Stakes Are High in Contest for Boeing 737 MAX Final Assembly
To win final assembly of the planned Boeing 737 MAX, the state of Washington must take swift, bold action, says consultancy Accenture, which has analyzed the manufacturer’s potential return on investment (ROI) from competing sites in Alabama, California, Florida, Kansas, New Mexico, North Carolina, South Carolina and Texas. The Washington Aerospace Partnership lobby group commissioned Accenture to recommend how to improve and strengthen the state’s aerospace competitiveness.
Advantages listed for Washington include the local workforce’s high productivity and knowledge and a supplier network that could provide a faster ROI than could new assembly facilities. Offsetting disadvantages include higher long-term wage and related costs, a limited ability to produce required engineering talent and a perceived greater risk of strikes.
At stake in the contest to produce the 737 MAX are not only nearly 20,000 jobs and more than $5.5 billion of related total economic activity, according to Accenture, but the decision could also determine the future standing of Washington as a global aerospace hub, where some 89,000 people are currently employed at about 150 “aerospace-focused” companies. “If Boeing chooses [an alternative site to Renton], Washington’s aerospace cluster could weaken, creating a very uncertain future,” warned Accenture.
Washington has an established record of state- and local-government support for aerospace. Recent investments include funds for training, preferential tax rates, credits and exemptions, and changes to unemployment insurance and workers’ compensation programs, as well as dock, rail and road construction. Key state actions identified by Accenture to help Washington win 737 MAX final assembly and strengthen its general position in global aerospace include recommendations covering mechanics’ education and training, increased numbers of engineering graduates, expanded aerospace-related research, extended tax credits, improved infrastructure and support for management/labor collaboration.
To strengthen its bid for work beyond the 737 MAX program, Washington also must enact other Accenture recommendations “in the next 12 to 24 months.” These include: educational initiatives to increase student “engagement,” creation of an aerospace support coordination post within the state Governor’s office, and working with Washington’s U.S. senators and congressmen on funding and support for education, workforce development, training and research.
Washington is uniquely positioned to win the 737 MAX final assembly work, but must make immediate decisions to address targeted investments to secure its aerospace future, said Accenture. “The opportunity has far-reaching economic consequences [with] implications [for] Washington’s ability to compete for subsequent airplane programs,” it concluded.