With the state budget stretched tight, Gov. Jay Inslee is hardly in a position to offer Boeing big new tax breaks to secure local jobs in building the company’s next updated plane, the 777X.
But the governor and his advisers said Thursday they will review existing tax breaks for airplane manufacturing and prioritize transportation improvements and the training of aerospace workers.
Alex Pietsch, director of the Governor’s Aerospace Office, said it’s even possible the state could fund the training of Boeing workers before employment, as is done in South Carolina.
Other proposals outlined Thursday include streamlining the local permitting process in Everett, and funding a new cargo facility at the Port of Everett.
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The 777X “game plan,” along with a broader strategy document on how to support the aerospace industry long-term, was released
as Inslee spoke at the Future of Flight aerospace center in Everett.
“This is a critical initiative for the future of the state,” Inslee said. “We have got to continue to compete aggressively.”
Inslee said he talked with Boeing Commercial Airplanes Chief Executive Ray Conner Thursday morning and briefed him on what he’d be making public. But Inslee said Boeing isn’t yet ready to lay out any specific requests for the state.
“We are going to be talking with Boeing at some point,” he said. “We have done things in the past. We will be amenable to talking with them again.”
Indeed, Inslee’s initiative follows a series of such campaigns, starting 10 years ago when the state gave Boeing more than $3 billion in tax breaks over 20 years to secure 787 final assembly in Everett.
In 2009, the state failed to persuade Boeing to build a second 787 assembly line in Everett — the jet maker instead chose South Carolina. But two years later Washington mounted successful efforts to win the Air Force tanker and then the 737 MAX.
For the current effort, one potential option is to extend the current incentives.
The 777X would be built for many years after the 2003 tax break are set to expire in 2024.
Boeing’s 777X is the next version of its star widebody 777 jet. It will feature new GE engines and a new wing made from carbon-fiber-reinforced plastic composite.
The Boeing board at its board meeting in Chicago last week approved offering the 777X for sale.
The summary of Inslee’s 777X plan notes that because the current, all-metal 777 is designed and built in Everett, that plant “is the obvious choice to design and build the 777X.”
Still, Inslee and Pietsch aren’t taking for granted that local workers will do the design and final assembly of the jet.
And they also want something more: a new composites facility to fabricate the wing. Doing that work here, Inslee said, would ensure that Washington is where “cutting-edge manufacturing technologies are developed.”
The wingspan of the proposed 777X, at around 233 feet, will make it the largest wing Boeing builds. It is expected to feature folding wingtips so that it will fit at airport gates.
Inslee’s predecessor, Chris Gregoire, also championed transportation and training initiatives aimed at Boeing.
Pietsch suggested that this time around Washington may even emulate South Carolina, where the state pays for pre-employment training of new Boeing hires in a local technical college before they ever enter the Boeing plant.
“That’s certainly something we’ll be exploring over the coming months. I wouldn’t be surprised at something like that or at least a training program specific to composite wing fabrication,” said Pietsch. “We want to make sure the workforce in Washington is equipped and armed to build that wing when the time comes.”
Inslee also is creating an interagency task force, headed by Everett Mayor Ray Stephanson, to streamline the permitting process for any needed 777X-related facilities or infrastructure.
Boeing designs and builds all its widebody jets — 747s, 767s, 787s and 777s — in Everett.
In an interview, Stephanson said he’s had regular meeting with Everett site planners and he believes that any expansion needed for 777X “would fit on the current manufacturing site.”
He also pointed to a lightly wooded area on the west side of the Paine Field runway as another potential site for, say, a composite wing facility.
Inslee’s 777X plan includes highway improvements on I-5 between Everett and Marysville, and at key points on I-405 and SR167.
He will also push to secure state funding for a roll-on/roll-off facility at the Port of Everett, so that tractor trailers or forklifts could efficiently unload aerospace parts.
The state will commission an analysis of the economic benefits the new jet will bring and update an Accenture survey of the competitive landscape that was produced in 2011 for the successful push to secure the 737 MAX for Washington.
With a formal 777X launch and a commitment to produce the plane expected within months, the state has limited time to complete its analyses and get firm legislative proposals on the table.
In addition to the proposals geared specifically at winning the 777X for Washington, Inslee released a 30-page document outlining a broad strategy to promote the aerospace industry in the state.
“We’re thinking long-term,” Inslee said, “Not just for 777X but for the replacement of the 737.”
In the next two years, the state intends to prioritize its wooing of Boeing suppliers, including at the Paris Air Show in June, and to extend airplane manufacturer tax breaks to also cover aircraft maintenance facilities.
It will seek siting of a federal unmanned aerial vehicle test site in central Washington and of a center for studying the use of alternative jet fuels at Washington State University.
The city of Renton is tagged to push for the establishment of a “multi-institutional, multilevel aerospace training center.”
And the state’s trade office, which recently sent a trade mission to the United Arab Emirates, is tasked with developing economic ties with that country as it develops an aerospace manufacturing capability.
Dubai-based airline Emirates is the likely launch customer for 777X.
Washington is home to 175 aerospace manufacturers besides Boeing, though the corporate giant accounts for about 86,000 of the 92,000 people employed in the industry here, according to data laid out in the state strategy document.
Counting related industry suppliers creates a cluster of 1,250 companies that collectively employ more than 131,000 people and pay out more than $10 billion in annual wages, or about 7.5 percent of the state’s total.
Maud Daudon, chief executive of the Seattle Metropolitan Chamber of Commerce and vice president of the Washington Aerospace Partnership, who spoke after Inslee, said the state needs to send Boeing a signal that it is serious.
“We are the envy of the nation for those jobs,” Daudon said. “We’ve got to hang onto them.”
Dominic Gates: (206) 464-2963 or email@example.com