As Boeing pares its list of possible sites to build the new 777X passenger jet, The Seattle Times sized up five contenders -- North Charleston; Everett, Wash.; Huntsville, Ala.; Long Beach, Calif.; and Salt Lake City.
The state has passed tax incentives for Boeing that no other can match. And in existing infrastructure, Everett, Wash., has just about everything on the wish list Boeing sent out to states nationwide that want to build its 777X jet. According to most industry experts, Everett ought to be a shoo-in.
Everett is missing only one item on Boeing’s list: An advanced manufacturing building in which to produce the 777X’s 114-foot-long, which will be made out of carbon-fiber-reinforced plastic composites. The company has explored the option of demolishing some of the older buildings just north of the current 787 and 777 assembly bays and putting a wing facility there on its existing property.
To maintain its workforce advantage, Washington state will offer Boeing free training of employees, as other states have done. The state’s Department of Commerce is setting up a program called Work Start that will offer “customized training in direct alignment with the state’s business recruitment and expansion efforts.”
Though much of Huntsville’s know-how is with rockets and missiles, locals are confident the skills will translate to passenger jets. The sheer number of defense contractors in Huntsville fuels keen demand for engineers. Some 600 Boeing engineers and other employees in Huntsville over the years have worked on development of the 787 Dreamliner.
Boeing already owns some 530 acres at or near the Huntsville airport. A Norfolk Southern rail spur links to the International Intermodal Center, a busy rail and highway cargo hub located less than two miles northeast of Boeing’s main facility. Huntsville’s main drawback may be its lack of a seaport, which Boeing lists as a “desired” feature and which was the reason Airbus chose to locate its first U.S. assembly factory on the other end of Alabama in Mobile, on the Gulf Coast.
Alabama has nearly exhausted the $750 million bond authority under which it has lured Airbus, Toyota and other companies with financial giveaways.
Long Beach, Calif.
This is the only U.S. location outside the Puget Sound area that has a long legacy of building big airliners. It still has a core of about 2,000 experienced, highly skilled airplane-manufacturing workers.
Long Beach has a long runway and a massive port that could take delivery of 777 fuselage sections from Japan. And Southern California has a deep, diversified pool of manufacturing suppliers. Gov. Jerry Brown can arrange fast-track permitting to ease Boeing’s way through the state regulatory bureaucracy. And when it comes to financial incentives for Boeing, Brown can wrap sales-tax exemptions and tax credits into California’s 777X bid worth hundreds of millions of dollars.
The state, however, has higher taxes than most states. Workers’ compensation costs and energy costs are among the highest in the nation. Complying with California’s environmental regulations can be expensive.
Boeing’s East Coast outpost is set to grow, with or without the 777X. The North Charleston factory is operating at full speed with three shifts. Boeing plans to add 2,000 workers here by 2020, for which South Carolina agreed to pony up $120 million, borrowed through bond sales.
But the South Carolina employees’ relative inexperience has been a costly headache for Boeing. The one final-assembly line in North Charleston is struggling to meet a previously set target of three jets a month. It has delivered just 12 planes so far this year, compared with 47 for the two 787 assembly lines in Everett.
For the 777X, the company has specified a direct rail spur to the plant as a must, and a nearby seaport as a preference. Charleston has a deep water harbor that leads to the Atlantic Ocean. The city is served by both CSX and Norfolk Southern railroads. But no rail spur connects to the Boeing plant, and it’s seven miles to the North Charleston terminal and the docks on the Cooper River.
Salt Lake City
Along the Salt Lake corridor, from Ogden in the north to Provo in the south, a composites industry has mushroomed that may draw Boeing to fabricate the 777X’s giant composite plastic wing here. And the nonunion workforce, already skilled in making metal components, is a contender to get the job of 777X final assembly as well.
In addition to assembling the 787’s vertical tail fin and horizontal tail here, Boeing will soon fabricate the pieces of those tails in the new West Jordan facility. The growing expertise in the Salt Lake area, where Hill Air Force Base is an Air Force center of excellence for composite repair and composite material research, has persuaded dozens of firms to locate or expand here.
Utah has among the lowest corporate taxes in the country, and the best economic-growth outlook among all the states in an annual competitiveness ranking compiled by economist Arthur Laffer for the American Legislative Exchange Council, a free-enterprise lobbying group.