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Home / Press Releases - 2003 / Washington’s Change of Heart Really Landed 7E7 |
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Washington’s Change of Heart Really Landed 7E7 |
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Written On: December 19, 2003 |
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Written By: Richard Davis |
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EDMONDS---Speaking to the Alderwood Rotary Club on Friday morning, Association of Washington Business (AWB) President Don Brunell said Washington’s change of heart toward jobs, growth and economic development was the principle reason Boeing decided to build its new 7E7 at Paine Field in Everett.
On Tuesday, Boeing announced it would build its 7E7, the high-tech, fuel efficient wide-body jet which would replace the 757 and 767, and locate the final assembly facility at its mammoth complex in Everett.
Washington sent strong signals to Boeing that it wanted it to build the 7E7 in either Moses Lake or Everett. “We asked how we could help bring the 7E7 to Washington rather than demanding a truck load of conditions and a mountain of new fees and taxes on the company if it decided to build its new airplane here.
“That was the attitude of voters and reflected at the state and local government level during the last 30 years,” Brunell said. That is until the latest recession.
“Think back 20 years ago,” Brunell told Rotarians, “local government officials socked Boeing with over $60 million in mitigation fees when the company expanded the Paine Field complex to build its 777. Before that a bureaucrat at Seattle City Light stuck a time-sensitive Boeing permit for a new wind tunnel at Boeing Field in his draw and went on vacation. In the case of the wind tunnel, Boeing decided to build it out of state. Who could blame them?
“Nobody ever thought Boeing or any other company would leave Washington. How quickly that attitude changed after 9-11.”
Brunell said companies would rather build and expand facilities where they are already located. They have trained workers, are accustomed to working in an area, can build upon their existing infrastructure, and company officials and workers are part of a community where they would prefer to remain.
“Nobody likes to uproot a family and move across country to keep a job.
“The bottom line is we just have to make sure they can be profitable or investors won’t provide the financial backing to the employer or project. If they can’t make money, they can’t operate and then there are no jobs.”
The AWB President said the unprecedented cooperation between federal, state and local elected officials, the Association of Washington Business and other employer groups and the Boeing unions was insurmountable. “When any area brings that powerful of a coalition together for a project almost certainly guarantees success.”
Brunell said that coalition passed much needed reforms to the state’s unemployment insurance system. “It was one of the most costly in the nation and Boeing Commercial Airplane President Alan Mulally told the Legislature unemployment costs in Washington were the highest of anywhere Boeing operates.”
These changes were not easy to pass in the Legislature because of stiff opposition from the Washington State Labor Council (AFL-CIO) and some construction trade unions who tried to derail the reforms.
“Gov. Locke, Martha Choe and the legislators deserve a great deal of credit for bringing the 7E7 to Washington,” Brunell added. “It they had increased taxes on employers to balance the budget, removed key manufacturing tax incentives and not reformed unemployment insurance, there is no doubt in my mind Boeing would have announced the 7E7 would be located somewhere outside Washington.” Martha Choe is director of Washington’s Dept. of Community, Trade and Economic Development (CTED) and spearheaded the effort for Gov. Locke.
Brunell said the first major hurdle for Boeing was to decide to even build the 7E7. The second was where to locate it. “We felt all along the 7E7 was vital to the company’s success in commercial aviation and locating final assembly in Washington was essential to our state. If Boeing would have moved the 7E7 out of state that would pave the way for other commercial production to leave and we absolutely did not want that.”
Since July 2000, Washington lost one-in-five manufacturing jobs. Over 60,000 workers primarily in the aerospace and aluminum industries lost their jobs. Since September 11, 2001, Washington often led the nation in unemployment.
“We needed to stop that trend and tackle the hard issues that impede economic growth and job loss. The 2003 Legislature got a good start at changing that course and Boeing responded with the 7E7.
“Since the 7E7 production will not start ramping up until 2006, it is essential that Washington elected officials continue to make our state more competitive,” Brunell added. “Lots can happen in the next couple of years. We need to continue our state and local government budget discipline, reform workers’ comp and make our state and local regulatory system much less costly and more user-friendly.
“For employers in our state, including Boeing, bring health care costs, energy rates and expensive lawsuits under control are pivotal to our continued prosperity. If our employers face growing operational costs they can’t compete with China, India and North Carolina.
“We have to approach the next couple of years with the same vigor we have approached the 7E7. While the Boeing announcement was a much needed shot in the arm, we have to remember we have only started down the path toward creating more jobs and economic opportunities.”
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