Gov. Jay Inslee greets Everett Mayor Cassie Franklin after a news conference in Seattle last week, where officials released a report on the state’s strengths in aerospace manufacturing. (Ted S. Warren / Associated Press)

Gov. Jay Inslee greets Everett Mayor Cassie Franklin after a news conference in Seattle last week, where officials released a report on the state’s strengths in aerospace manufacturing. (Ted S. Warren / Associated Press)

A glowing pitch to entice Boeing avoids some touchy issues

The state’s aerospace competitiveness study overlooks two key unknowns: labor relations and politics.

OLYMPIA — An alliance of labor, business and political leaders sought to remind the Boeing Co. last week why the company has always chosen to launch passenger airplane programs in Washington rather than elsewhere.

The alliance released a study intended to prove that Washington — with a skilled and productive workforce, extensive aerospace supply chain, low electricity costs and valuable tax incentives — offers Boeing the least-risky and quickest-to-profitability option for building the next aircraft on the corporate drawing board.

When those factors and a slew of others examined in the report are added up, Washington is head, shoulders and torso ahead of any other state that might desire to be the manufacturing home of the so-called middle-market airplane dubbed the 797.

“This is not a puff piece,” declared Gov. Jay Inslee at the rollout of the Aerospace Competitiveness Economics Study on Wednesday at a news conference in Seattle. “This is a scientifically rigorous report.”

Yet the 40-page document studiously avoids subjects which have stressed and strained ties between company executives and workers, as well as with some Democratic members of the Legislature.

There’s no mention of labor relations, which in recent decades have included divisive contract battles and strikes. Neither is there discussion of a political climate in which some lawmakers want to require Boeing to sustain a minimum level of employment if it wants to keep receiving tax breaks worth hundreds of millions of dollars each year. Nor is there much on the bevy of business and environmental regulations of concern to the company.

The report acknowledges these are “qualitative factors” with a potential value in calculating a state’s ability to positively support aerospace manufacturing. But they are not measured in the study.

“We’re not qualified to address those,” said Richard Aboulafia, vice president of the Teal Group of Fairfax, Virginia. He’s the report’s primary author and one of the world’s top aerospace industry experts. “It’s our job to provide the numerical analysis.”

Members of the Choose Washington New Middle-Market Airplane Council, which commissioned the study, said the lack of discussion of those factors doesn’t undermine the report’s conclusion. The council is an alliance of representatives from labor, aerospace, education and government.

“It doesn’t impact the efficacy of the report,” said Kelly Maloney, president and chief executive officer of the Aerospace Futures Alliance. “That report is a data point and acknowledges we have other areas to work on.”

Jon Holden, president of International Association of Machinists and Aerospace Workers District 751, said the report contains “everything that impacts what a company should take into account when they decide to locate an airplane in a particular area.”

Brian Bonlender, director of the state Department of Commerce, said: “This report is designed to demonstrate that we’re the best place to build” the new plane.

Nonetheless, such intangibles have always been part of the decision-making calculus of Boeing and thus cannot be ignored.

“Anything that has to do with costs is going to be important to Boeing,” said aerospace analyst Scott Hamilton, owner of Issaquah-based Leeham Co. “That absolutely includes labor costs and regulatory costs.”

Political climate matters, too, Hamilton said. Will there be a welcoming Legislature that says “what do you want, Boeing?” — or a hostile one that wants “clawbacks” of tax incentives based on employment levels.

In 2011, as Boeing pondered where to assemble the 737 Max, the Washington Aerospace Partnership commissioned a competitiveness study. Members of the partnership are pretty much the same folks involved in the current council.

Accenture Management Consulting produced a 122-page report. It identified many of the same advantages for Washington as did the Teal report: a highly productive and knowledgeable workforce and a network of existing Boeing and supplier facilities in the state that could provide the company with a faster return on its investment.

It also listed disadvantages, such as the effect of recession-driven cuts in funding to public schools and colleges, and higher wages, benefits, pensions and health care costs for workers.

And the report dedicated a full page to considering the potential impact of work stoppages.

“While the state can influence many competitiveness factors, the threat of work stoppages and delivery delays is an externality that may outweigh other considerations for a site selection,” the authors concluded. “Improvements to the management-labor culture on these areas would strengthen Washington’s competitive advantage versus other states.”

In 2013, labor relations and the political climate eclipsed the selection process for the home of 777X, a derivative of the 777 assembled in Everett.

Boeing invited states to submit bids. And Washington responded with a 165-page proposal.

But it might not have mattered much. Because from the outset, Boeing made it clear there was an open-and-shut case for Washington if the Legislature extended tax credits, which it did in November 2013, and if the Machinists union ratified a concession-laden contract extension, which it did in January 2014.

It is too early to know if Boeing intends to conduct a competition for the 797 in the same fashion. The existing Machinists contract runs through 2024.

