Published April 2004

EDC focuses on supporting local aerospace firms,
luring others here

The race, it turns out, was closer than we thought. Even the Boeing Co.’s own 7E7 location team didn’t know for sure where 7E7 final assembly would go until the company’s board of directors made its December decision. Opinions on the Boeing site selection team itself fluctuated over time. Members favored one site, then another.

In the end, of course, it was the Washington state team — which included everyone from the Governor’s Office and legislators to the city of Everett, Port of Everett and the EDC — that won, and for reasons that provide lessons for us all going forward.

According to feedback we’re just now receiving, Washington state was selected for fundamental reasons, the very same characteristics that make a business or a person successful. Washington state was responsive. The Washington state delegation went the second mile to get information and to research options. If Washington state couldn’t meet a Boeing requirement, the delegation clearly explained why and offered alternatives.

Most importantly of all, Washington state made a critical decision. We would not compete against other sites for the 7E7. Instead, we would figure out how we could best help Boeing compete against rival Airbus. That focus changed everything.

“We knew we couldn’t hand out piles of cash, like some others,” said Martha Choe of the Governor’s Office, who led day-to-day negotiations with Boeing. “We didn’t have it. And it wouldn’t have been right.”

So the Washington state delegation and legislators got creative, reforming state policies and some of the tax inequities that had hampered our state’s ability to compete for and retain jobs. But instead of creating changes and legislation that would benefit primarily Boeing, Washington state structured the improvements in ways that would benefit the region’s entire aerospace industry — hundreds of firms throughout the state — if Boeing decided to build the 7E7 in Washington state. Because, as we suspected, the 7E7 is just the beginning.

There is both additional opportunity and risk ahead. Once again, it is up to all of us, working together, to tip the scales toward opportunity.

Signaling the way the aerospace industry will be structured in the future, the 7E7 program has restructured its relationships with its suppliers. It will interact directly only with a few suppliers, known as Tier 1 suppliers. Those suppliers most likely will turn to their own supply chain for the materials, parts and services they need to complete their higher-end assemblies. The result could be that fewer manufacturing jobs de facto go to the state’s 500 aerospace suppliers, many of whom are used to working directly with Boeing. Now these same suppliers must forge relationships with the Tier 1 suppliers, winning business they may earlier have considered theirs by default.

This change in how commercial jetliners will be made offers Snohomish County exciting opportunities: one, to convince Boeing’s Tier 1 suppliers that proximity to the 7E7 headquarters benefits them and their employees, and, two, to help the state’s current aerospace companies move seamlessly to the new way of doing business.

The EDC’s involvement in both has the same purpose: to protect our current aerospace jobs and create the conditions that encourage Snohomish County’s emergence as the true center of aerospace innovation in the years ahead. The result: a stronger, more resilient and more prosperous local economy.

With the help of former Boeing executive John Monroe, the EDC of Snohomish County, the county’s business support organizations and Snohomish County have created initiatives to accomplish these goals. Using much of the same information that was developed during the 7E7 campaign, we have developed outreach programs to encourage 7E7 suppliers to locate in Snohomish County and to give our region’s aerospace companies, including Snohomish County’s 60 aerospace firms, opportunities to present their capabilities to Tier 1 suppliers.

To take Snohomish County’s message directly to our targets, the EDC will market and promote the county at aerospace trade shows both here and across the country. We are directly approaching Tier 1 suppliers to make sure they know that the same advantages Boeing saw here are available to them as well:

• Availability of skilled technical, production and administrative workers.
• Availability of existing office, warehouse and light-manufacturing facilities, and ease of permitting for new and updated facilities.
• Tax advantages for performing design and build for all commercial airplane products within the state.
• Qualification for state economic development programs and incentives in addition to the specific tax programs.

The race to secure Snohomish County’s future as a center for aerospace excellence, it is clear, continues. We have no choice. Our aerospace companies deserve no less.

Deborah Knutson is president of the Snohomish County Economic Development Council. She can be reached at 425-743-4567 or by e-mail to dknutson@snoedc.org.

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