Leaders from the Boeing Co. and state and local governments on Friday signed the key documents committing Boeing to building the 7E7 Dreamliner in Everett — and committing Washington taxpayers to contributing $3.2 billion to Boeing and its partners over the next 20 years.
The deal means Boeing and the state will work together to build "the first true signature airplane" of the new century, said Gov. Gary Locke. "We will give Airbus executives many sleepless nights for years to come."
"We’re on our way," said Mike Bair, Boeing’s senior vice president in charge of the 7E7 program, who signed on behalf of the company. "If this year was busy, next year will be twice as busy."
State and local government agencies also will be busy in coming months.
Along with reaffirming the tax breaks, Friday’s agreement commits the state and city of Everett to appointing eight coordinators to help Boeing negotiate environmental and land-use permits, transportation and workforce training issues — even someone to make sure that Boeing gets all the 7E7 tax breaks it has coming.
The city agreed to issue land-use permits to Boeing within 60 days, as long as the applications meet conditions spelled out in previously approved land-use plans.
State officials also committed to expediting Boeing permit applications. The agreement says 7E7 permits will have "priority status over all other projects" received on or after the date Boeing submits its paperwork.
Within six months, the state will set up an Aerospace Futures Board. That board, to be made up of industry and government agency representatives selected by Boeing, will oversee the creation of a program to train workers specifically for 7E7 jobs, either at Boeing or at suppliers that are expected to set up facilities near Boeing’s Everett plant.
The state will buy or construct a building for the new state-of-the-art training center and outfit it with equipment that meets Boeing specifications. For the first five years of its operation, it will be used solely to train workers for Boeing and its 7E7 suppliers. After that, it is to become a public training school.
In addition, the state’s community colleges pledge to set up a two-year degree program in aerospace manufacturing, to train more potential workers.
The agreement further gives Boeing the option of selling the 7E7 manufacturing facility to Snohomish County, the Port of Everett or some third party, then leasing the building back from the new owners.
Such sale-leaseback agreements are common ways for companies to raise cash in the short term. Representatives of the port and Boeing said Friday they didn’t know yet whether the company will exercise the option.
The state Department of Transportation and Everett also agreed to road and traffic-control improvements around the factory.
The list of specific projects was not available Friday, but the agreement commits the city and state to building a road network capable of handling 83,000 workers — more than four times the number now working for Boeing at Everett — by 2030.
Snohomish County agreed to make improvements to the runway at Paine Field, and the state’s Department of Community, Trade and Economic Development agreed to help Boeing develop a plan for a three-jet fleet of modified 747 cargo jets to fly large parts to Everett from overseas suppliers.
The port also agreed to modify its foreign trade zone so it includes the 7E7 plant.
Foreign trade zones are federally designated areas where companies can bring in foreign-made goods — such as jet parts — without paying import duties. The advantage to Boeing is if the parts are used on jets sold overseas, there is no federal duty. If they are used on jets sold in the United States, the duty is charged only on the foreign content of the plane.
If Boeing hasn’t begun final assembly of the first 7E7 by July 1, 2007, the deal is off. Boeing’s plan is to build the first jet in 2006, spend 2007 testing and certifying it, and begin deliveries in 2008.
Local officials were jubilant at the signing ceremony.
"I’m excited, relieved," port executive director John Mohr said. "It’s just a wonderful day for the entire community."
State Sen. Paull Shin, D-Mukilteo, called it "the best Christmas present we’ve ever had."
More than 20 states submitted bids on the 7E7 project, he noted, which required Washington to submit a competitive bid.
The stakes couldn’t have been higher, Shin added. "My feeling was if we didn’t get the contract here, this would be the beginning of the end of commercial airplane construction in Washington state."
Shawn Megis, an interiors installer on Boeing 777s, said he had mixed feelings about the project. "I’m glad that it’s here, but it seems like most of the plane’s going (to be built) overseas," he said. "It seems to me they could have put a whole lot more people to work than they did."
But David Shealy, a 7E7 engineer, was more upbeat.
"You bet I’m glad it’s going to be built here," he said. "It’s great for our economy and great for our country."
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
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