The President’s Pen is a weekly blog written by Jonathan Smith, New Vision’s President and CEO about local economic development projects and initiatives. It also covers economic trends, workforce issues, business climate policies, and manufacturing news.
Yesterday Boeing announced its intention to keep producing its 737 planes in Washington State. These planes are currently produced in Renton but there is so much demand for the 737 that the company must ramp up production at least another 25 percent to satisfy customers. Boeing also plans to develop a new more efficient engine for these planes. Increasing demand and redesign issues made it less than certain Boeing would keep making this plane in Washington. As a result of the company's uncertainty other states were literally circling in the water with dazzling incentives and offers to move 737 production to their areas.
At the end of the day though several key factors fell in favor of keeping the 737 in Washington State. Working towards a favorable agreement with the International Association of Machinists (IAM) was the biggest issue. IAM and Boeing announced a tentative deal to extend their contract ten months ahead of schedule. This accord is huge as one of Boeing's big gripes was with IAM surrounding the strike and related challenge they had getting a contract approved a few years ago. Another factor in Washington's favor was that Boeing already enjoys a huge and talented workforce here. Relocating this production would challenge other states to deliver the talent Boeing needs and put the company at risk in terms of ramping up production.
The state legislature must also take action to help Boeing. To develop a future pipeline of aerospace workers, the state is working on a $10 million package of investments that include creation of a new aerospace curriculum at 12 high schools, a new science and mathematics problem-solving course at 10 high schools and a $7.6 million program to enhance engineering education at the University of Washington and Washington State University. The governor is also asking legislators to put $1.5 million towards a new Center for Aerospace Technology Innovation at UW and WSU. On top of these workforce and education investments the legislature will also be working to resolve regulatory and transportation issues of import to Boeing.
Boeing and its suppliers are located in almost every county in the State - it is no surprise this is one of Washington's most important industries. In our Valley, both GE Aviation and Pexco are key Boeing suppliers. These companies employ over 400 well compensated people at their local facilities.
Boeing's 737 decision also helped drive key elected officials to focus on our state's business climate. We are still not perfect, but the state has taken measurable steps to improve conditions for businesses thanks to Boeing. Let's celebrate Boeing's decision to double down in Washington State but also take care to not grow complacent as a result. More efforts are needed to improve our business climate so when the party is over let's all get back to work and create conditions that help our state's key companies and industries thrive.