Aerospace conferees discuss a $5 trillion future

EVERETT — The world wants more commercial airplanes, Boeing wants to build them and the governor wants to make sure they’re built in metro Puget Sound.

That was the takeaway from separate presentations Wednesday by Boeing executive Randy Tinseth and Gov. Jay Inslee at the ninth annual Governor’s Summit in Everett.

The two-day summit, which was organized by the Aerospace Futures Alliance, drew a couple of hundred industry insiders to Xfinity Arena.

Tinseth spoke about Boeing’s 20-year market forecast, which was released this summer, and the company’s business strategy. Boeing is in the process of overhauling the commercial jetliner catalog. Several longtime mainstays of Boeing’s product lineup — the 737 Next Generation, the 767 and the 777 classic — either have been or will be replaced by new airplanes — the 737 MAX, the 777X and the 787 — by the early 2020s.

The Chicago-based company’s catalog is based on what customers — mostly airlines and airplane leasing companies — are expected to be looking for when they go shopping for jetliners several years from now.

Boeing’s outlook affects what airplanes are produced, and that affects workers and suppliers.

In the early 1990s, for example, the aerospace giant asked Mukilteo-based ElectroImpact to prove it could make fasteners strong enough to use on a super jumbo jet — a class solely today occupied by the A380, a mammoth airplane built by Boeing’s rival, Airbus Group.

ElectroImpact delivered what Boeing wanted, but two years later the airplane maker said it wouldn’t build a super jumbo jet because it didn’t expect enough demand during the next 20 years, said an engineer at ElectroImpact.

Airbus expected more demand and developed the A380, which it has struggled to sell.

ElectroImpact continues to supply the aerospace industry, of course, and on Wednesday the company announced it will build automated carbon-fiber–reinforced polymer machines that Boeing will use to make wing panels and spars for the 777X.

The machines will be built in Mukilteo and installed in a new building next to Boeing’s big Paine Field factory. It’s a classic example of Boeing’s local ripple effect, and it could be just the start.

Boeing expects demand for 36,770 new airplanes over the next 20 years, a market worth an estimated $5.2 trillion. Airbus last week released its own updated outlook, which is slightly more conservative. The European consortium expects worldwide demand for 31,350 airplanes worth approximately $4.6 trillion.

Both agree that the largest demand will be for single-aisle airplanes, such as the Boeing 737 and Airbus A320 families.

There are other companies and countries that want to break into that market. China is expected to need 6,000 single-aisle jetliners, and the country’s political leadership has backed efforts to boost domestic airplane production. Russia and Japan are also trying to get into the market. More-established airplane makers Embraer of Brazil and Bombardier of Canada are also developing airplanes to compete with Boeing and Airbus.

“Ultimately, one or two of these new manufacturers will be successful. I think it probably will be later than sooner,” said Tinseth, vice president of marketing for Boeing Commercial Airplanes, which is headquartered in Renton.

In the end, “who decides who will be successful will be our customers.”

It won’t be an easy task for those upstarts.

“We’ve seen over the last few years, bringing new airplanes to the market is difficult,” he said. “It’s been difficult for us. It’s been difficult for Airbus. And it’s been really difficult for some of these new entrants. What we do is a challenge.”

As for new competition in the twin-aisle market, “I can’t imagine that would happen soon,” Tinseth said.

Delivering the keynote address, the governor promised to work to keep Washington in the top spot in the aerospace industry. Among the state’s good news this year was Boeing’s decision to assemble the 777X and make its composite material wings in Everett. Ahead of that decision, the state extended existing tax breaks for Boeing worth an estimated $8.7 billion over 10 years.

More work needs to be done, though, Inslee said. “The Legislature has yet to pass a transportation package,” something he pushed for along with the tax package.

“I remain committed to making sure we get that done,” he said.

Inslee did not mention legislation proposed by labor advocates to add job requirements to the tax package, which Inslee and other supporters said would keep jobs in the state.

But Boeing will still get the tax breaks despite announcements this year that it will move thousands of engineering and other white collar jobs out of state.

The two main unions representing Boeing employees in Washington — the International Association of Machinists and Aerospace Workers (IAM) and the Society of Professional Engineering Employees in Aerospace (SPEEA) — are pushing to add more teeth to the aerospace tax breaks.

“We want to incentivize job creation here in Washington, not incentivize jobs leaving Washington,” said Chelsea Orvella, SPEEA’s legislative director.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

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