Gregoire outlines $9.8 million plan to win Boeing 737 MAX

EVERETT — Snohomish County’s hopes for securing work on future Boeing Co. jets depend largely on how the state responds to Gov. Chris Gregoire’s $9.8 million plan to win the 737 MAX.

“It is essential that our region’s stakeholders acknowledge that investing in work force is about much more than the 737 MAX; it is about the future competitiveness of all aerospace programs in Washington state, including Snohomish County,” said Troy McClelland, president of Economic Alliance Snohomish County.

Boeing builds its single-aisle 737 jet in Renton. But the company is eyeing other locations to assemble its re-engined version of the plane, called the 737 MAX. The company is expected to make its decision in the next several months.

On Wednesday, Gregoire outlined her proposal to boost aerospace training and education in order to land 737 MAX work. Her plan is based on recommendations made by a consulting firm, Accenture, which completed a study of the state’s competitiveness.

“We believe there are 20,000 jobs and $500 million in tax (revenue) at stake” in the contest to win work on Boeing’s updated 737, Gregoire said.

Washington’s greatest strength — its skilled aerospace work force — will become a weakness should the state fail to develop a plan for replacing thousands of workers who will retire over the next decade, she said. Boeing and its suppliers are increasing production rates and need thousands of employees at the same time as their older, more skilled workers are retiring.

John Monroe, also with Economic Alliance, noted that the work force challenge will be key when Boeing considers the fate of its Everett-built 777. Boeing could decide to upgrade that airplane, like it has with the 737, in the next several years. But like with Renton and the 737 MAX, Everett wouldn’t be a shoo-in for the refreshed 777.

“We can’t just sit back and think this is a King County or a Renton problem,” said Monroe, a former Boeing executive. “It’s all of our problem.”

Gregoire’s plan calls for $7.6 million to go toward adding capacity for 775 extra engineering students at University of Washington and Washington State University. About $1.5 million will go for creating a research center. Additional money would be directed toward K-12 programs.

It’s possible the added engineering positions will mean more engineering students in Everett through WSU. The university will begin offering engineering courses in Everett in 2012. Leslie Goldstein, a senior policy adviser to the governor, said it’s up to the universities to decide which campuses will get the extra positions.

James Tinney, a WSU spokesman, said it’s too early to say what WSU will do. But the governor’s call for increasing funding for engineering “is promising for Everett,” he said.

Although similar calls to action for more aerospace training and education have fallen short, Gregoire said she was confident this one will work even amid a budget deficit. The governor has reached out to legislative leaders for their support.

Still, Washington faces competition for aerospace work from other states. Accenture looked at several other locations, including the Carolinas, Alabama, Kansas and Texas, said Craig Gottlieb, a senior manager at Accenture, who wrote the study. For the 737 MAX, San Antonio, Texas, is Washington’s fiercest competition, with Wichita, Kan., also a close competitor, he said. Texas offers lower labor and transportation costs.

The “productivity advantage that Washington workers have significantly mitigates the (higher labor) cost,” Gottlieb said.

Looking out at future contests, the study found that Washington won’t be in as good of a competitive position when Boeing looks at an airplane using new technology — a greater use of composites, for example. Workers in Everett piece together Boeing’s mostly composite jet, the 787. But only the 787’s composite vertical fin is built in Washington state. That’s something to keep in mind should Boeing refresh its 777 with a composite wing, Monroe said.

“Do we have the skilled workers here to build really large pieces of composite technology?” he asked.

The 737 MAX contest

Washington’s strengths: Quality and productivity of the workforce; in-state supplier network for the 737 program; Boeing’s fabrication sites.

Weaknesses: Not enough engineers and manufacturing workers; labor-management relations; higher labor and building costs in the state compared to others.

Source: Accenture report

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