State-Funded Study Finds Puget Sound Has Strong Economic Hand

Boeing, which was forced into developing a a more fuel-efficient version of the 737 single-aisle aircraft in part by the success of the Airbus A320neo, now faces a decision on where to build the plane. In recent times, officials of the state of Washington might have been tempted to take Boeing's production in the region for granted, but the construction of a new 737 plant in South Carolina appears to have shaken that confidence.

Governor Christine Gregoire (pictured) has commented recently about an Aerospace Competitiveness Study commissioned by the Washington Aerospace Partnership. Now, a report in the Renton Reporter reveals some details which support the state's contention that it remains the best location for construction of the new 737 MAX.

Underwritten by the state and conducted by Accenture, the study concludes that the productivity of Boeing's experienced workforce in the greater Seattle area is an exclusive advantage. The report also notes, "The network of existing Boeing and supplier facilities in Washington that support the 737 production are likely to provide Boeing a faster return on its 737 MAX manufacturing investment versus building brand new in-state or out-of-state assembly facilities."

The study compared 14 cities in California, New Mexico, Texas, Kansas, Alabama, Florida, South Carolina and North Carolina.

While the study may be comforting to officials of a state which prides itself on strong unions and laws which keep them that way, Boeing has been hinting for years that as long as unions, notably the International Association of Machinists and Aerospace Workers, have the ability and apparently proclivity to shut down aircraft production for long periods, the company feels its reputation as a reliable manufacturer is at risk. Boeing has made clear that the building of a new 737 plant in South Carolina, a state which prohibits compulsory union membership in factories, and the development of a fully separate supply chain for the facility, are hedges against future strikes.

The first deliveries of the new 737 MAX aren't expected until some time in 2017, but Boeing is expected to announce the location of its new plant in the next few months.

FMI: www.boeing.com