Boeing told employees Thursday it will transfer 1,000 more engineering jobs from the Puget Sound area to Southern California by the end of next year.
The move, rumored for months, is the latest in a series of engineering transfers out of state that now totals more than 4,300 Boeing jobs.
In the latest blow, most of the engineering group that provides technical support to airlines flying Boeing jets will move to Seal Beach and Long Beach.
Even the operations center in Tukwila, where a team is on call 24/7 to respond to any technical issue with a Boeing airplane anywhere in the world, will move to California.
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There may be further job losses among administrative staff that support the engineers whose work is moving.
In an interview before the Thursday morning announcement, Mike Delaney, the head of engineering at Boeing Commercial Airplanes, said the company is shaping distinct future engineering roles for its design centers in Washington state, Southern California and South Carolina.
He said engineers here will focus on developing new airplanes and building them efficiently, with the 777X project providing a new opportunity “to become a true world-class composite center for advanced manufacturing and design.”
Although support of Boeing’s airline customers is “a crown jewel” of the company, it’s not part of the central mission of the engineering role here, he said.
Delaney said that in California, Boeing can tap a large pool of aviation-engineering talent.
And he said moving the customer-support group from the Puget Sound region will give it “much greater focus,” and will “declutter all the things we have to do up here.”
However, some employees said the move seems intended to nudge out older, higher-paid workers and at the same time weaken the engineering union. They questioned how Boeing’s decision fits with the $9 billion in tax breaks the company obtained from the state last year.
The engineers in the customer-support group work to maintain aircraft that are already in service with airlines.
They write and update technical manuals and in-service bulletins. They address maintenance issues, consult on the need for spare parts and, if necessary, send out teams to fix technical problems.
Also, on behalf of the Federal Aviation Administration, they attest to the airworthiness of any modifications made to a jet.
The local group is about 1,600 engineering staff, the majority based in two office towers in Tukwila and the rest mostly in Everett.
Current employees, many of them veterans of more than 20 years at Boeing, won’t automatically transfer to California if they wish to move. They’ll have to apply for the jobs there once they are posted.
Those who move will get relocation expenses.
“We want as many as possible to consider coming down” to California, said Lynne Thompson, vice president of the customer-support group. “Other people will find work in other places, either inside of Boeing or outside.”
The only customer-support engineers remaining here will be those supporting the newest in-service jet, the 787 Dreamliner.
Sometime around 2015, the 787 support work is expected to be routine enough that it, too, will move down to California. The small group left here will then focus on the next new planes, the 737 MAX and the 777X, Thompson said.
“A growth strategy”
The recent drain of Boeing engineering jobs from Washington comes amid
boom times in the aviation business
Last year saw record commercial-jet orders and deliveries. Airplane production in Renton and Everett, already at all-time highs, is set to climb sharply.
And Boeing in January committed to build the 777X here, an investment of between $7 billion and $10 billion.
That follows other recently launched new jet programs: the 737 MAX and the 787-10. In addition, the Air Force tanker is under development in Everett.
The company estimates the 777X project alone will require a dedicated local team of 850 engineers.
That prospect means a growing need from 2018 forward for the engineers who design new planes.
Delaney said Boeing’s investments and its commitment to building new airplanes here show the company’s approach to the region “is clearly a growth strategy.”
The real significance of that 777X win, he said, is the increased scope of future engineering work here, because the methods of fabricating a composite wing so intimately affect how the wing is designed.
In the future, Delaney said, “We’ll fundamentally do research and development around wing fabrication here in Puget Sound.”
He said North Charleston, S.C., will focus on composite fuselage technology.
And Southern California gets the aftermarket work.
the customer-support engineers will still interact with the design engineers up here.
“They’ll just be doing it from California,” Delaney said.
Ray Goforth, executive director of the Society for Professional Engineering Employees in Aerospace (SPEEA), rejected the logic of this division, saying it makes more sense to have customer-support engineers near the engineers who designed the airplane.
“Cluttering isn’t a problem anyone else had noticed,” said Goforth.
The engineering union’s leader also questioned what Washington is getting for the almost $9 billion in extended tax breaks the state granted Boeing to win the 777X.
