The Boeing Co. on Wednesday said it will spread the engineering effort behind the soon-to-be-launched 777X program across the country and to Russia, and that “no decisions have been made about 777X design or build in Puget Sound.”
That doesn’t mean Everett won’t get 777X work — even the bulk of it. But in failing to put Everett on a list of six cities, the company, wittingly or not, sent a strong signal to leaders in Washington, although that signal is as ambiguous as ever.
The news was delivered in an internal email to employees from Mike Delaney, the vice president of engineering for Renton-based Boeing Commercial Airplanes, and Scott Fancher, vice president and general manager of airplane development.
The carefully worded email reveals nothing about where Boeing will locate lead engineering for, and assembly of, the 777X.
But it makes clear that the company plans to decentralize work:
“Today we are announcing engineering workforce plans for the 777X program. As you know, Commercial Airplanes recently established multiple engineering design centers as part of a long-term strategic vision that will enable and support Boeing’s overarching growth and competitive strategy. Commercial Airplanes will utilize these engineering design centers, as well as engineers from other Boeing sites, to design the 777X.
“It has been decided that much of the detailed design will be carried out by Boeing engineering teams in Charleston, Huntsville, Long Beach, Philadelphia and St. Louis. The Boeing Design Center in Moscow will also support the design activity. However, at this time, no decisions have been made about 777X design or build in Puget Sound.
“Our goal is to leverage skills from across the Boeing enterprise. A program of this size requires that we bring together all of the talent that Boeing has to offer. In addition, we are leveraging lessons learned on 787 and 747-8 to ensure continuity across the 777X program to accomplish the key design work. The announced structure will allow for an efficient use of resources and enable Boeing to resolve design issues effectively the first time.
“Thank you for your continued hard work to ensure we deliver ground-breaking value for our customers.”
The cost of labor in Washington has been a theme in speeches and interviews by Boeing executives for several years. Some 23,000 engineers and technical workers here are represented by the Society of Professional Engineering Employees in Aerospace (SPEEA). Those workers reached agreement with Boeing on new four-year contracts earlier this year.
SPEEA represents engineers elsewhere, as well, but the ones working at North Charleston, S.C., where the company has a second, nascent 787 assembly line, are non-union. As of the end of July, Boeing employed 6,637 in South Carolina and continues to hire there. Washington has 84,884 Boeing workers.
On Wednesday, SPEEA Executive Director Ray Goforth said the email about 777X engineering is more about the 787 than the 777X. “We fully expect Puget Sound to play the key integrating role needed to avoid a replication of the problems experienced by the 787 program,” he said.
“What they’re saying is that work that had been outsourced on the 787 program is going to be brought back within the Boeing Co. and that much of that is going to be distributed to these other engineering centers that have been hit hard by sequestration,” Goforth said, referring to a decline in federal military contract work.
When Boeing developed the 787, it decided to rely on suppliers in the U.S. and abroad to design and assemble key portions of the carbon-fiber-composite jetliner. Problems with quality and productivity among those non-Boeing suppliers led to a three-year delay in first deliveries of the 787.
Goforth is correct in that Boeing’s presence in Huntsville, Ala., Long Beach, Calif., Philadelphia and St. Louis is related to defense or space. But there is little or no defense work in North Charleston, which is why Washington leaders are nervous.
In a conference call Tuesday, program managers for the Renton-built 737 told reporters that Boeing is pleased to have a growing South Carolina engineering presence that is attractive to prospective employees who wish to remain on the East Coast or in the South. Engineers in South Carolina are involved in designing components of the forthcoming 737 MAX.
The original 777 was designed in Everett, and that’s where the successful and lucrative plane has been built for almost 20 years. Ensuring that the next generation of the airplane is designed and built at Paine Field is a stated priority of Gov. Jay Inslee and lawmakers.
So Inslee and other political and business leaders still have their work cut out.
In a written statement, the governor said: “Despite the announcement, it remains clear to me that we have the opportunity to actually build this airplane in our state. That’s why I am working as we speak with a bipartisan group of legislators to craft a significant package of investments that will further demonstrate to Boeing why Washington is the best place to build the 777X. This will include an extension of our existing tax incentives, a robust transportation package, a commitment to streamlined permitting, education investments, and other cost saving measures that will directly support Boeing and our entire aerospace industry.”
Said Issaquah aerospace consultant Scott Hamilton of Leeham Co.: “We think this is an ominous development for Washington, but at the same time it could well be another of Boeing’s masterful chess games to extract incentives from Washington, South Carolina or the undisclosed state.”
The 777X will be a major makeover of the airplane. While the fuselage will be aluminum like the original model built today, the wings are to be made of carbon-fiber composite material, among other improvements.
The formal announcement of the program’s launch is expected at the Dubai Air Show Nov. 17-21. Bloomberg News reported on Wednesday that Boeing is in talks with four airlines interested in buying the 777X. They are Emirates, Qatar Airways, Etihad Airways and Cathay Pacific.
Chuck Taylor: 425-339-3429; ctaylor@heraldnet.com.
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