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Originally published November 23, 2013 at 11:05 AM | Page modified November 25, 2013 at 9:57 AM

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Boeing picks 15 potential sites nationwide to build 777X

Washington state is one of the 15 sites under consideration, said the person close to the discussions. Long Beach, Calif., and Salt Lake City, are also on the list.


Seattle Times aerospace reporter

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Boeing has asked 15 locations around the United States to submit formal bids for the work of building its forthcoming 777X jet, according to a person close to the discussions.

Boeing spokesman Doug Alder confirmed Saturday that a formal request for proposals was sent out to “more than a dozen” sites late Friday afternoon and into the evening.

Boeing also said Saturday it is not in any talks with the Machinists union to get past the rejection of its contract offer last week that precipitated the opening up of the site search.

Washington state is one of the 15 sites under consideration, said the person close to the discussions. Long Beach, Calif., and Salt Lake City are also on the list.

The other locations include both existing Boeing locations and new “greenfield” sites, according to the source.

Other sites likely to be on Boeing’s list are Huntsville, Ala.; San Antonio, Texas; and North Charleston, S.C.

The states of Kansas and Missouri have also recently declared their interest.

All have existing aerospace expertise and Boeing facilities.

Aviation analyst Richard Aboulafia of the Teal Group expressed skepticism Saturday that Boeing would choose a greenfield site — a completely new location with no experience in airplane manufacturing.

“That’s just really a bad idea,” said Aboulafia. “You are adding multiple layers of risk both in terms of workforce and infrastructure.”

Boeing did that on the 787 Dreamliner program when it chose South Carolina to build big fuselage sections.

That caused such delays and quality problems in the jet program’s early years that the chief executives of both Emirates and Qatar Airways, whose orders launched the 777X in Dubai last week, declared in interviews there that they have told Boeing not to repeat that experience.

Casting a wide net for bidders does, however, “do a good job of motivating” the more-established contenders, said Aboulafia.

In his view, the best site by far remains Washington state because of the workforce and infrastructure already in place here building the current 777.

Boeing is not disclosing what it asked for in the requests sent Friday.

Alder said the sites were selected “based on conversations that those sites or locations asked to be included and met the qualifications we were looking for.”

Responses are due by mid-December, Alder said. “We expect a final decision early next year.”

Boeing will consider proposals for final assembly of the airplane, for fabrication and assembly of its giant composite wing, or for both.

“Those could occur in the same place or separately,” Alder said.

Alex Pietsch, director of the governor’s aerospace office, said Washington is “still well-positioned.”

“We’ll spend time reviewing the (request for proposal) and preparing the information requested.”

The 777X was launched last week with orders and commitments for a record-breaking 259 jets.

The plane will have a metal fuselage similar to that of the existing 350-seat 777-300ER model, though stretched to accommodate more than 400 passengers in the larger of two new models.

777X will feature new fuel-efficient engines and huge wings with a span of 233 feet. The last 10 feet of the wingtips will fold upward so the plane can fit at standard airport gates.

The wings will be made from carbon-fiber-reinforced plastic composite. They will be fabricated in a purpose-built advanced manufacturing facility with a clean room for laying down of the fiber and a giant high-pressure oven to bake the material to hardness.

Alder said the company won’t make any further decisions on its site search before the mid-December deadline for responses.

He said the company still has “no plans to re-engage in contract talks with the Machinists union.”

The 31,000 members of the International Assocation of Machinists (IAM) union on Nov. 13 rejected by a 2-to-1 margin a Boeing contract offer that would have secured the 777X work for Washington state.

The proposed contract would have frozen employee pensions and introduced a new wage structure that drastically slowed wage growth for new hires, who would take 16 to 20 years to reach the top of the pay scale instead of the current six years.

Alder declined to comment on whether any moves to try to resolve the stalemate with the IAM could proceed in parallel with the site-search process.

“We aren’t going to discuss how these two (the site search and the union stalemate) may factor in as we go into this next phase,” Alder said.

Despite firm Boeing denials, rumors are rampant among the rank-and-file members within the Everett factory that efforts are going on behind the scenes to find a way forward with the union.

Almost the entire local District 751 and the national leadership and staff of the IAM have been in Las Vegas most of the past week, attending the union’s annual retiree conference. That event is followed by the Guide Dogs of America annual charity banquet at Bally’s hotel and casino; the IAM is a big supporter of the Guide Dogs charity work.

A source close to Boeing senior management said categorically that no talks are going on.

With the state-versus-state competition now truly under way for the 777X work, industry analyst Aboulafia said that, “From the standpoint of economics, none of this makes sense.”

Although Boeing is at loggerheads with the union over reining in long-term labor costs, those costs are such a small proportion of the overall cost of building airplanes that, “You could meet the union halfway and it wouldn’t have any material impact on the competitiveness of your pricing.”

“The only thing that makes sense is that (Boeing executives) are just angry, doing this in a spirit of distaste and antipathy” toward the union, he said.

“Maybe the union has brought that on themselves,” Aboulafia added. “I don’t know. But it’s nothing to do with rational market considerations.”

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



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