Washington on the move for new aerospace business

Washington State is showing signs of some real life in a slow ramp up to gain new aerospace business.

For years, nay, for decades, state politicians took Boeing for granted. Boeing officials complained and complained and complained about the need for better education, for smoother permitting processes, an onerous business climate and more. Officials warned over and over that they might move operations out of the state if things didn’t change.

When Boeing decided to move its corporate headquarters from Seattle to Chicago–with no notice to state officials it was even contemplating a move–politicians were shocked and called it a wake-up call.

Nothing happened. Officials hit the snooze button, turned over and went back to sleep.

Then Boeing held a competition in 2003 over where to assemble the 7E7 (later officially named the 787). Then-Gov. Gary Locke and the Legislature scrambled and ponied up $3.2bn in tax breaks over 20 years. It was another wake-up call.

After winning the assembly site for the Everett plant, officials hit the snooze button again.

Christine Gregoire was elected governor in 2004 (Locke retired after two terms), went to the Paris Air Show in 2005 and then didn’t go to Europe for aerospace until after being criticized in April 2009 for being a no-show for Washington’s aerospace. The state’s Department of Commerce, with little money made available to it in the Gregoire budgets, had embarrassingly small booths at the shows, especially compared with the pro-active Southern States.

Gregoire by executive order created the Washington Aerospace Council when the Legislature–controlled by her own political party no less–refused to authorize it. But WAC was largely a do-nothing group that more or less simply talked to itself.

Then Boeing located 787 line 2 assembly in Charleston, another wake-up call. And once more, the snooze button was hit.

Then Boeing said the 737 MAX might not be built here in Washington, and another task force was created to win this business. In the end, a deal between the IAM 751 union and Boeing had more to do with keeping the MAX assembly here (though we question whether there was any serious prospect of it going elsewhere), but once more the state responded with an ad hoc action rather than a strategy.

Gregoire, in her final year in office (2012), finally created the Governor’s Office of Aerospace–something that she should have done years before, and in truth, something Locke should have done during his eight years in office.

WAC was dissolved and the Washington Aerospace Partnership was created instead–but as we have noted previously, there isn’t a single representative from industry on WAP, an inexplicable omission.

Then in a budget standoff in the Legislature between the Democratically-controlled House and the Republican-controlled Senate, the Republican budget inexplicably deleted funding for the Governor’s Office of Aerospace–and this was followed by Republican Sen. Mike Hewitt complaining the state wasn’t doing enough to support aerospace. (Funding survived, finally, in the budget that ultimately was approved.)

Washington had a large presence at this year’s Paris Air Show, both in the booths and in state officials representing the state seeking new business. And Gov. Jay Inslee, Gregoire’s successor, after a Gregoire me-too “program” announced in May to “win” the assembly site for the 777X, last week announced plans to use a law passed in 1997 but never implemented to declare the 777X a project of statewide significance that will allow almost instantaneous permitting.

This is the kind of innovative thinking that’s needed out of the Governor’s office, and raises the obvious question: why didn’t Locke and Gregoire use this law before to make things easier for Boeing?

The director of the Governor’s Office of Aerospace, Alex Pietsch, also revealed last week (in the Seattle Times article linked above, at the bottom) that two consultancies have been retained through WAP (on which he sits) to identify incentives and other things that need to be done to help Washington aerospace.

Because there have been several previous studies on competitiveness, we asked Pietsch what is expected from these new studies that haven’t already been discussed. Pietsch replied:

One is for an economic benefit analysis of the aerospace industry in Washington. This analysis hasn’t been performed since 2008 and will help us demonstrate the value of any potential additional investments necessary to win the 777X.

The second is analysis of Washington’s competitive position for the 777X. It will build off the work that was done in 2011, but look back at all of the State’s investments in support of aerospace since Project Olympus (the 787 effort in 2003) and make recommendations about what may be needed to win design and final assembly of the 777X, fabrication of its wing, and to maximize opportunities throughout the supply chain for the State of Washington.

Both studies are expected to be complete by the end of September.

And tomorrow Thursday, the Department of Commerce and the Pacific Northwest Aerospace Alliance are holding the state’s first Airbus supplier forum. Forty percent of the suppliers surveyed by the state supply Airbus, and the state aims to increase this.

Inslee, in office only since January, clearly is far more attuned to aerospace than either Locke or Gregoire were. He initially offered a weak plan to win the 777X but he, along with Commerce, is picking up steam.

It’s about time. Washington has been hitting the snooze button for decades. It’s long overdue to wake up and get out of bed.



17 Comments on “Washington on the move for new aerospace business

  1. It still sounds more like a patch work quilt than a strategic plan. The State of Washington is still relying on reactive plans as opposed to proactive plans.

  2. IMHO- State should push Moses lake for several reasons

    earthquake unlikely, tornado and h urricane unlikely, flood unlikely, power available, major size landing field and rail available, reasonable chance of getting some locals to transfer, and relatively lower cost of living, mostly moderate ( but warm ) temperatures, low humidity, lots of space.

    great for tanker overhaul and maintenace, etc

    But the major downside is that side of the mountains is not exactly liberal even though great for bicycle commuting :-PP

    • Don,
      How about pushing Spokane? It has most all the benefits that you listed for Moses Lake and it is a real metropolitan area.

