Ray Conner, vice chairman of the Boeing Co. and president and chief executive officer of Boeing Commercial Airplanes, speaks to employees in 2016 at a ceremony for the new Composite Wing Center building in Everett. On Thursday, Conner received the Aerospace Futures Alliance’s inaugural Titan of Industry Award. (Andy Bronson / Herald file)

Inslee urges Boeing to build its new jet in Washington

LYNNWOOD — Gov. Jay Inslee said Thursday efforts are under way to ensure the new mid-size airplane on Boeing drawing boards is eventually built in Washington.

Inslee said his staff has had “discussions with industry leaders” about the new plane, which company executives have unofficially dubbed the 797 and would be a replacement for the 757. Boeing officials offered details of the future aircraft at the Paris Air Show in June.

“We know our state provides the best value for building that airplane,” Inslee told a room full of aerospace executives and civic leaders in Lynnwood. “I think it’s reasonable for Washington state residents to expect that Boeing would build its next aircraft here.”

Inslee’s comments came in an address at the daylong aerospace summit in the Lynnwood Convention Center. The event was hosted by the Aerospace Futures Alliance, the industry’s leading lobby group in the state.

Afterwards, in a brief interview, Inslee stressed discussions are “very preliminary” and he’s not engaged in any negotiations with Boeing executives.

“We don’t have any greater insights (about the plane) than the public at this point,” he said.

Inslee’s address came shortly after Boeing Vice Chairman Ray Conner received the organization’s inaugural Titan of Industry Award.

“I’m really honored. This is a big deal,” said Conner, who joined the company in 1977 as a mechanic on the 727 program.

In the course of a 40-year Boeing career, he rose to become president and chief executive officer of Boeing Commercial Airplanes in 2012 after his predecessor, Jim Albaugh, retired.

Conner oversaw development of the 737 MAX, the turnaround in the 787 program and launching of the 777X program, which has brought in excess of $1 billion of investment in new buildings and machines at the company’s Everett plant. His tenure also included a bitter contract fight with the biggest union at the company, District Lodge 751 of the International Association of Machinists and Aerospace Workers.

On Thursday, he said he sees a “really bright” future for aerospace. But with a large swath of the skilled workers nearing retirement age, their ranks will need to be restocked to keep the industry competitive.

“The world has caught up with us. We need a workforce that is prepared and ready to compete on a world scale,” he said. “Our job as an industry, our job as a government, our job as a business and our job as a nation is to unite and create the workforce for tomorrow.”

Washington has an estimated 650 aerospace suppliers and 1,350 aerospace-related companies not named Boeing, according to the state Department of Commerce.

Executives of some of those suppliers echoed Conner’s concerns Thursday.

There are not enough workers with necessary training in the labor pool right now, said Matt Yerbic, chief executive office of Aviation Technical Services in Everett.

“I would hire another 200 people today if they were technically skilled,” he said.

Meanwhile, little mention was made Thursday on continued calls from union workers and some lawmakers to redo the suite of tax incentives enjoyed by Boeing and the rest of the aerospace industry.

State lawmakers originally enacted incentives in 2003 to land the 787 Dreamliner. They expanded and extended the tax breaks in November 2013 to help convince Boeing to build its newest jetliner, the 777X, in the state.

Boeing will avoid an estimated $8.7 billion in tax payments through 2040 as a result of the incentives. They helped the company save $242 million on its state tax bill in 2016 and $305 million in 2015. The company said it invested more than $13 billion into the state economy in each of those years, most of it on wages, benefits and expense-related airplane manufacturing.

Meanwhile, that 2013 extension was the target of the European Union, which claimed it is an illegal subsidy. Earlier this month the World Trade Organization appellate body rejected the claim and upheld the incentive.

Inslee told the audience the WTO ruling affirms the state’s ability to offer incentives with conditions.

“We insisted when that (extension) was adopted that the 777 plane be built here and it was the right thing to do,” he said. “We insisted on conditions that have to be met to keep jobs in Washington.”

The International Association of Machinists and Aerospace Workers District 751 and the Society of Professional Engineering Employees in Aerospace lobbied lawmakers in 2013 to extend the tax breaks thinking it would preserve, and even increase, their ranks at the aerospace giant.

Instead, Boeing has reduced its workforce in Washington by roughly 15,500 jobs since late 2013, a drop of nearly 20 percent. It has prompted repeated but unsuccessful attempts in the Legislature to trim the incentives if job losses continue.

Inslee expressed his frustration to aerospace executives in February 2016 telling them “some measure of future job accountability is worth considering.”

On Thursday, he said not yet.

“Right now what I’m focused on is making this the best place to continue our status as the best place to make airplanes,” he said.

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

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