Airbus parent company EADS is looking for an American city in which to base an aerial refueling tanker program, and state officials say Everett is a potential site.
The $3.2 billion tax package legislators approved to convince the Boeing Co. to build the 787 in Everett could end up being used in an effort to get a factory that would convert Airbus jets into military refueling tankers, officials said.
“It definitely will matter,” said Theresa Sanders, executive vice president of the Spokane Economic Development Council, Spokane is one of three Washington cities looking into the plant.
EADS officials will sit down next week with development officials from across the United States to discuss their proposals to build aerial refueling tankers for the U.S. Air Force.
The tankers, which would be based on Airbus’ A330 commercial jets, are being proposed as a direct competitor of Boeing’s KC-767, which is based on the 767 airliner built in Everett.
EADS does not have a contract to build the tankers and would have to convince both the Air Force and Congress to buy European-built planes.
But EADS said if it lands a contract, it will build an engineering center and a modification and assembly plant in the United States to convert the A330s for military use.
According to the Associated Press, the engineering center would employ up to 100 people and might be built whether EADS wins a tanker contract or not. If it were to land a tanker deal, the European consortium would spend about $600 million to build a plant that would employ up to 1,100 people.
EADS has asked states to submit proposals by March 30. About 20 states are expected to do so, AP reported. New Mexico and North Carolina are two that have said publicly that they are interested.
Representatives from Everett, Moses Lake and Spokane will attend next week’s meeting in Washington, D.C., said Michelle Zahrly, a spokeswoman for the state’s Department of Community, Trade and Economic Development.
The state is proceeding cautiously, she said, letting local communities take the lead on the project, while it provides support. But the state feels there’s no harm in listening to the EADS proposal, she said. “We want to explore, at least, opportunities to expand the aerospace market.”
Snohomish County officials declined to comment, as Jack Oharah, president of the county Economic Development Council. In Moses Lake, Grant County Economic Development Council spokeswoman Carolyn Spira did likewise.
But Sanders confirmed that Spokane is eagerly pursuing the plant.
The meeting is a chance to “get a firsthand look and hear from the horse’s mouth what we need to do,” she said.
“It is a long shot,” Sanders said. “But it’s a great opportunity.”
Spokane has property available between Spokane International Airport and I-90, and it has engineering and job-training programs that could produce the workers EADS would need, Sanders said.
But the big lure is the aerospace industry tax breaks the Legislature approved in 2003.
The $3.2 billion tax incentive package was written with Boeing’s 787 program in mind. However, the legislation was written so that any aerospace company operating in Washington could benefit from its provisions.
The big advantage is a 12.5 percent business and occupation tax rollback for aerospace companies that takes effect in October. A second reduction lowering the B&O rate another 40 percent will take effect in 2007 and continue through 2024.
The issues of tankers and Washington’s aerospace tax breaks have heavy political overtones.
EADS is able to pursue a U.S. tanker deal because Boeing’s $23 billion deal to supply it with 100 767 tankers fell apart after a politically charged investigation found wrongdoing involving Boeing’s former chief financial officer and a top Pentagon official.
The Air Force now is studying whether and when it needs to start replacing its 500 KC-135 tankers, some of which are more than 40 years old. Without a tanker order, Boeing is likely to shut down its Everett 767 assembly line this summer.
At the same time, the state’s aerospace tax incentive package has become part of the argument between the United States and the European Union over subsidies given to Airbus and Boeing.
That makes investigating the EADS proposal “an interesting one, given the broader political implications,” Zahrly said.
Boeing spokeswoman Leslie Nichols said the company had no comment on state communities exploring the EADS proposal. Boeing still feels the 767 would make a better tanker, she said, and still is hopeful of landing a deal with the Air Force.
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
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