By Jim Davis The Herald Business Journal
EVERETT — It has been several tumultuous months with the Machinists vote, the revote and the Boeing decision to build its new 777X airplane in Everett.
Economic development leaders say the fallout and what it meant if Boeing had built the plane elsewhere is galvanizing them.
“I don’t know if it shook a little sense in us, but it made us realize because of that importance to think further about diversification,” said John Monroe, chief operating officer for Economic Alliance Snohomish County.
Part of that is encouraging businesses — specifically aerospace suppliers — in the Puget Sound area to become less dependent on Boeing.
“This is about the suppliers, this about the rest of the aerospace industry,” said Linda Lanham, executive director of the Aerospace Futures Alliance of Washington. “It’s not about Boeing.”
When it started to plan to build its next generation of the 777, Boeing sought concessions from their workers as well as tax breaks and other benefits from city and state governments.
Otherwise, the company would have considered moving the line elsewhere.
The local economy would have been devastated if Boeing had decided to pull out. Monroe pointed to one study that showed the 777 line means 19,800 direct jobs in the Puget Sound area, $2.5 billion in direct wages and benefits and $132 million in total tax revenue.
While Boeing’s commitment to build the 777X in Everett is a win, businesses should consider broadening their customer base, Monroe said.
There are companies in Snohomish County that do 90 percent of their business with Boeing.
“If I owned that company or managed that company, that 90 percent number would really bother me,” Monroe said.
He said Economic Alliance Snohomish County wants to encourage businesses to diversify. That comes in many flavors.
For starters, businesses that are reliant on Boeing should consider working with other aerospace companies.
And these suppliers should consider what they have to offer industries. That would insulate the businesses from the peaks and valleys they face now.
“Right now, things are really positive, but we’ve all been around long enough to know there’s always a cyclical nature of the aerospace business,” Monroe said.
Skills that have been developed to help Boeing over the years translate well into other industries, Monroe said.
“One of the things we have really strong in Snohomish County is machine shops,” Monroe said. “They can mill out a 20-foot spar or an inch-long widget if you need it. We have companies here that do that.”
It makes sense to find companies that can rely on those machine shops. A couple of industries that could use those skills are the maritime and medical device industries, Lanham said. Diversification is something economic development leaders have been thinking about for some time.
“I’m very excited about the response,” she said. “This is a very high priority for us. It would actually stabilize the manufacturing base here in Washington.”
Another effort is to convince other companies to move to this area. Snohomish County has lots of appeal to other businesses, Monroe said. It’s got a large, skilled workforce. It has land to be developed, a good infrastructure system with highways, ports and a major airport in Paine Field. And there is an abundance of community banks.
Boeing committing to the area has a spillover effect. A company with that size and success fosters other development.
“When you have a solid base like the Boeing Company, it’s a springboard for entrepreneurs,” Monroe said.
At this point, economic development leaders say they know what they want to do. The next phase is trying to determine how to make it happen.
“What we’re trying to do by the end of this year or hopefully sooner is to develop business plan or a strategy to put all of this together,” Lanham said. “So we actually have a plan that is workable.”
Monroe added Gov. Jay Inslee and Everett Mayor Ray Stephanson need to keep their promises to Boeing, from the city’s willingness to issue building permits within 30 days to the state planning to add training in the community.
“Governor Inslee will do what’s necessary and make good on his commitments,” Monroe said. “Mayor Stephanson’s word is good as gold. He has the utmost integrity and credibility and has the whole city behind him.”