EVERETT — Getting the 7E7 Dreamliner assembled in Everett would not erase the nightmare of the past two years of layoffs at the Boeing Co., local economists say.
But a commitment to build the new jet here could signal the start of a new future for Boeing in the region where it was born.
"Psychologically, it would have a huge impact," said Donna Thompson, a state labor analyst. "We’ll have been selected out of a pretty large field of potential sites. It will make people feel that Boeing will stay here in the long term, that there’s a future in Boeing."
That kind of morale boost would have real value for Boeing, even if it is something that doesn’t show up in "a strict cost analysis, a points-scoring scheme," said Dick Conway, a Seattle economist.
Boeing’s 11-member board of directors meets today and Monday in Chicago to decide whether the company will go ahead with plans for the 7E7 — plans that may include assembling the new jet in Everett.
Nothing is certain, and company officials have warned that the decision on where to base the new jet program could be pushed back until early 2004.
But it seems unlikely that the board will block the program. New Boeing CEO Harry Stonecipher — one of the company’s largest individual shareholders — has endorsed the 7E7 concept.
Boeing is laying plans for a 7E7 employee meeting and a major announcement in Seattle on Tuesday, presuming there will be some news to celebrate.
The 7E7 is the future of Boeing in commercial aircraft. It will be made largely of high-tech composite materials and will incorporate new engine and cockpit technology that will make it up to 20 percent more fuel-efficient than current models.
It also will be built in a new way. Suppliers will finance and build large sections and deliver them to the final assembly site, where a smaller cadre of Boeing mechanics will snap the jets together in days instead of weeks.
As a result, the program would not be a job-creating bonanza. Boeing says it would employ 800 to 1,200 workers on the 7E7 line. Thompson estimates supplier jobs would be double that number.
But a new airplane program here would be cause for celebration in a region that hasn’t had much Boeing news to cheer in recent years.
"I see no reason why the future can’t be relatively bright for Boeing in Puget Sound," said Conway, the Seattle economist.
The recent past has been tumultuous. Since spring 2001, Boeing has:
n Moved its headquarters from Seattle to Chicago.
n Laid off 40,000 workers companywide, of which nearly 30,000 were from Puget Sound plants.
n Scrapped plans to launch the 747X and Sonic Cruiser programs, and announced it was discontinuing its 757 model, all the while watching archival Airbus go ahead with its A380 superjumbo.
n Lost sales and market share to Airbus, which has surpassed Boeing in orders two of the past three years and is poised to pass it in deliveries for the first time in 2003.
n Gotten involved in defense contract scandals that have sparked federal investigations and cost the company about $1 billion in lost satellite launch contracts and, eventually, cost former CEO Phil Condit his job.
n Conducted a nationwide search for a site to build the 7E7 after sharply criticizing Washington state’s business climate.
All that has created some marked unease, Thompson said, a sense that "if we lose (the 7E7), it’ll be the first in a long series of dominos."
A decision to keep 7E7 assembly in the Puget Sound area would allay a lot of fears, Thompson said.
Conway said he’s never believed that it made sense for Boeing to seek a new site.
There are cheaper places than Washington to do business, but, "You can’t go to the bottom line, because there are so many things you can’t quantify," he said. "The benefits of moving to a place that might offer lower labor costs … would be outweighed by the risk of going somewhere else."
Just as Boeing would benefit by staying in the Puget Sound area, the region stands to gain by having the company remain here, Conway said.
In spite of all Boeing’s problems, its Commercial Airplanes division has remained profitable. And now, Boeing has the right strategy in focusing on midsized jets such as the 7E7 and is poised for new growth, Conway said.
"I’ve always liked their argument that point-to-point is what passengers want," he said. "We’re going to start seeing a real pickup in orders."
Boeing has already decided to keep the 7E7 engineering team in place in Everett, Conway noted. And Boeing’s 767 refueling tanker remains an airplane the U.S. Air Force needs.
Given all that, "In a matter of weeks, things could be looking really bright" both for Boeing and the region, Conway said. "I haven’t been all that rosy lately. It’s nice to say something positive for a change."
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
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