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Originally published February 24, 2011 at 5:46 PM | Page modified February 25, 2011 at 3:15 PM

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Jon Talton

Boeing win is a welcome upside surprise

For a place that's seen its share of nasty surprises in recent years — the collapse of Washington Mutual, a 787 factory in South Carolina — the selection of Boeing to develop and build the Air Force's new tanker is an upside delight.

Special to The Seattle Times

For a place that's seen its share of nasty surprises in recent years — the collapse of Washington Mutual, a 787 factory in South Carolina — the selection of Boeing to develop and build the Air Force's new tanker is an upside delight.

Just a few weeks ago, the buzz among some defense analysts was that the $35 billion contract would go to Airbus parent EADS, to be assembled near Mobile, Ala.

Had that happened, it would have represented a second loss to the South for the Puget Sound-area aerospace industry. Indeed, according to the Mobile Press-Register, local officials had gathered at the convention center there Thursday "for what was expected to be a victory party."

Boeing feared it would be shut out of the tanker business for 20 to 40 years if it lost. And at the least, the growth of airplane-manufacturing jobs in Everett would have been sandbagged.

Instead: victory.

"This win demonstrates once again that the Boeing Company is an integral part of the Seattle economy," Phil Bussey, president of the Greater Seattle Chamber of Commerce, said after the announcement. "We are thrilled at this victory, the 11,000 jobs it will generate and the positive economic impact it will create. This win only further solidifies Boeing's and our region's competitiveness in both the commercial and military aviation markets."

Those jobs numbers represent both direct and indirect employment, but many will be manufacturing jobs, which pay far better than most service jobs. While the state has a diversified manufacturing base, its foundation, largest manufacturing employer and biggest exporter is Boeing.

Arun Raha, the state's chief economist, said the decision gives "a new lease on life to the 767 line," and has a broader effect on the manufacturing sector because of the region's aerospace supply chain. He expects to factor the economic impact of the contract into the state's March forecast update.

Barring another delay in the snakebit, decadelong process, the award means the 767 line lives at least into the mid-2030s, Leeham Co. aviation analyst Scott Hamilton told me. That means "hundreds of millions of dollars into the economy annually."

To be sure, challenges lie ahead for both Boeing and the region. One can hope executives in Chicago have learned the value of the experienced Puget Sound work force in their ill-fated outsourcing of the 787 Dreamliner.

Unions, pushed back by the opening of a second Dreamliner assembly in North Charleston, will be under heavy pressure to keep the peace.

And while the tanker win alone won't solve the state fiscal crisis or other economic challenges, it's a move in the right direction. A happy surprise.

You may reach Jon Talton at jtalton@seattletimes.com

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About Jon Talton

Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest
jtalton@seattletimes.com

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