Boeing didn’t make many allies in Washington state this year. The aerospace company kicked off the year by narrowly winning a controversial contract with the machinist labor union. It then relocated thousands of employees, even after Olympia granted the company $8.7 billion in tax breaks in late 2013.
To ease concerns about the company’s relationship with the Evergreen State, Boeing’s director of government operations Bill McSherry defended the company’s actions Tuesday at a Bellevue Downtown Association event.
“What’s going on with Boeing jobs? We’re Washington’s largest employer, and I don’t think that’s a surprise to anybody,” McSherry said, adding that the company employs more people in Washington than Microsoft, Costco, Nordstrom, and Starbucks combined.
“Our future together continues to be bright. That does not mean that you will never see an announcement that we’re moving jobs here and there,” he said. “It does mean you will continue to see growth.”
McSherry says the company has 10 years worth of production on the books, and most of the work will be completed in Washington. Boeing is working to increase production at the Renton facility to 52 planes each month in 2018, and a new wing fabrication facility for the 777x is under construction in Everett.
“We should all be happy about it because the best planes in the world are being built right here in Washington,” McSherry said.
But keeping 777X manufacturing in Washington was a struggle. The International Association of Machinists voted to accept Boeing’s second contract proposal by only 600 votes in January, and many union members didn’t vote as they were on their holiday break. If the contract had not passed, Boeing could have taken 777X production, and the associated jobs, elsewhere.
The approved contract means Boeing will have a guaranteed workforce for 10 years. The contract removed pension accruals beginning in 2016 and installed an employee retirement account to which Boeing will contribute 4 percent of an employee’s gross income.
The 777 workforce will be retrained on the new technology used to build the carbon-fiber-covered plastic used to build the wings of the 777x.
A deal from the state also sweetened the deal. The $8.7 billion tax breaks were approved by a special session of the Legislature on the contingency that Boeing kept the manufacturing in the state. McSherry said Tuesday that 455 companies in Washington benefit from the aerospace tax incentives.
Up until this year, Boeing had been largely immune to budget cuts at the U.S. Department of Defense. McSherry said Boeing is beginning to feel the pinch, and as jobs are cut on the defense side of the business, the company is working to absorb those employees into the commercial side of the business. In September, Boeing announced it would move 2,000 jobs from the Puget Sound by 2017 due to a decrease in defense spending.
“Our goal is to get as close to zero layoffs as we possibly can. It will be hard, but I think we can do it,” he said.
Ground was broken at the Everett product site in August for a 1.3 million square foot composite wing center. The center, which is the size of 22 football fields, will have three of the largest autoclaves for curing composite metal ever built. This means the 777x wing will be manufactured in Washington, instead of Japan where the 787 Dreamliner wing is built, and cements the company’s presence in the state for years.
McSherry also touched on the integration of robotics and automation into the production process.
“We are putting automation into the building in Renton right now, and we’re looking to add more automation to where the fuselage is built,” he said. “Automation will keep our people safer… increase quality, and bring down unit cost.”
Editor’s note: A previous version of this story incorrectly referenced the Bellevue Downtown Alliance. The correct name is Bellevue Downtown Association.