Boeing: Process Should Work Again
Boeing will pick the final assembly site for its next-generation
jetliner, the 7E7, in a public competition similar to what it used
in 2001 when it selected Chicago as its world headquarters,
according to a senior member of Boeing's management team.
Over the next several months, Boeing intends to lay out publicly
its requirements for building the new airplane in Washington.
Elected officials and perhaps even voters themselves will be asked
to meet those criteria to try to win the airplane for Puget Sound
area surrounding Seattle and Tacoma (WA).
"We'll soon be making some specific ideas known to Washington
State," said Bob Watt, Boeing's vice president for government and
community affairs. "We're committed to a fair and open conversation
for final assembly of the 7E7. It will be public." The list of
criteria will not be presented as a do-or-die ultimatum; and
meeting all of the criteria will not guarantee that Washington will
win the competition. But it will be a wish list that state
officials will find hard to ignore.
"It would not be this company's style to say, 'Hit this list or
else,' " Watt said. "It will be our style to say, 'Here are some
very important criteria in our decision; please let us know what
you can do about these criteria.' "
Boeing Suppliers Already Know This Tune
The same kind of competition is already going on as the company
selects communities to supply 7E7 components. This week, Boeing
asked Kansas legislators for a $500 million package of tax breaks
and other economic development incentives to ensure that Boeing's
Wichita plant is in the running to build components and
subassemblies for the 7E7.
The decision on a final assembly site can't be
made until Boeing knows who its major global partners will be and
where its parts will be shipping from. The decision will be
momentous for this state, the home of Boeing's commercial airplane
manufacturing operations since its inception in 1916. The 7E7
represents the future of the commercial airplane division. If it's
built elsewhere, airplane manufacturing here will wind down over a
period of around 20 years, the life span of the newest jet
currently built here, the 777.
Washington Gov. Gary Locke and other elected representatives
have been consulting with Boeing on what its needs will be.
"(Washington officials) have been calling," said Watt, "and we've
told them, when we know more we'll get back with you for more
conversations. We'll have those conversations with you first and
then we'll have them with the whole rest of the country."
Watt acknowledged that with massive budget deficits,
unemployment and recession, the state will have to dig deep to come
up with what is needed. He also addressed the political gridlock
that has paralyzed state politics in recent years. Voters have
twice rejected specific Boeing-backed proposals —
unemployment-insurance tax changes, and a gas-tax proposal to
Action on both these issues was recommended by the Governor's
Competitiveness Council, chaired by Boeing Commercial Airplanes
chief Alan Mulally. Boeing has repeatedly pointed to the
competitiveness council report as a starting point for the state to
keep Boeing production here, but Watt said there will be a specific
7E7-related request as well.
Do They Have The Will?
Though there seems little time for dramatic
progress in Olympia before the 7E7 decision is made, Watt expressed
confidence that legislators could overcome whatever obstacles exist
given the political will.
"Is it too late? I don't think so," Watt said, "The legislature
has on more than one occasion convened in special session and done
remarkable things. This public conversation about the 7E7 will make
that broader conversation considerably more pointed. We're thinking
In Kansas, Boeing has asked for $500 million in tax incentives
and other government contributions, by far the biggest incentive
package ever requested by a company, said Kansas Senate President
Jeff Turner, vice president and general manager of Boeing
Wichita, told the Wichita Eagle the incentives could include tax
breaks, bonds or any number of other economic development tools.
The company is looking for financial help with technology
development, design work and tooling that will be needed to build
major components of the 7E7, he said.
Turner said Wichita's pool of skilled aircraft workers also is a
plus, but competing sites around the globe have offered to put up
money. Companies in Japan, Italy, France and Spain are competing
for the work, he said.
Asked what Boeing Wichita would be building in the future
without the 7E7, Turner replied: "I don't like to think about