Landing the Boeing 777X: How 15 states compare

  • By Dan Catchpole Herald Writer
  • Saturday, December 7, 2013 11:51am
  • Business

More than a dozen sites are fighting to land production facilities for the Boeing Co.’s new plane, the 777X. The contenders have until Tuesday to make their best case for final assembly, building the plane’s wings, or both.

The Daily Herald has compiled data relevant to Boeing’s siting requirements to see how states compare. Our ranking is based on a variety of factors, some of which are outlined here. Admittedly, it is an imprecise accounting that involved judgment calls and speculation, as well as facts.

Based on reporting by The Herald and other media, the states to be considered will be Washington, Alabama, California, Utah, Texas, Missouri, North Carolina, South Carolina and Pennsylvania. Wisconsin wasn’t contacted by Boeing but is making a bid.

Other states included in our analysis have been identified as possible contenders, but we have been unable to confirm their participation.

Interactive: 15 states compared

Bottom line: Everett makes the most sense

How many hurricanes have hit your city in the past century? Is there a runway at least 9,000 feet long? A seaport? What about a 4.2 million-square-foot building?

Those are some of the things the Boeing Co. is considering in deciding where to build the new 777X airplane and its wings, according to the request for proposals the company sent to more than a dozen locations.

Boeing won’t comment on how it plans to evaluate the bids, which are due Tuesday. But Everett is the best fit on paper, according to several aerospace industry analysts and The Herald’s own analysis of potential sites, shown at the top of this page.

The longtime home of Boeing widebody jet production has the overall edge over contenders because of an existing skilled workforce, education and training programs, regulations, and transportation, among other criteria that likely will shape the company’s final decision.

The Herald obtained a copy of the RFP documents from a third party outside Washington. Boeing won’t comment on the validity of the documents, which were first revealed last week by the Charlotte Observer in North Carolina, one of the states making a bid.

Despite Everett’s suitability for building the 777X, Washington lawmakers moved quickly last month to make it even more appealing to the Chicago-based aerospace giant by extending tax breaks and other financial incentives worth about $8.7 billion. Boeing put the question out for bid after members of District 751 of the International Association of Machinists and Aerospace Workers (IAM) rejected the company’s contract proposal. Many union members saw it as an ultimatum to save jobs in return for cutting benefits.

“We had an opportunity to win this without any competition,” Gov. Jay Inslee said Friday. “That doesn’t mean we’re not in competition today. We’re in the game. It has just started.”

State officials have declined to discuss how they might sweeten Washington’s bid.

Moving production out of state will only invite “potential disasters” like Boeing has experienced at its South Carolina 787 assembly plant, Inslee said. The company’s second 787 line began assembly more than a year ago and has not been producing as many jets as Boeing had hoped.

No other state can match the scope of Washington’s financial incentive package, which also covers Boeing’s 737, 747, 767 and 787 assembly lines in Everett and Renton.

In fact, the existing tax breaks that were extended last month were already so big that the World Trade Organization ruled them illegal in 2010. That same year, the WTO also ruled that Boeing’s main competitor in commercial jets, Toulouse, France-based Airbus, also gets illegal subsidies.

That isn’t scaring off states hoping to land the 777X. Last week, Missouri passed an incentive package estimated to be worth as much as $1.7 billion.

In the RFP documents, Boeing outlines other incentives it wants, including free land for the factory and having all or most of the construction costs covered.

It won’t be easy for contending states to meet such big expectations. Most states’ incentives are based on cutting a company’s tax bill across many years or easing permit approval.

“We provide a lot of incentives over a long time, not a lot of cash up front,” said Don Hackler, a spokesman for the Oklahoma Department of Commerce.

Oklahoma is home to large maintenance and repair facilities for the U.S. Air Force and American Airlines. Hackler wouldn’t confirm or deny that the state is bidding for the 777X.

But Oklahoma has two big problems: It doesn’t have much experience actually building commercial jets, and it is landlocked — though it does have sea access via rivers.

Those are two factors that also hurt San Antonio, Texas, said Richard Aboulafia, an aerospace industry analyst with the Teal Group in Fairfax, Va.

Access to a seaport is less important if Boeing decides to build the wing components in the same place as final assembly, he said.

“It greatly reduces your need for a seaport, but it makes your labor problem much worse” because it increases demand for skilled labor, giving workers more leverage over the company, Aboulafia said.

Another top contender, Long Beach, Calif., already has strong organized labor and no room to expand, said Scott Hamilton, an analyst with Leeham Co. in Issaquah.

South Carolina isn’t a real possibility, given the production problems with the 787, he said. “Charleston is still a debacle.”

Huntsville, Ala., has lobbied heavily for the work, but with Airbus’ first North American factory about to start production in Mobile, the small state could be hard-pressed to meet both companies’ needs for skilled labor.

“Chicago is more than ready and more than willing to build this plane somewhere else where it feels it can get the best economic situation,” Hamilton said, referring to Boeing’s headquarters.

But for many analysts, including Aboulafia, the best economic situation means one place: Everett.

Jerry Cornfield contributed from Olympia.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com.

The prize: 777X at a glance

All models:

  • Wingspan of 223 feet, five inches — the greatest of any Boeing airplane. The wingtips will fold.
  • GE9X engines by General Electric — the biggest ever.

777-9X: 400 passengers, 8,200 nautical miles. List price: $377.2 million. First delivery: 2020

777-8X: 350 passengers, 9,300 nautical miles. List price: $349.8 million. First delivery: 2022

Source: Boeing

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