“SPEEA specifically warned Gov. Inslee that his legislation was crafted with loopholes that would allow Boeing to take the $9 billion and outsource jobs anyway,” Goforth said. “Why doesn’t the governor call a special session to close the loopholes and save these jobs?”
Inslee said Boeing’s decision is “obviously disappointing” but added that he welcomed hearing Boeing “reiterate its commitment today to keeping a robust core of engineering work here.”
Alex Pietsch, who heads the governor’s aerospace office, said that Gov. Inslee discussed imposing some kind of job quota during the 777X negotiations last year but that was unacceptable to Boeing. Pietsch said the state settled for the best agreement it could get.
He said Boeing is continuing to invest heavily in the state — this month embarking on a big expansion in Everett for the 777X — and employs more than 81,000 people here.
After the work transfers, he said, Washington will still retain Boeing’s “most significant engineering.”
Stream of job transfers
Thursday’s announcement, Boeing already had earmarked a long
list of white-collar jobs
to move out of the Puget Sound region: t
he local IT engineering work; pilot training; support for out-of-production airplanes; modifications and conversions of passenger jets to freighters; work on advanced airplane concepts; and, most recently, the company’s research-and-technology unit.
Meanwhile, the local customer-support engineering group whose future was detailed Thursday had already dwindled considerably through attrition.
“We haven’t hired anyone in my organization in two years,” said one engineer in the group who asked to be unnamed because Boeing doesn’t permit employees to discuss internal matters. “We used to occupy two floors of this building. Now we have half of one floor.
“Everyone I know is looking for a job,” he said. “Morale is the worst I’ve ever seen.”
He added that response times for customer projects have been “moving out longer and longer because we don’t have the resources.”
Thompson, the VP of the customer-support group, said she deliberately let the local staffing level fall because she knew this move was coming. But she denied any impact on the level of customer support.
She said the plan in Southern California is to set up a new 24/7 operations center with the various support teams arranged around it.
“It will deliver a superior customer experience,” Thompson said.
The first step in the migration, she said, will be to hire new people in California “in order to do the knowledge transfer to that team down there.”
After the third quarter, the move of people from here will begin, and the process will complete next year.
Warning during talks
Many engineers in the customer-support
unit are convinced that Boeing is trying to get rid of older, more expensive veterans in favor of hiring younger people in California.
Some also suspect an anti-union motivation, because the company’s engineering facilities in Seal Beach and Long Beach are not unionized.
During contract talks with SPEEA in fall 2012, Delaney warned publicly that an expensive union contract would lead to job transfers out of state.
In the interview, he denied any connection between the subsequent work transfers and that warning.
He said he devised the strategy of geographic diversification much earlier, soon after taking his current position in January 2010.
Delaney also denied any age discrimination.
“That is a fabrication by people trying to rationalize the situation they are in,” he said.
“Our worry is the opposite,” Delaney said. “If we do not take action, our large group of baby boomers will retire and we won’t have replenished the organization.”
He said competition from Airbus is “fiercer than it’s ever been,” so Boeing management has to be “absolutely fanatical about driving down unit costs.”
Nevertheless, he said, management recognizes that all the major problems with the 787 — including the early flaw found in the join between the wing and fuselage; the repeated issues with the power-generation system; and the overheating batteries — were solved not by the partners that built the affected structure or supplied the faulty parts, but by Boeing’s own engineers.
“There are many parts of this business that are experience-based,” Delaney said.
He said roughly a third of the company’s engineers are in Washington state.
Delaney declined to say whether more transfers are in the works.
“We study everything,” he said. “We make strategic decisions when the time is right.”
At a discussion of the future of aerospace engineering at Seattle’s Museum of Flight Tuesday night, attended by a contingent of veteran Boeing engineers, a common theme among speakers on the panel was that small groups of engineers working closely together provide the best hope of innovation and efficient airplane development.
There was a consensus that attempts to collaborate across geographic and organizational boundaries have not worked well.
Yet Boeing is choosing now to disperse engineering resources that for so long were concentrated here.
Delaney said Boeing cannot do things today the way they were done more than 40 years ago when it developed the first 747. Airplanes and production systems are more complex now, he said.
“People pine for the days that no longer exist,” Delaney added.
Dominic Gates: (206) 464-2963 or email@example.com