Suppliers crucial to Boeing, but their future here is uncertain

  • By Michelle Dunlop, Herald Writer
  • Thursday, September 9, 2010 2:15pm
  • Business

Inside the Boeing Co.’s biggest airplane, Troy Weigel walks across the uneven temporary flooring as the sharp thud of a rivet gun pierces the relative calm of a Friday afternoon at the typically bustling Everett factory.

Weigel and Rob Linke crouch down in the front section of the first 747-8 passenger plane, placing a long, narrow part whose pale green color signals it’s made of aluminum. It’s a mop sill, and it’s being installed where the floor and sidewall meet. “It’s basically a finished edge,” Weigel said.

The mop sill — one of millions of parts that make up a Boeing 747 — makes sure “everything is aligned properly,” said Scott McCrite, a manufacturing manager on the 747 production line.

The piece begins its journey into a 747 not at Boeing, but up in Arlington at AMT’s manufacturing site. From there, it travels to Skills Inc.’s Puget Sound-area sites, where workers smooth any sharp edges, treat the sill chemically and add a special coating.

Eventually, the mop sill makes its way to Boeing’s Everett factory, where Weigel installs it in the new 747-8 passenger plane. The 747 is the jet that brought the Boeing Co. to Everett more than 40 years ago. Aerospace parts suppliers, like AMT and Skills, soon followed.

Today, Snohomish County is home to roughly 160 aerospace companies. The state has more than 650. But the future of the industry in the county and region is uncertain.

Will aerospace continue to grow here?

Roughly a year ago, Boeing Co. officials met secretly with representatives of the company’s Machinists union to try to negotiate a long-term labor contract. Boeing had a decision to make: where to put a second 787 production line. In October, the company picked South Carolina over Washington.

“Boeing sent a huge statement when they picked South Carolina,” said Deborah Knutson, executive director with the Economic Development Council of Snohomish County.

About 14 percent of the county’s workers are employed in the aerospace industry, and nearly 22 percent of the county’s total wages come from aerospace companies. Not surprisingly, county officials like Knutson worry about the county’s and region’s ability to attract new suppliers after Boeing’s decision.

The EDC recently prepared a study of the gaps in the supply chain for the aerospace industry in Washington, noting both its strengths and weaknesses. Already Snohomish County is home to airplane structure manufacturers like Goodrich; maintenance, repair and overhaul shops like Aviation Technical Services and engineering firms like Global Aerosystems.

Still, the state lacks a diverse supply base in several areas: engine and seat manufacturing, galley and lavatory manufacturing, and entertainment equipment manufacturing, said John Monroe, aerospace coordinator with the EDC.

Its strengths?

“We really look at machining as a strength,” Monroe said.

Finishing, too.

But the EDC believes the state needs a recruitment strategy and a better business climate before Washington or Snohomish County can go courting companies from outside the state.

County Executive Aaron Reardon said he believes the Legislature needs to enhance the aerospace company tax incentives he helped write in 2003 to land the first 787 line.

“The state hasn’t done anything to make it more competitive since 2003,” he said.

Monroe points out that many of the tax breaks don’t apply to all the state’s aerospace companies. And some believe it’s too cumbersome a process to bother with, he added.

“The state’s aerospace incentive package was developed for Boeing,” Monroe said.

Branching out from commercial airplanes into defense or space work helps companies balance out the ebbs and flows of aviation, but it doesn’t improve the suppliers’ tax picture.

There has been some talk from local lawmakers about introducing legislation in the 2011 session to extend tax breaks to defense work like unmanned aerial vehicles for manufacturers like Boeing subsidiary Insitu in southwest Washington.

Reardon doesn’t believe the county or state should focus on just one segment of the aerospace market, like defense or commercial airplanes.

“If we make ourselves competitive then we can make the argument” to the industry as a whole, he said.

Incentives aren’t the only thing on the mind of Linda Lanham, director of the Aerospace Futures Alliance. Lanham and Reardon helped establish an aerospace training center at Paine Field. Providing training opportunities tailored to companies’ needs will help keep the region’s major competitive advantage — its skilled work force — a step ahead of its rivals.

“We’ve got to make sure we’re staying on top,” she said.

Still, Lanham knows that South Carolina has tried to recruit aerospace companies here either to relocate to South Carolina or to open a second location there.

“They are being approached,” she said.

Upcoming big decisions by Boeing — about the future of its 777 and 737 aircraft — could sway companies that are on the fence.

One area where Snohomish County has been strong: courting aerospace companies, like Esterline, from King County. County officials have their eyes on possible additions.

Many of the aerospace companies located in Snohomish County, or Washington state, have parent companies in a different state, Monroe said. That’s both good and bad news. The parent companies may not be as loyal to Washington state as the subsidiary located here is. However, Knutson sees opportunity in trying to bring more work from the parent company into the state.

Despite its recent troubles, Snohomish County still has much to offer. The aerospace companies and workers here, “they feed off of being in this cluster,” Reardon said.

Lanham concurred. “I don’t see any problems that would (thwart) a thriving industry here.”

Snohomish County aerospace

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