Virgin on Business: Let the Game Begin!


Are you ready for another round of What Does Boeing Want This Time to Stay Here?

You’re not? You don’t feel like playing? Too bad. So sorry. It’s already started.

That collective, audible groan you just heard was from workers, labor union leaders, politicians, government officials, suppliers, taxpayers — in other words, just about everyone — whose bruises haven’t faded from the last go-round over some major Boeing project that, insufficiently plied with incentives and goodies, would trundle off to South Carolina or Utah or some other state not named Washington.

“Please,” the region-wide lament rings out over hill and valley. “We know this stuff matters. We know we need to pay attention to it. But we just got over a huge fight on the 777X. The 737 program is humming along with production rate increases. Labor contracts aren’t up for negotiation right now. Can’t we have a respite, a little down time to divert our thoughts and energies to something less consequential — like the Seahawks and Mariners?”

Well, no, you can’t, because Boeing has already started the clock running on yet another season of What to Get the Aerospace Company that Seemingly Has Everything.

At a conference in Abu Dhabi last November, Boeing CEO Jim McNerney announced that the company plans to have a successor to the 737 Max by 2030.

“Phew,” you might be sighing in relief. “We thought you said this was an imminent threat. You’re talking about a replacement for a plane that hasn’t even started flying yet. 2030? That’s, like, in another two decades. Let’s talk sports.”

No, let’s talk Boeing and where it builds planes. Yes, 2030 sounds like a long time away. It’s not. It’s just 15 years, which isn’t that long to start with, and it’s even shorter when taking in the lead times needed for development of an entirely new airliner program.

To illustrate, let’s use the timeline of the last entirely new airplane program, the 787. Boeing established that program in 2003, the board approved it in 2004, firm configuration was set in 2005, rollout of the first plane occurred in 2007 and first deliveries were set for 2008. Of course, Boeing came in just a teensy bit late on that last target, but the delays are actually not relevant to the discussion. What is relevant is that five-year time frame from program formation to planned first deliveries.

Suddenly, that 15-year window has shrunk by a third, to 10 years. And it may close even sooner than that. To judge from McNerney’s comments, some thought has already been given to what this new plane will look like: It’ll be slightly bigger than the 737 Max, with new engines and a composite-based fuselage.

Even if it’s not a radical departure from conventional design or construction, coming up with a new plane takes time. A lot of questions have to be answered and decisions made. How many seats? What’s the competition likely to do? Is purchase cost or operating cost the most important consideration? What markets and customers are we aiming for? And, most pertinent to this region, where are we going to build this thing?

Until the 787, that was an issue of where in the Puget Sound region would it be built. Now it’s where in the world. And Boeing isn’t going to wait until the first plane starts moving down the line to make that call. Aircraft assembly plants, like aircraft, take time to design, permit, build and test.

If this state thinks the answer should be Renton, Everett or some other Washington location, that means unpacking and revisiting all those awkward and uncomfortable issues, starting with whether we want to remain a center of aerospace production. If so, at what cost? Can we keep Boeing without the usual offerings? If not, what should we offer? Should we tie any incentives to guarantees that Boeing won’t move more stuff and people from here?

If the region thinks this is an issue that matters, it would be well advised to resume arguing the details starting yesterday, rather than when it’s crisis time or too late. If it doesn’t, go back to watching whatever game is on at the moment, and check back in 2030 to see how well that approach worked out. 

Monthly columnist Bill Virgin is the founder and owner of Northwest Newsletter Group, which publishes Washington Manufacturing Alert and Pacific Northwest Rail News.

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