Southern California had some good news yesterday — while the company announced plans to close a production plant in Long Beach, Boeing is moving 1,000 jobs from Washington state to Long Beach and Seal Beach in the next two years.
KPCC business reporter Wendy Lee says the jobs are in customer support, which gives technical and maintenance support for commercial planes like the next generation 737 and 747. Boeing's Southern California center currently has about 1,800 employees.
AM: So Boeing is adding these engineering jobs — but didn’t I read earlier this week that Boeing is closing a production plant in Long Beach?
Wendy Lee: That’s true. Boeing announced a while back it was shutting down its Long Beach production plant for C-17 Globemaster III. The military cargo jet wasn’t getting enough orders to keep production going. On Monday, Boeing said it would close the plant three months earlier than expected—by mid-2015. When the plant closes, roughly 2,000 Boeing employees in Southern California will lose their jobs.
AM: That should make Long Beach feel a little happier, right?
WL: Yes. In fact, Long Beach Mayor Bob Foster told me he was delighted. Plus, these jobs pay well. Boeing wouldn’t give me the salaries for customer support employees. But the Los Angeles County Economic Development Corporation says last year, the average wage for an aerospace engineer was roughly $121,000 a year. The LAEDC says there were roughly 5,000 aerospace engineers last year in L.A. County and the concentration is more than double that of the nation as a whole.
AM: Sounds like that could lead to some competition. Who is likely to go after the Boeing customer support jobs?
WL: Boeing is also interested in hiring engineering graduates from SoCal universities. The customer support workers in Washington state can apply for the California jobs, as well as C-17 workers. So all these jobs won't necessarily go to only locals
Southern California's gain is Washington's loss
To talk about what this means for Boeing employees up in Washington state, and what this move says about the future of the company, we're joined by Carolyn Adolph, economy reporter for KUOW public radio in Seattle.
AM: How much of a blow is this to the Puget Sound, and what's been the initial react?
Carolyn Adolph: A thousand jobs isn’t a large blow to the Puget Sound, but of course the initial reaction is one of horror. There’s a concern this is retaliation against the local engineers union. There’s a fear about what it means to see Boeing actively investing in Southern California. But Boeing is trying to reassure that all it is doing is assigning clear roles to each of its three design centers. And Southern California is a big winner here because the focus is on engineering jobs which are high value and highly paid.
AM: How has Boeing explained why they are moving these jobs?
CA: Boeing says it wants to focus the mission of each of its three design centers. So Puget Sound will be about developing new commercial airplanes and composite wings. South Carolina will be about composite fuselages for 787s. And SoCal will be all about customer support. The secret message embedded in this is that Boeing knows Long Beach is flagging. It’s the end of the c-17 production. And so So-Cal needs a change of vocation.
What’s happening is that SoCal is being kept going because Boeing will not leave behind the old McDonnell-Douglas talent. It wants to keep have access to the high quality pool of engineers being produced in California. That’s a compliment to the universities, and it’s a recognition that many of CalTech’s finest do not crave 10 damp months a year, every year without fail. And Boeing wants to spread its risks by not having everything in the Puget Sound basket.
AM: Long Beach is gaining engineering jobs and losing production jobs. Does that mean in Washington you're seeing the reverse?
CA: Well, we’re losing 1,000 engineering jobs. But we still have over 80-thousand Boeing jobs overall, and we got the 777X that California couldn’t have. So it’s hard to stand around protesting for too long.
AM: What do these moves say more broadly about the health and direction of Boeing?
CA: Boeing says it is doing this because it believes it’s part of a successful growth strategy. It is living a dream right now, with airlines in Asia and the Middle East bulking up their fleets at a rate so fast people wonder if this is an aerospace bubble. It’s a great time for this company, and it is making big plans for the future.