Tuesday is the deadline Boeing has given states for proposals to build a manufacturing plant for the next generation of its 777 jetliner, and more than a dozen states — including California — are offering incentives to bring the project and its skilled manufacturing jobs to their states.
In California, the city of Long Beach has been very aggressive in making sure the state makes its case for the Boeing 777X to replace jobs it will lose in 2015 when the C-17 ceases production. Long Beach City Councilman and Vice Mayor Robert Garcia said Gov. Jerry Brown is taking a leadership role in the effort.
"He, along with our mayor, [is] putting our best foot forward in putting together what we think will be a competitive proposal," Garcia told KPCC. But California is keeping details of its proposal and communications with Boeing under wraps.
In Missouri, the legislature passed an incentive package last week valued at up to $1.7 billion over more than two decades. Other states are said to be making competing bids for a facility that would make all — or a part of the jetliner — including Alabama, Utah, Texas, North Carolina, South Carolina, Pennsylvania and Washington, where the current 777 is made.
Last month, Washington state lawmakers approved nearly $9 billion of tax breaks for the 777X. A few days later, though, members of the International Association of Machinists (IAM) union local rejected Boeing's proposed contract for the 777X because it would have replaced their traditional pension with a defined-contribution savings plan. That move prompted Boeing to open the bidding from other states.
“The California Governor’s Office of Business and Economic Development maintains a strong relationship with Boeing, and we are actively working to expand all facets of their operation in California,” said Brook Taylor, spokesman for the governor’s Office of Business and Economic Development in an emailed statement. A source inside the office said it will submit a very competitive proposal to Boeing on Tuesday.
Councilman Garcia and others in Long Beach said that the city already has the workforce and infrastructure Boeing is looking for, plus port access and already developed relationships with material suppliers.
“Most of the customers for the new 777X have expressed that they want a workforce that is experienced, and I can’t think of a workforce more experienced than the one here in Long Beach,” said Stan Klemchuk, president of the United Aerospace Workers Local 148, which represents workers at Boeing's C-17 plant in Long Beach.
Many of the workers at that plant have been building that cargo plane for more than two decades. In September, however, Boeing announced that it would cease production of the C-17 in 2015.
“Long Beach seems like one of the stranger alternatives to be considered," said Richard Aboulafia, an aerospace analyst with the Teal Group, in Fairfax, Va. "On the one hand you do have a skilled workforce that has built both commercial and military jets for years. On the other hand, it’s dwindling, and frankly, by the time the 777X enters production, it’s going to be rather old,” Aboulafia said. He added that if Boeing's managers are looking for a friendlier union climate than they face in Washington state, they won't find it in California.
“The idea that this management team would go to another place, find a different union, and all of a sudden everything would be well in the world is a complete fantasy,” Aboulafia said. He gives the advantage to the "right-to-work" locations in the running, particularly Charleston, S.C.
But Stan Klemchuk of the United Aerospace Workers Union says there are already provisions in its current contract with Boeing that should please the Chicago-based aerospace company, including an agreement that new hires won't get a pension.
“My heart goes out to the brothers and sisters of IAM up in Seattle, but we believe that this is an opportunity," Klemchuk said. "If Boeing decides to move it, we want that work.”
Aboulafia said it's likely that after the bids pour in from the states, Boeing and the machinist union locals will return to the negotiating table and reach a deal.
"There's one possibility that management doesn't see the big advantage of building a derivative aircraft like the 777X in its current site, in which case they should consider a different line of work," said Aboulafia. "Or alternatively, they do see the advantage, but they've just chosen to be extremely and undiplomatically aggressive, and I really don't know which is worse."