Future aerospace work depends on state's competitiveness, Gregoire says

Spurred by fears that Washington state may lose future aerospace jobs to the South, Gov. Chris Gregoire rolled out a new industry task force Thursday to improve the state's competitiveness.

State officials and legislators are particularly preoccupied with landing a second production line for the 787 that would add hundreds of jobs rolling out twice as many Dreamliners in Everett — though that project seems unlikely to be realized anytime soon.

Gregoire said she is determined that "if there's to be a second 787 line ... that it's to be located here in our state." The same goes for "the next 797 or whatever," she said.

An additional 787 assembly line is probably years away. The first Dreamliner hasn't even flown yet, and airlines' demand for planes is in a steep downcycle — this year Boeing has lost 32 orders for the 787, though it still has an astonishing backlog of 878.

Boeing spokesman Jim Proulx said there isn't even a projected timetable yet to make a decision on a second 787 line.

But the maneuvering over that potential prize, however distant, has already begun.

The national leader of the Machinists union, Tom Buffenbarger, said Thursday he believes that during negotiations to settle the union's two-month strike last fall, Boeing's leadership made a commitment that if it builds a second 787 line, it will be in Everett.

Boeing disagreed with Buffenbarger's assessment, saying the decision is not made.

The governor's panel

Gregoire said the new Aerospace Council she is creating will lead initiatives to develop aerospace-skills training as well as research and development in the state.

And she insisted that "this is about aerospace. This is not about Boeing (alone)."

Industry and labor will appoint four members: one from Boeing; one representing the more than 250 smaller aerospace suppliers in the state; one from the Machinists union; and one from the white-collar engineering union.

The other nine council members will come from public agencies and institutions and the Legislature.

The presidents of the University of Washington and Washington State University are on the council to ensure that aerospace-research efforts at both schools are coordinated with the industry.

Gregoire cited a newly released report commissioned from Deloitte Consulting by the Snohomish County Economic Development Council that criticizes Washington's competitiveness compared to Kansas, North Carolina, South Carolina and Texas.

In 2003, it was a Deloitte report that first recommended the state grant Boeing tax breaks worth in excess of $3 billion. Those tax breaks were implemented as the state competed for the initial 787 assembly plant.

The new Deloitte assessment is that "Washington has not been a player in recent site selection decisions by aerospace companies."

It refers, for example, to Spirit Aerosystems' choice of a site in North Carolina for its plant that will build pieces of the Airbus A350.

Cutting business costs

In addition to the measures announced Thursday by Gregoire, the report specifically recommends legislative changes to reduce business costs — including the costs of unemployment insurance, workers' compensation and business taxes — that have been pushed by Boeing and other business lobbies.

Various public officials have been pushing such measures all year, sometimes linking them to securing the second 787 line for Everett.

In February, Snohomish County Executive Aaron Reardon said he saw the second 787 line as "the canary in the coal mine" that would reveal Washington's competitiveness with other states.

But in an interview Thursday, Buffenbarger, the national president of the International Association of Machinists (IAM) union, said the report simply represents Boeing's agenda and fits a repeated pattern.

"They try to hold up the good people of Washington," said Buffenbarger. "Boeing is just playing hardball with the governor."

Gentlemen's agreement?

And in a surprise twist to the debate over a second 787 line, Buffenbarger said he discussed the issue last fall in the negotiations that ended the Machinists strike in the Puget Sound region.

Buffenbarger said that in exchange for agreeing to a contract that lasts four years instead of the usual three, he got at least a tacit personal commitment from Boeing's senior leadership that a second 787 line would be in Everett.

"This union took a leap of faith extending a long-term agreement to Boeing to ensure that a second 787 line would be located in the Puget Sound region," said Buffenbarger. "If Boeing is attempting now to renegotiate on a public bargaining table with the Legislature and the community of Washington, that's not very honorable."

Boeing disputes Buffenbarger's account of the discussion.

"We are surprised and puzzled by this assertion by Mr. Buffenbarger," said Boeing's Proulx. "There is no agreement with the IAM on the potential second line for the Boeing 787."

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Seattle Times reporter Jennifer Sullivan contributed to this report.