“Our members would have their say. If, for example, it’s 2020 and they come to us, our members would have to vote to open up our contract prior to its expiration,” he said. “Our members are a big reason for the company’s success. Our members are not interested in giving concessions like we did in 2014.”

Council members did not intend for the report to look into this subject, he said.

“For this effort, we felt we should focus on those things we agree on — that the right place is here,” Holden said. “What we have in place here is an amazing aerospace infrastructure.”

Maloney of the Aerospace Futures Alliance had a similar attitude.

“There is a lot more from the perspective of the industry that needs to be done to win the NMA (New Middle-Market Airplane) for Washington state,” Maloney said.

One reason the state’s economy is doing well is because of Boeing and the aerospace industry, she said. That’s the focus of the report and should be the focus of the council’s effort.

“Washington can’t take Boeing for granted,” she said.

Jerry Cornfield: 360-352-8623; jcornfield@herald net.com. Twitter: @dospueblos.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Kim Skarda points at her home on a map on Thursday, June 20, 2024 in Concrete, Washington. A community called Sauk River Estates has a very steep slope above it. There is a DNR-approved timber sale that boarders the estate properties, yet they were not consulted about the sale before approval. The community has already appealed the sale and has hired their own geologist to conduct a slope stability report at the site. (Annie Barker / The Herald)
Beneath steep slope, Concrete neighbors fear landslides from logging above

Nielsen Brothers plans to cut 54 acres of timber directly behind the community of 83 homes. Locals said they were never consulted.

Law enforcement respond to a person hit by a train near the Port of Everett Mount Baker Terminal on Thursday, June 27, 2024 in Mukilteo, Washington. (Annie Barker / The Herald)
2 killed in waterfront train crashes were near Mukilteo ‘quiet zone’

In June, two people were hit by trains on separate days near Mukilteo Boulevard. “These situations are incredibly tragic,” Everett’s mayor said.

Rob Plotnikoff takes a measurement as a part of the county's State of Our Waters survey at Tambark Creek in Bothell, Washington on Monday, July 1, 2024. (Annie Barker / The Herald)
Snohomish County stream team bushwhacks a path to healthier waterways

This summer, the crew of three will survey 40 sites for the State of Our Waters program. It’s science in locals’ backyards.

Logo for news use featuring the municipality of Mountlake Terrace in Snohomish County, Washington. 220118
4th suspect arrested after Mountlake Terrace home robbery

Police arrested Taievion Rogers, 19, on Tuesday. Prosecutors charged his three alleged accomplices in April.

A 10 acre parcel off of Highway 99, between 240th and 242nd Street Southwest that the city of Edmonds is currently in the process of acquiring on Monday, July 10, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)
Edmonds ditches $37M Landmark public park project off Highway 99

The previous mayor envisioned parks and more in south Edmonds, in a historically neglected area. The new administration is battling budget woes.

Edmonds school official sworn in as Mount Vernon supe

Victor Vergara took his oath of office last week. He was assistant superintendent of equity and student success in Edmonds.

Everett
Everett courthouse garage briefly closed for ‘suspicious package’ report

A man drove his car into the Snohomish County Courthouse garage and reported he believed the package was in his car.

High-capacity magazines at The Freedom Shoppe gun store, which was holding a sale in anticipation of new gun control measures, in New Milford, Conn., April 2, 2013. The store is liquidating their stock of weapons expected to be banned. Months after the massacre of 26 people at a school in Newtown, Conn., legislative leaders in the state on Monday announced what they called the most far-reaching gun-legislation package in the country. (Wendy Carlson/The New York Times)
WA high court leaves ban in place for now on high-capacity ammo magazines

Monday’s decision will keep the law in effect until the court hears arguments, possibly this fall, on the bill sponsored by an Edmonds senator.

Firefighters respond to a 911 call Tuesday morning in Mill Creek. (Photo provided by South County Fire)
Mill Creek house fire displaces 3

Firefighters responded to a house fire in the 14100 block of 30th Avenue SE early Tuesday morning. No one was injured.

Alyvia Nguyen, 8, climbs on leaf shaped steps at the new Corcoran Memorial Park playground on Friday, July 12, 2024 in Bothell, Washington. (Olivia Vanni / The Herald)
New Bothell-area park ‘could not be a more fitting dedication’

In 2019, Jim Corcoran donated $1.5 million worth of land to become a public park. He died before he could see it completed.

Cars line up for the Edmonds ferry in Edmonds, Washington on Thursday, Dec. 7, 2023.  (Annie Barker / The Herald)
Ferry line jumpers face a $145 fine — and scorn from other drivers

Law enforcement is on the lookout for line cutters. It’s a “hot-button issue that can lead to something worse.”

Mother charged in Stanwood toddler’s fentanyl overdose death

Morgan Bassett woke up in January 2022 and found her daughter wasn’t breathing. Last week, she was charged with manslaughter.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.