      However, I have no illusions about anything ever happening there. It seems Spokane has never really been successful in attracting anything major from Boeing. It’s almost like those in charge think that the city will just sell itself. They’re going to have to play the game if they want to attract real aerospace investment.

      • Spokane doesn’t have the infrastructure to support a major airplane manufacture like Boeing or Airbus (even though Spokane is Washington’s second largest city). Also the local politics of Spokane and Eastern Washington are much different than Western Washington and the Sea-Tac area. Moses Lake is not big enough to have political clout with to deal with Olympia (which is also in Western Washington).

        When the state is talking about attracting aerospace they are only really talking about the state that is west of the Cascade Mountains, which by-sects the state and really defines Eastern and Western Washington.

      • KC,
        I’m not sure why you say Spokane does not have sufficient infrastructure. Spokane international has one 9000ft runway (very similar to the main at Paine Field) and another 8000ft runway. Rail trunk lines run relatively close to the airport, and there is still a lot of open land around. Spokane was reportedly on the short list for the 737MAX production location, although I wonder if Boeing ever really seriously considered other locations besides Renton for the MAX.

        I’m pretty well aware of the West vs. East politics, having grown up in Spokane (I still visit family fairly often) and attended the UW, so in my opinion, politics is where Spokane and the surrounding “Inland Empire” consistently lose out. In the time it takes for Eastern Washington to barely get the North Spokane Corridor started (less the 1/4 completed dollars wise) Western Washington gets the Tacoma Narrows Bridge expansion, the Alaskan Way Tunnel, and the 520 bridge replacement.

        Eastern Washington has not proved successful at getting their share of the money which has more to do with a lack of political will in my opinion. It seems to me the leaders are happy with things the way they are, settling for Spokane as being a great place to retire.

      • mea culpa – I said moses lake when I meant to say spokane – Why ? There is this little airbase called Fairchild which has BIG landing field, nearby rail, etc. My confusion came from lack of sufficient coffee in AM.

      • Don,
        You bring up a great point about Fairchild with its long runway, although the DoD would have to get involved, which could take ages.

      • Perhaps people will be “willing” to relocate when the Soviet Union re-coalesces and the new dictator starts banishing people there again.

  3. Washington State needs to go further, and broader, than it has. The effort to get project approval in Construction can be flat out amazing. King County, on the Boeing Field paint hanger project made Boeing put up a bond for the value of the building to allow it to start construction before the ‘too busy’ reviewers could review it. Construction was 9 months in before they completed the review.

    Washington will always be a higher cost state, but the state needs to streamline their rules and regulations to keep that disadvantage as small as possible.

  4. What about a new facility in Ireland? Before you know GTF powered A321s will roll of the lines in Alabama and Tianjin. We can use the jobs and investments. We bought so many US aircraft that building them here too makes sense for us.

    • Because it wouldn’t provide any cost advantages (barring massive govt subsidies, hey, how are the Irish govt’s finances? Oh, that bad?…). And as the current political situation should make abundantly clear, locating industry in *any* EU county will not induce other EU countries to purchase more Boeing aircraft the way relocating a facility to *any* US state would likely garner influence in DC. Brussels (or, let’s be honest here, Berlin) wouldn’t care about an Irish FAL. So it would provide no political advantages either. Similarly, facilities set up in China will only be left marooned there as relations between the PRC, the US and the other East Asian states continue to deteriorate (as they will) in the coming years. Brazil or Argentina would I guess be possibilities.

      • “relocating a facility to *any* US state would likely garner influence in DC”

        Will any US airline buy Airbus aircraft for other reason then price, specs and performance? How does that work?

        “massive govt subsidies”
        I guess European government can also subsidize Boeing by giving massive tax cuts.Why not?

        “So it would provide no political advantages either.”
        It would give massive political advantages! The aircraft would be build in Europe where their customers are. The local government would have a great political advantage; creating new jobs and business! And it could give Boeing leverage in the EU! Maybe the an NSA FAL would be a good start. Labor cost in Ireland are relatively low and they can use the jobs and family incomes!

  5. Mike Bohnet :
    You bring up a great point about Fairchild with its long runway, although the DoD would have to get involved, which could take ages.

    I dont think DOD would be a major – significant roadblock. BA uses it sometimes for flight test of commercial AFIK, and it no doubt will be an alternate or sub station for Tankers supporting pacific fleet issues. There is bucu infrastructure in place, and a great place to do maintenance and with downsizing of military with trained mechanics, etc It seems to me that those are just some of the plusses.

    Of course it helps to have some WA state reps on armed services Kommittee aka Norm Dicks

    Still, remember the ‘ east side ‘ vs the ‘ west’ side is more like the sharks and jets- the only thing lacking is ‘ lets get ready to rumble “

    • yes I know Norm is retired- but he has this neat phonebook and a few old friends and knows the secret handshakes . . .

  6. Pingback: Key leaders hit back at Boeing “exodus” assertions’ CSeries competition for the Big Two | Leeham News and Comment

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