Inslee calling special session to secure Boeing 777X for state

Staff writerNovember 5, 2013 

Flanked by a consortium of state, county and city officials and aviation industry representatives, Gov. Jay Inslee announces a special legislative session which is scheduled to start on Nov. 7th in an effort to secure the in-state building of the Boeing 777X.

STEVE BLOOM — Staff photographer

Gov. Jay Inslee said Tuesday that he’s asking the Legislature to pass a wide-ranging package of transportation, education, permitting and tax relief measures to win Boeing’s commitment to the state for assembly of its newest jetliner, the 777X.

Inslee said he’s calling a special legislative session beginning Thursday to consider the package of improvements. The governor said he expects the session to last a week.

The legislative package is half of a two-part deal with Boeing. The other half is a new long-term labor deal between the Machinists Union and Boeing. That proposal was developed in several weeks of talks between the union and the company.

Machinists Union members are expected to vote whether to ratify the deal next week.

“It is a lead pipe cinch that we’re going to land this airplane if we do the two things that we need to do,” the governor said.

The deal also includes a commitment from Boeing to build the 777X’s composite wing in Washington. That news could be good or bad for Pierce County where major components of the present 777’s metal wing are made.

Once the present generation 777 is phased out in favor of the 777X, wing component production at Boeing’s Frederickson plant could be reduced. Boeing also builds metal components for other airliner wings at Frederickson.

But composites are the future for airliner wings. Both the 787 Dreamliner and the 777X will have composite wings. If Boeing decides to build the composite wing in Frederickson, that decision could be a big plus for the county. Boeing would not comment on plans for Frederickson when contacted Tuesday.

Bruce Kendall, chief executive of the Economic Development Board for Tacoma-Pierce County, said local officials will campaign hard to win the wing plant for Frederickson.

Boeing already builds the composite tail for the 777 and the composite vertical tail for the 787 Dreamliner at Frederickson. Japan’s Toray Composites has a major composites plant at Frederickson that supplies raw materials to Boeing.

Boeing’s Frederickson site has 300 vacant acres where a new wing plant could be built if necessary, Kendall said.

But other sites could compete for that work, Kendall said. “The work could be done in Frederickson or in Auburn or in Snohomish County,” the Economic Development Board chief said.

Boeing has a large parts-fabrication plant in Auburn and its wide-body assembly plant is located at Snohomish County’s Paine Field. Boeing’s Auburn plant also now makes wing components.

All of that campaigning for the wing plant could be for naught if the union members fail to approve the pact. Boeing reportedly will seek proposals from other states for the 777X assembly plant if the deal falls through.

The governor said lawmakers have a “framework” of a deal on transportation and he’s confident the last few areas of disagreement can be resolved in the next week. He said there was agreement to raise roughly $10 billion in new taxes and fees over 10 years — although he said that could grow or shrink.

That package includes completing state Route 167 from Puyallup to the Port of Tacoma, finishing the state Route 520 bridge replacement, and a new highway in Spokane — but not a new Columbia River Crossing between Portland and Vancouver, Wash.

If it is similar to a version that passed the House before being bottled up in the Senate this year, the package would raise the gas tax by roughly 10 cents and raise a series of fees.

But key lawmakers said they have not yet reached a firm deal on transportation and some are in no hurry to finish.

Senate Majority Leader Rodney Tom said unlike the other aid to Boeing, the transportation package is less critical to finish immediately and could wait for a “phase two.”

Tom, a Democrat, leads a mostly Republican coalition that runs the Senate. He and Republican leader Mark Schoesler said in a joint statement that “Boeing leaders and union officials are fine with giving lawmakers more time to work on a transportation-investment package, rather than expecting them to hurry something so complex through during the special session.”

Separately, the tax relief would extend a series of tax breaks made to attract the 787 assembly to Everett.

Those tax breaks are set to expire in 2024. Extending them to 2040 would save aerospace companies $8.7 billion over that period, the governor’s office said.

Inslee’s office said that would be far outweighed by the package’s $17 billion fiscal benefit, but that was an estimate over a longer time period and his office did not give details of exactly how the state would reap those benefits.

On the labor side, the proposal created by Boeing and union negotiators would extend the present labor agreement, which lasts through 2016 for six more years.

The pact would pay Boeing workers a $10,000 ratification bonus and give older workers the ability to retire beginning at age 58 with a retirement benefit of $95 per month for every year of service to the company.

In return, the company would end the present defined benefit pension program for new employees, extend the time to reach the top of the pay scale from six years to 16, and raise health care insurance costs.

Staff writer Jordan Schrader contributed to this report.

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