After Boeing announced its decision to consolidate 787 production in Charleston, South Carolina, public officials here expressed a variety of views. Notably, Gov. Inslee s called for a “hard look” at the company’s tax treatment. We agreed with others that raising taxes on the industry would be counterproductive.
But there’s more to the story. A sharp analysis by Scott Hamilton, one of the nation’s leading aerospace analysts, takes a look at how state leaders have responded, traces some of the company’s recent history with state leaders, and … most important … looks ahead to the company’s future in the state. It’s a pointed, insightful, and must-read critique. (Credit to the Washington Research Council for first posting on the piece.)
With the announcement last Thursday by Boeing it will consolidate 787 production from Everett into Charleston, local political leaders were disappointed but understanding and even sympathetic.
Snohomish County Executive Dave Somers and Everett Mayor Cassie Franklin likened Boeing to a family member who was in crisis. Hard decisions by Boeing were made, but in a crisis, you must. Support your family. Understand the situation. Figure out how to make the best of it to move forward.
On the other hand, Gov. Jay Inslee vowed to review the state’s relationship with Boeing and tax breaks granted to the company. Inslee claimed understanding but his tone was hostile, defiant and angry.
Getting to the essential point, Hamilton reviews the company’s options. We encourage you to review the analysis for yourself. Here’s the crux: Boeing has choices.
LNA analyzed the pros and cons of moving some or all the three lines from Renton to Everett to fill the vacuous space that will be left when the 787 and 747-8 FALs disappear. We agree that moving the lines out of state isn’t worth the trouble and cost, however. But that’s not to say it couldn’t be done.
There are lots of obstacles, challenges and considerations to moving 737 or 777 production. But myopically, Inslee overlooked several other possibilities Boeing has.
There is nothing stopping Boeing from moving engineering jobs out of state. It’s been doing that. It can continue to do so.
Boeing could relocate its facilities at Moses Lake out of state.
What’s to say Boeing doesn’t relocate Insitsu, its UAV company in Bingen (WA), across the Columbia River to Oregon or elsewhere?
Given recent news, this sound prescient.
More to the point, who says the headquarters for Boeing Commercial Airplanes must remain in Renton at its huge Longacres campus? Administration and sales don’t have to be in Puget Sound.
The more important point for state leaders, however, is that there are also significant opportunities for expansion in the Puget Sound region.
Mayor Franklin and Executive Somers got it right. The real point is preparing for the future, not whining about the past. Inslee needs to focus on how Washington State can win the Next Boeing Airplanes.
Boeing needs two new airplanes for the 2030 decade. The pressing need is a replacement for the 737-9 and 737-10. These two airplanes do what they do very well, but there are inferior to the A321neo family. The strength of the A321neo drives Airbus’ successful market share in the single-aisle sector to capture 55% or more.
Boeing needs a new airplane in the 190-250 seat sector, and it needs it badly.
The company also needs a new airplane in the 125-189 seat sector to replace the highly niche 737-7 and the anchor 737-8 MAX. Embraer was going to be charged with this responsibility (in the 100-160 seat sector). This joint venture is off, however. So, it falls to Boeing to design this airplane, too.
Governor, this is your mission, should you be reelected. You need to be thinking how to win this business for Washington.
Right. Again, the whole piece is well worth your time.