Published July 2003

BIDDING FOR 7E7
Regional leaders hope state’s
Boeing package prevails

Illustration courtesy of the Boeing Co. At least 16 other states besides Washington have expressed interest — and prepared proposals — to land the 7E7, Boeing’s next-generation airliner, but Snohomish County officials said they are confident Everett will make the cut.

By John Wolcott
SCBJ Editor

If Boeing executives choose their 747, 767 and 777 production plant in Everett for assembly of the company’s proposed 7E7 airliner, it will provide a major boost for the Snohomish County economy.

A Kirkland consultant estimates the 7E7 program would mean not only 800 to 1,200 initial aerospace jobs at the plant, but perhaps a couple thousand more jobs by 2008 when the plane begins service, as many as 3,500 related aerospace jobs and a payroll of $600 million that would impact up to 13,000 people who provide goods and services.

That combination of direct and indirect spending could mean an additional $1.2 billion for the local economy, according to consultant Robert Chase, who said the estimate doesn’t include new jobs to be added by local parts suppliers or shipping companies.

It doesn’t matter if Chase’s projections are off by a few thousand jobs or a few hundreds of millions of dollars. Any way you look at it, it’s clear that the impact of adding a fourth airliner to the Everett plant would have an economic impact of great magnitude for decades to come.

After all, the 747 jumbo jet first produced at the plant in the mid-1960s is still selling; the 767 has a new multi-decade role as an aerial tanker; and the 777 has already proven to be one of the most popular Boeing airliners of all time. With its dramatic fuel efficiency, passenger comfort and long-range, the 7E7 Dreamliner appears destined for its own multi-decade life span.

But the tremendous economic impact of the 7E7 program could end up benefiting some other community instead of Everett.

The excitement over the new airliner has set off a competing frenzy nationwide, ever since Boeing asked for proposals. So far, officials in 16 other states have said publicly that they were preparing bids to land the plant: Alabama, Arizona, Arkansas, California, Florida, Georgia, Illinois, Indiana, Michigan, Missouri, New Mexico, North Carolina, Ohio, South Carolina, Texas and Wisconsin.

That’s why Everett, Snohomish County, Puget Sound and Washington state public officials, corporate leaders and economic development supporters have been working so hard to ensure the 7E7 will be built here.

Among those at the forefront of the state’s 7E7 campaign is the Snohomish County Economic Development Council, led by President Deborah Knutson, an experienced executive previously with the King County Economic Development Council, and board Chairman Mike Deller, president of EverTrust bank and a former Port of Everett manager.

In a recent interview with Knutson and Deller, both expressed their pride in the community response to preparing the county’s part of the proposal to Boeing. Both are sure Everett will be on the short list after a Boeing consulting firm weeds out the lesser contenders.

“We’re very confident of making the first cut in this site competition,” Knutson said, “and the last cut, too.”

Deller noted that local and state attitudes have changed greatly over the past few months, from a belief that the site is “ours to lose” to the realization that the 7E7 could be built elsewhere. Then the thought that there was no way the governor, legislature and business communities could ever get together to create a winning offer to Boeing.

“Everyone had to take a serious look at tax breaks, transportation funding and incentives that would convince Boeing to invest here. I think this whole thing that has come down ... is amazing. I think we have what looks like a very good package that will be very hard to beat,” Deller said.

Indeed, Gov. Gary Locke declared winning final assembly of the 7E7 to be “Job One” for Washington, saying it is essential to the state’s long-term economic health to have the next generation of Boeing airplanes built here.

During the recently concluded special session, the state Legislature approved:

• Tax breaks worth $400 million over the next six years for Boeing.
• Reductions in unemployment insurance of $200 million a year for all businesses including Boeing.
• A new 5-cent-a-gallon gasoline tax for construction work to ease gridlock on the freeways.
• More than $15 million to pay for a new Port of Everett pier to speed the delivery of aircraft parts through the waterfront.

In addition, state and local officials, labor unions, Puget Sound area economic development councils and a coalition of Western Washington companies who supply parts to Boeing all have organized efforts to persuade the company to build the new plane here.

“Actually, the EDC started working on regional economic development efforts a couple of years ago when we first heard about Boeing planning for the Sonic Cruiser project. That got our regional cooperation started,” Deller said. “Now the 7E7 competition has really gotten the area working together. People in Puget Sound are realizing that the economy doesn’t stop at political boundaries. Boeing is the number-one employer for all the counties of Puget Sound and beyond.”

Deller contrasted the years of separatist attitudes about economic development to the coalitions formed for the 7E7 campaign by referring to the recent EDC quarterly meeting in Everett .

“There, we had the head of Boeing’s 7E7 program — Mike Bair — talking to a standing-room-only audience of supporters,” Deller said.

Those supporters included representatives from Washington state; Snohomish, King and Pierce counties; Puget Sound cities; the Tulalip Tribes, the Port of Everett; and regional chambers of commerce. There also were educators, labor leaders and Boeing suppliers.

Knutson cautioned that the state’s package might not have all the incentives and attractions of some other states or as much in the dollar column, but she said that’s “because their big packages have to cover infrastructure and things they don’t have and we do. ... We have the Boeing plant, the runways and other facilities already in place.”

Deller agreed, noting that when all the proposals are compared, the Washington state proposal will point out the value of having a trained aerospace work force and capital facilities in place, plus the value of the state’s incentive package itself.

“Also, there are some valuable intangibles, such as a community college system for labor training and programs for developing advanced composites systems that Boeing is interested in,” Deller said.

And, what happens if the 7E7 program goes elsewhere? Neither Deller nor Knutson wanted to focus for long on that possibility, noting that the results would be obvious.

“The best social service program is, and always has been, jobs,” Deller said. “Without jobs I’d worry about the effects of a flattened economy. If you have a declining aerospace sector you also have a declining tax base, which means declining education and social service programs and community amenities. You don’t have a vibrant place to live and work and play.”

He said he understands some of the criticisms of the Legislature’s tax package for Boeing and the promotion of the 7E7 program by “big business,” but he thinks people need to realize “the little guys die if they don’t have the big guy. ... Maybe you’re not selling rivets to Boeing, but you could be a grocer selling food to the people who sell the rivets.”

The EDC, public officials and economic development groups are working to create communities of excellence that will help everyone, Deller said.

“When you save high-paying jobs, you preserve a solid tax base that provides for services, police protection and care for the elderly as well as life’s amenities,” Deller said.

Related: Global team behind design of 7E7
Related: Regional leaders speak out on 7E7
Related: Boeing forecasts future growth in air travel
Related: EDC "venture capitalist" for county economy

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