Valdosta Daily Times

National, International News

November 15, 2013

Boeing may move 777X out of Washington state

SEATTLE — Boeing’s history in the Pacific Northwest dates back more than a century, when William Boeing purchased a Seattle shipyard that would become his first airplane factory.  

In recent years, however, those ties have been fraying, first with the company shifting its headquarters to Chicago, then with the development of a new production line in South Carolina. Now, the relationship between Boeing and Washington state is near the point of unraveling after a fiery debate among machinists this week led the workers to reject a long-term contract.

On Thursday, Boeing made good on its threats and began looking elsewhere to develop its popular new 777X airplane. A spokesman for Utah Gov. Gary Herbert said Boeing officials called him to begin talks that could bring the work — and thousands of jobs — to that state.

Boeing Co. spokesman Doug Alder declined to specify where the company is now looking, saying there is no short list and that there are many places both within Boeing’s current operations and outside that are being explored.

“Everything is back on the table,” he said.

Boeing has helped anchor western Washington state’s economy for decades, but that relationship began to fray about 15 years ago. In 2001, the company moved its headquarters from Seattle to Chicago.

In 2003, Washington state lawmakers approved a broad package of tax breaks for Boeing in hopes of securing long-term work on the company’s new 787 airplane. While that plane is being built in the Puget Sound, Boeing has since developed a new production line in South Carolina and placed wing production in Japan.

Alex Pietsch, who serves as Gov. Jay Inslee’s leader on aerospace issues, said Thursday he now expects fresh competition for the 777X line from places like South Carolina, Texas, southern California, Utah, Alabama and Georgia.

“This is arguably the most significant prize in commercial aviation history,” Pietsch said.

The governor’s office is hopeful that Boeing and the machinists can come back together in the near future to explore a potential compromise — perhaps when both sides have had a chance to cool down from the recent contract battle, Pietsch said.

In the contract vote late Wednesday, The International Association of Machinists District 751 rejected the proposal with 67 percent of the votes. Union members who called for a no vote did so in protest of Boeing’s push to end a traditional pension plan and increase their health care costs.

The deal would have exchanged those concessions for the long-term stability expected with the 777X line. Workers would have received a $10,000 signing bonus if they approved the deal.

“We preserved something sacred by rejecting the Boeing proposal. We’ve held on to our pensions and that’s big. At a time when financial planners are talking about a ‘retirement crisis’ in America, we have preserved a tool that will help our members retire with more comfort and dignity,” Tom Wroblewski, District 751 president, said in a statement.

Political leaders, including many Democrats who are closely aligned with unionized workers, declined in recent days to influence machinists’ votes but asked them to consider the broader impact on jobs and future generations. Lawmakers in Washington state hurried through a massive extension of tax breaks — valued at nearly $9 billion — along with money to improve worker training and permitting programs.

Republican state Sen. Mike Hewitt said the dynamics at Boeing have changed over the years from a corporate structure filled with Washington residents to leaders who no longer have ties to the state.

“The thought processes are different than 10 or 12 years ago when Boeing was a Washington state company,” Hewitt said.

Michael Sullivan, a spokesman for the Utah governor’s Office of Economic Development, said Gov. Herbert received a call from Boeing officials Thursday afternoon and has begun preliminary discussions with Boeing leaders on the 777X line.

Boeing has had operations in Utah for 25 years, and is getting close to opening a new 850,000- square-foot factory in a Salt Lake City suburb. The company employs 575 people and is expecting to hire 100 more at the new West Jordan factory.

The long-range, twin-aisle 777 holds about 365 passengers, making it Boeing’s second-biggest plane. Since its first flight in 1994, it’s been a best-seller for Boeing, which has sold more 777s than any of its other current large planes.

In May, it began offering the revamped 777X. Boeing is still finalizing plans for the plane, but it has said it is expected to carry as many as 400 passengers and to be 20 percent more fuel efficient than the current 777.

Instead of the current all-aluminum wing, the 777X wing is expected to be made from composites, the same high-tech plastic that makes up most of Boeing’s new 787. Boeing is aiming to deliver the first 777X by the end of this decade.

The 777X is meant to compete with the new Airbus A350, which is undergoing flight testing now. It’s also going to compete with Boeing’s slightly larger 747-8 Intercontinental, which has seen sluggish sales even before the 777X has been formally launched.

 

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