Washington State will continue to look “Beyond Boeing” while paying close attention to the giant aerospace company’s needs in order to further strengthen the state’s aerospace industry.
The annual update to the Washington State Aerospace Industry Strategy focuses on the state’s relationship with Boeing—something expected given Boeing’s overwhelming dominance to the Washington economy and workforce—but recognizes the need to attract aerospace business Beyond Boeing in order to diversify its reliance on Boeing.
The 38-page PDF may be downloaded here: 2014 WA State Aerospace Strategy
(Disclosure: we first outlined a Beyond Boeing strategy in a speech at the 2009 Governor’s Aerospace Summit and were retained by the State’s Department of Commerce the following year to develop these ideas. We were given the opportunity to comment on this year’s draft update document.)
Washington, which for years more or less took Boeing’s presence in the state as a given, has become more aggressive in maintaining its relationship with Boeing since 2010, perhaps culminating in the $8.7bn in tax breaks last year to win the 777X final assembly line and composite wing construction site. The latter is considered by the state to be a key foundation for becoming Boeing’s composite center for decades to come.
Airbus complains that the tax breaks, which are based on 787 tax breaks that were ruled illegal by the World Trade Organization, are also illegal and create an unfair advantage for Boeing. The European Union is considering whether to file a complaint with the WTO.
Washington’s aerospace strategy is less a response to Airbus than to increasing competition from Southern states, which are aggressively courting Boeing (and Airbus) to develop aerospace clusters in South Carolina, North Carolina, Alabama and Texas. Kansas, which lost Boeing’s military operations in Wichita when Boeing closed these down, is also ramping up its aerospace strategy.
Washington is also courting Airbus, a delicate balance given the Boeing presence here. Airbus Commercial already buys from Washington’s aerospace supply chain. By company count, Washington is the #2 US supplier to Airbus (#5 or 6 by dollar volume) and Airbus’ US supply chief said last year he wants to double the business here.
The state is also continuing to increase its emphasis on aerospace education and training, though budget challenges since the global financial meltdown in 2008 make this a difficult prospect.
Officials are working to further develop the aerospace cluster in Spokane, in Eastern Washington, already the largest cluster within the state after the Puget Sound area, and it wants to develop the Moses Lake area in Central Washington as a composites cluster. The latter would build off a composites factory for BMW for its new electric car.
The Strategy update says that aerospace provides $76bn in direct, indirect and “induced” impact to sales in the state, $476m in state sales taxes, $70bn in revenues to the state’s economy, 132,000 direct jobs with $11.5bn in wages and 1,350 businesses contributing to aerospace at all levels.