JOHN CARLSON: Boeing’s decision not surprising
November 2, 2009 · 2:59 PM
By John Carlson
Before we address the question of “Who lost Boeing?” (the governor’s claim that “no one is to blame” is silly), let’s focus on a hint that went unheeded.
According to respected aerospace analyst Tom Captain from Mercer Island, five other aerospace companies, including Bombardier, Rolls-Royce and Global Aeronautica, considered doing component work in this region in recent years. All five firms studied Washington’s business climate and compared it to other places. All chose to locate their new facilities elsewhere.
Think about that. The plane-building capitol of America was unable to attract a single aerospace firm to assemble component parts of their aircraft in the Puget Sound area. When none of these companies want to come here, you have to wonder how much longer Boeing will want to stay here.
Why are we no longer the preferred place for plane building? The list is long. Land prices. Wages. The cost of the state’s worker’s compensation and unemployment insurance programs. Hassles with permits. The cost of living. And the attitude of the machinists union. In front of the union’s headquarters is a memorial. But it doesn’t show a group of machinists standing proudly in front of a gleaming new Boeing jet. It shows a striking family, fists and picket signs thrust in the air, standing around a burn barrel.
Add all these things together. Would you want to build a plane here? Boeing CEO Frank Shrontz warned way back in 1991 that this area was becoming uncompetitive for plane manufacturing.
Gov. Chris Gregoire and the Legislature could have gotten serious about worker’s comp and unemployment insurance. They didn’t. The machinists seemed to think that South Carolina was a bluff to win sweetheart concessions from the union here. When Boeing announced that it would build its second line there, union leaders instantly announced that Boeing used the union to win sweetheart concessions from the South Carolina Legislature. No matter what Boeing did, it was somehow preordained.
So what does the future hold for Boeing in Renton, Everett, Seattle and other places around here? Let’s review.
Forty years ago, there were about 100,000 Boeing employees in a state with about 3.5 million people. Now there are fewer than 75,000 Boeing workers in a state with more than 6.5 million people. More than 15,000 of them work on the eastside.
Both the 747 and 777 assembly lines will remain where they are. It would be economically senseless to move them, given where they are in their life cycle. The 767 line is pretty much dormant, but could spring to life if our congressional delegation scores that tanker deal from the federal government. It is likely that the line would be built here.
The 787 assembly line is now split. About two thirds of the Dreamliners will be built in Everett, the balance in Charleston. But that ratio can change over time.
The 737 is a popular jet and its assembly line in Renton remains in place. But in five years or so, Boeing will decide where to build the next generation of 737s and it’s not clear where that will happen. The decision will be heavily influenced by the next machinists contract and progress on workers comp and unemployment insurance in Olympia.
The most important lesson from all this is that Boeing’s future in this region was ours to lose. And bit by bit, slowly but steadily, we’ve been losing it. Time to wake up.