Boeing will move 1,000 engineering jobs from Washington State to California, The Seattle Times reported today. Predictably, the engineers union, SPEEA, is having fits about this.
Washington State probably won’t be too happy, either, especially after giving Boeing nearly $9bn in tax breaks to build the 777X here.
We’re going to set aside the debate with the union and Boeing and the Washington impact and try to take a larger view.
Boeing says the move is, in part, to bring more focus onto the Commercial Aviation Services division. There is a desire to make CAS more of a revenue and profit producer than it has been, which to now has been an important but small part of the contributions to Boeing’s bottom line.
Services are increasingly important to several aerospace OEMs. Rolls-Royce, GE Aviation and CFM have long made services key components of their sales efforts and Pratt & Whitney/IAE are ramping up their efforts in this field. Airbus has some effort in services, but lags CAS.
Another factor Boeing faces is the decline of its Long Beach operation. Inherited from McDonnell Douglas, aircraft production ends next summer with the final deliveries of the C-17 military cargo transport. Shifting after-market support and customer support to Long Beach enables Boeing to retain some of this talent that will be surplussed and develop new job opportunities there. From a corporate, 35,000 foot level, this makes sense–as does further building up South Carolina, which has benefited from other job transfers.
According to The Seattle Times, one SPEEA member points out that Long Beach is not unionized, and we presume this to be the case. But doing business in California is hardly inexpensive; its business climate it worse than Washington. So we’re not entirely convinced that cost is the prime driver with respect to Long Beach.
As for Washington, we’ve been advocating for years that officials need to prepare for the days when Boeing moves jobs out of state. Each time there has been a victory in retaining an aircraft program, officials seem to go, “whew,” sit back and relax. We’ve been advocating the creation of a “Washington Institute of Aerospace” that could serve as an independent research and development center and in-source work from outside the US, and/or serve as a global training center. With Boeing laying off engineers and IT people, there is a core group that could form the basis of a WIA. But officials continue to wear blinders and have taken no steps that we’re aware of to look “Beyond Boeing” in this fashion.