SEATTLE – The Boeing Co. and its suppliers will hire at least 2,860 people this year to work on development of the 7E7 in Washington, according to a report issued by the state on Tuesday.
When the program is in full swing by 2012, between 3,250 and 9,280 Washington residents will be directly employed building the Dreamliner – about two-thirds of them at Boeing. The spending by Boeing, its suppliers and people working for both will support another 4,800 to 14,790 jobs in the state down the road, according to the report.
Overall, the economic impact of having the Dreamliner built in Everett will be between $20 billion and $40 billion over the next 20 years, according to the consultant who crunched the numbers.
Given that, offering Boeing $3.2 billion in tax incentives to build the plane here was a wise move, said Mark Klender, a principal with Deloitte Consulting. “I’d call that a deal any state would make,” he said.
The study of the economic benefits of the 7E7 program was part of the deal between Boeing and the state that brought assembly of the jet to Everett. The study looked at the jobs and revenue benefits that will be seen by the state as a whole, but noted that the majority of them will be in Snohomish, King, Pierce and Skagit counties.
The report “is clearly great news,” said Robin Pollard, who is leading the state’s effort to help Boeing launch the 7E7. “We’ll see the 7E7 be that anchor for the future of the aerospace industry in Washington.”
Boeing’s oft-quoted early estimate was that the 7E7 would create between 800 and 1,200 jobs. But that figure, Pollard said, looked only at the number of people Boeing would hire to do the hands-on assembly work.
It did not include the number of Boeing people who will work on engineering, sales, marketing and other support functions, nor did it include the jobs that would be created within Washington by the suppliers who will actually build much of the new plane.
Based on estimates Boeing provided to the state, the consultants determined that the company itself will hire at least 1,800 people this year in the state to design and work on tooling for the new airplane.
Major suppliers will create at least 500 more jobs by year’s end, the report said.
That could include new construction jobs. Boeing will spend at least $3.1 million on new buildings this year, the report said, and at least another $3.4 million on industrial machinery.
The employment total could go as high as 5,090 by year’s end, the report said.
The estimates represent “the program’s best guesses at this point,” said Mary Hanson, a spokeswoman with the 7E7 program in Everett.
The consultants predict that peak activity will come in 2006 as Boeing and its suppliers build and remodel the tools and buildings needed to assemble the new airplane. The report projects Boeing will spend at least $76 million on construction, machinery and assembly tools that year.
Coupled with increased hiring for work on the new plane itself, the 7E7 project will generate between 7,120 and 15,820 jobs in that period.
The study “didn’t look outside the walls of the 7E7 program,” Klender said. Given that, it’s impossible to say whether the people working on the 7E7 program will represent additional jobs at Boeing or replacement jobs for workers laid off from existing programs.
“They (Boeing) don’t know where these people are or where they’re coming from,” Klender said. They could be new hires, transfers or people recalled from layoff.
In any case, “these jobs are going to be staying in Snohomish County,” said Deborah Knutson, president of the Snohomish County Economic Development Council. “If it wasn’t for the 7E7, they’d be going.”
State and local economic development officials said they are “aggressively” working to recruit Boeing’s major suppliers to set up shop in the state so they can be close to the assembly line. They’re also trying to help the state’s network of small aerospace suppliers connect with the big suppliers so they can share in the project.
Knutson said her agency has been meeting with those companies, but none have made moves because they’re still in negotiations with Boeing over the details of the work they’ll do on the new airplane.
The state has drawn criticism from the Evergreen Freedom Foundation for hiring Deloitte Consulting to do the report. The conservative think tank noted that the consulting firm is a branch of Deloitte &Touche, which is Boeing’s corporate accounting firm, and that Deloitte Consulting worked with the state to develop the $3.2 billion bid.
Pollard said the work was reviewed by outside economists who agreed with Deloitte’s findings.
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