spent the past several months gathering input from the state's 1,248 aerospace-related companies to understand industry's needs and the work already being done.
"The state needs to continue to build on its momentum," Pietsch said.
But the state's aerospace plan is in a holding pattern until Inslee takes office.
Besides the budget crunch and need for a longer-term strategy, Inslee will have a few other aerospace-related issues to tackle, Hamilton noted.
First, he'll need to "kiss and make up" with Boeing's rival Airbus, which Inslee blasted for receiving illegal financial handouts from European governments when Airbus' parent company and Boeing competed for a lucrative contract with the Air Force.
"Inslee did everything he could to piss off Airbus as a congressman. That could be a real problem as governor," Hamilton said.
While Boeing is the state's No. 1 jet maker, Washington also is one of the top suppliers in the nation to Airbus. That means hundreds of small or medium-sized companies in the state depend on doing business with the European jet maker.
The incoming governor also could face a big test early in 2013 if the union representing Boeing engineers and technical workers goes on strike. The Society of Professional Engineering Employees and Aerospace and Boeing failed to agree on a new contract this year and talks between the two sides have been heated.
In 2008, Gregoire visited the picket lines when the International Association of Machinists and Aerospace Workers went on strike against Boeing. That didn't win the governor favor with Boeing's corporate officers in Chicago, Hamilton said. Rather than showing support for either the union or the company, Inslee would be better off to take a neutral mediator role, he said.
Michelle Dunlop: 425-339-3454; mdunlop@heraldnet.com.

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