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Originally published June 12, 2011 at 10:00 PM | Page modified June 13, 2011 at 12:15 PM

Boeing official hints of job security for Puget Sound area workers

Jim Albaugh predicts rapid growth and says the company will outsource less work in the future. But he says no decision has been made about where to build the successor to the 737 jetliner.

Seattle Times aerospace reporter

Albaughlooks intothe future

On Puget Sound jobs

"We're going to hire several thousand more."

On selecting a site for Boeing's next jet

"This is going to be about being competitive and where can we best build an airplane."

On Puget Sound factories

"This is where the talent is. This is where the engineers are."

On South Carolina

"Charleston could evolve to be the composites center of excellence for us."

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Boeing Commercial Airplanes chief Jim Albaugh foresees such rapid growth in the next few years that he says Puget Sound-area workers needn't fear competition from the company's burgeoning East Coast manufacturing site.

Many of Boeing's almost 76,500 local workers are concerned about the area's diminished role on the company's latest plane, the 787 Dreamliner, and worry that the next jet will be built somewhere else.

That anxiety will be aired starting Tuesday when an administrative law judge in Seattle begins hearing a National Labor Relations Board (NLRB) complaint that Boeing put its second 787 final-assembly line in South Carolina instead of Washington state to retaliate for past strikes. That would violate labor laws.

But Albaugh, in an interview one day before Friday's ceremonial ribbon cutting at that plant in North Charleston, S.C., insisted that plans for future jets and a big expansion of Boeing's output on existing jet programs mean plenty of work for everyone.

"Our issue is not going to be where you put work," Albaugh said. "It's going to be how can you find workers to support all the production that we have, whether that's here or Charleston."

He said the Puget Sound region is "top of the list" of locations to be considered for the next new airplane Boeing builds.

Yet, he foresees Boeing Charleston developing into a "center of excellence" for manufacturing aircraft sections that, like the 787, are made out of carbon-fiber-reinforced composite plastic.

Albaugh said Boeing will do less outsourcing of work in the future. And he confirmed that production work on the tail of the next model of the 787 Dreamliner will be brought back in-house to Seattle. In addition, Boeing plans to boost production of current jets by 40 percent at its Renton and Everett factories and stretch local resources to the limit.

"We've hired 3,000 people here since the fall of 2009, and we're going to hire several thousand more," Albaugh said. "I feel very positive about where Boeing is going and where Puget Sound is going."

In fact, his figure understates the boom in aircraft manufacturing work. At a time when many businesses are still facing recession, Boeing's total work force in Washington, including defense-side employees, is up almost 4,700 in the past year.

Albaugh said Boeing already is pulling back in-house work on the 787-9, the larger derivative of the Dreamliner now in development.

Boeing did about half of the engineering work on the initial 787-8s but left the detailed engineering designs to major partners. On the 787-9, Albaugh said, local engineers are doing 70 percent of the development.

And some manufacturing work is coming back in, specifically the horizontal tail on the 787-9. That section on the 787-8 is made by Alenia in Italy.

Poor-quality work by Alenia contributed to a serious delay a year ago, when Boeing had to ground its flight-test airplanes to inspect the horizontal tails on the 787-8s. About two dozen fully built airplanes subsequently needed their tails extensively reworked.

Boeing sent hundreds of employees to Italy to help fix Alenia's problems.

"As you know, [Alenia] got off to a rough start," Albaugh said. "But they have focused on improving what they did, and right now they are doing a reasonable job."

Still, he confirmed that initial production of the 787-9 horizontal tail, which has some design changes, will be done at the Developmental Center beside Boeing Field.

That will secure hundreds of high-end machinist and engineering jobs in Seattle.

Boeing will perfect the manufacturing technique there. When the process is considered stable and repeatable, that work may or may not move elsewhere within Boeing.

"We made the decision to bring that back," Albaugh said. "We'll do some of the production here. And we may do all of the production here."

As for Alenia, he said, "We've told them they could be second source. We'll see how they do."

Future assembly

A much larger issue is how and where future Boeing airplanes will be assembled.

Albaugh said he expects to make the first major strategic decision on that question before year-end. Boeing could opt to put a new engine on the 737 to compete against the rival Airbus A320, which will have a new engine by 2015. Alternatively, Albaugh may go for an all-new airplane.

Acknowledging the deep flaws of the heavy outsourcing approach used on the 787, Albaugh repeated the assurances he's given often since taking over in the fall of 2009: "You'll see us have more control of critical parts of the airplane on future programs."

Does that include the wings of the next plane? Wings long were considered the crown jewels of Boeing designs, but that design work on the 787 was outsourced to Mitsubishi Heavy Industries (MHI) of Japan.

"I wouldn't want them to read in the paper that we'll do all the wings on new programs, because we probably won't," said Albaugh, saying Mitsubishi "has done a good job."

But, he added, "We'll do enough of the wing activity to have the understanding I think we need."

Gov. Chris Gregoire last week appointed a senior adviser to head an effort to convince Boeing that the successor to its 737 airliner should be built in Washington state.

Albaugh said it's too early to discuss locations.

"We haven't even written down the criteria on how we might base a location decision. Certainly Puget Sound is going to be at the top of the list," he said. "But there are no entitlements. This is going to be about being competitive and where can we best build an airplane."

Ahead of the NLRB hearing that directly questions the balance Boeing has set up between the two manufacturing centers it now runs, Albaugh spoke about them carefully, as if he were comparing two children while trying not to favor either one.

"I love Puget Sound," Albaugh said. "We have a great work force here. The mechanics are really magicians. They are the best in the world at what they do. But I'm very confident that the team down in Charleston will come down the learning curve and be good as well."

While Charleston now depends heavily on Boeing's Puget Sound facilities for engineering support and operational leadership, the South Carolina site eventually will be relatively independent, he said.

"It's very possible Charleston could evolve to be the composites center of excellence for us as we continue to build 787 and/or build new airplanes," Albaugh said.

That should be encouraging news for Charleston: The baseline assumption of the Boeing team planning the next new airplane is that it will be made of composites.

For Boeing's Puget Sound-area workers, still left without any guarantee on future airplanes, Albaugh offers the assurance that the region remains the center of gravity of Boeing Commercial Airplanes.

"This is where the talent is. This is where the engineers are," he said. "I look at a very bright future for this location."

Dominic Gates: 206-464-2963

or dgates@seattletimes.com

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