The state report on the economic impact of the Boeing Co.’s 7E7 program had one set of numbers that really jumped out – new construction dollars.
According to the report, which was released last week, Boeing and its contractors could end up spending up to $508 million on new buildings between now and 2012.
That figure doesn’t include spending for new tooling. The consultants – who got the numbers from Boeing – put them in a separate line item.
No, that’s $508 million just to build or remodel buildings, and that’s a surprise.
During last year’s nationwide 7E7 site selection pageant, economic development officials from California to the Carolinas consistently threw around a $900 million figure when they talked about the size of the factory Boeing would build if it moved the Dreamliner away from Puget Sound.
One of the advantages of the Everett site was that Boeing wouldn’t need to put up that new building. Dreamliner program chief Mike Bair told reporters last summer that the company could reconfigure the building to house the new assembly line without making changes that would be visible to those of us driving past on Highway 526.
Given that, a report saying Boeing is thinking of spending hundreds of millions of dollars on construction caught some observers off guard.
“The numbers that I just don’t understand are the construction numbers,” said John Monroe, a former Boeing executive who is aiding the Snohomish County Economic Development Council as its aerospace outreach point man. “I don’t understand where those construction numbers come from.”
Boeing spokeswoman Mary Hanson said the company doesn’t have all the answers at this point. “There’s so many variables we just don’t know yet.”
Architects are still figuring out how much it will cost to remove the massive tooling Boeing now uses to build 777s and other jets in the factory. The massive jigs that hold airplane sections in place while mechanics put them together can be as large as a three-story apartment building.
Hanson said it’s also likely that Boeing will have to do some remodeling at the paint hangars, which are on the south side of the factory site, closer to the Paine Field runway. “You’re dealing with a composite airplane instead of an aluminum airplane,” and that will mean changes, she said.
And, she said, there’s the basic issue – “How do you modify an existing factory to support a totally new production system?” That might mean adding new walls or openings inside the factory. Then again, it might not.
“The ranges show there are a lot of questions we don’t have answers to,” Hanson said.
That $508 million figure represents the high end of a very wide range of possibilities. The data Boeing gave to Deloitte Consulting also suggest that new construction could cost as little as $77.4 million, with Boeing spending about two-thirds of that, and suppliers the rest.
Either way, the economic impact of that much new construction would be significant.
The report estimates that – at the high end – 7E7-related construction could result in more than 10,000 jobs at the peak of building in 2006. Even at the low end, construction is likely to create about 3,500 jobs.
Given that, the EDC and other players are eager to help, Monroe said.
“We can do anything to make those numbers come true,” he said. “Those are the kinds of numbers that really help the economy.”
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
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