Boeing’s wish list for 777X asks for ‘no cost’ site
Boeing documents say its 777X facilities will require total investment of up to $10 billion, but states are invited to provide the site and facilities at “no cost, or very low cost.”
Seattle Times aerospace reporter
Boeing’s ‘desired incentives’ include:
• “Site at no cost, or very low cost”
• “Facilities at no cost, or significantly reduced cost”
• “Infrastructure improvements provided by the location”
Boeing says factories for its planned 777X will require total investment of up to $10 billion, but states competing for the work are asked to shrink that tab by providing the site and facilities at “no cost, or very low cost.”
In confidential documents sent to the 15 states vying for the project, Boeing estimates it will produce 8,500 direct jobs.
The formal Request for Proposal, dated Nov. 22 and marked “Boeing proprietary,” was obtained by The Seattle Times. It describes three scenarios for which each location can make its pitch.
One is for all of the work: a single, 400-acre site that both fabricates the giant composite wing of the 777X, then assembles, paints and delivers the airplane.
The second and third scenarios separate the wing fabrication and final assembly of the jet at different locations.
States from California to Alabama have scrambled to offer Boeing what they can before the company’s deadline next Tuesday.
According to the Boeing documents, a site winning all the 777X work will gain 8,500 direct jobs at peak production in 2024. That would include 800 engineers, 6,750 production workers and 950 administrative and support personnel.
A site that does final assembly but without the wing fabrication would provide a peak of 5,740 direct jobs, including 535 engineers, 4,570 production workers and 635 other personnel.
Fabricating and assembling the wing, if done at a separate location, would provide a peak of 2,760 direct jobs, including 265 engineers, 2,180 production workers and 315 others.
The documents, some details of which were first reported Wednesday by The Charlotte (N.C.) Observer newspaper, lay out three must-have requirements for any site that hopes to win the work:
• An airport with a 9,000-foot runway capable of handling both the 777X and 747-400 jumbo freighters that could deliver parts.
• Easy highway and road access to the site for delivering parts.
• Direct access to the site by rail, including a dedicated rail spur right into the site. This is described as “a critical requirement to support delivery and shipping of parts.”
In addition to these three essentials, the documents list one other “desired” infrastructure feature: a seaport that can handle regular and oversized containers.
The 777X composite wing, according to the documents, is 114 feet long and 23 feet across.
If Boeing chooses to make the wing at one site, then assemble the jet at another, transporting the wing to the final-assembly site is a key logistics challenge.
A conceptual representation in the documents includes a map of the facility with an adjacent taxiway marked “LCF capability.”
LCF stands for Large Cargo Freighter, meaning the heavily modified 747-400 freighter called the Dreamlifter. That’s the whale-like cargo jet used to ferry sections of the 787 Dreamliner around the globe.
A site that wins only the wing work would still be required to have the airport, suggesting that Boeing is considering delivering the 777X wing using the Dreamlifter.
The documents also detail the expected size of the facilities Boeing needs.
The buildings at a site that would do both the wing and final assembly are listed at 4.2 million square feet, with a main building up to 120 feet high, with 90-foot ceilings.
Boeing estimates its investment will include up to $6 billion in property improvements and up to $4 billion in machinery and equipment.
However, Boeing wants the states vying for the work to pay a portion of that.
The “company preference is toward a location that will share in the cost of capital expenditures including acquiring site, constructing facility, building infrastructure and procuring equipment/tooling,” the documents state.
Among the “desired incentives” sought by Boeing, the biggest items are these:
• “Site at no cost, or very low cost, to project.”
• “Facilities at no cost, or significantly reduced cost.”
• “Infrastructure improvements provided by the location.”
Additional incentives it lists include:
• Assistance in recruiting, evaluating and training employees.
• A low tax structure, with “corporate income tax, franchise tax, property tax, sales/use tax, business license/gross receipts tax, and excise taxes to be significantly reduced.”
• “Accelerated permitting for site development, facility construction, and environmental permitting.”
Other factors that will be “significant” when Boeing makes its choice early next year include:
• Low overall cost of doing business, “including local wages, utility rates, logistics costs, real estate occupancy costs, construction costs, applicable tax structure obligations.”
• The quality, cost and productivity of the available workforce.
• Predictability of utilities pricing and government regulation.
Washington is among the states that will submit responses to Boeing’s request.
Among the sites known to be under consideration are Everett; Long Beach, Calif.; Salt Lake City; and Huntsville, Ala.
Also likely on Boeing’s list are North Charleston, S.C.; San Antonio, Texas; and St. Louis.
Last month, Gov. Jay Inslee called a special legislative session in which lawmakers hurriedly approved $8.7 billion in tax breaks over 16 years to woo the 777X.
But after the Machinists union on Nov. 13 rejected a Boeing proposal that would have frozen pensions and dramatically slowed wage growth for new hires, management threw the competition open to other states.
In Missouri, Gov. Jay Nixon also convened a special legislative session to approve an incentive package valued at up to $1.7 billion over more than two decades. That plan is expected to win final approval Friday.
Other states are keeping the details of their offers out of the public spotlight — and away from the inquisitive eyes of their rivals — by crafting them through administrative agencies shielded by nondisclosure laws.
The Boeing executive leading the site search is Ross Bogue, who heads the company’s fabrication division.
The documents say the states’ contacts for questions about the Request for Proposal are Greg Chapdelaine, a senior manager in the fabrication division, and Jeremy Court, who led the development of lean-manufacturing methods on the current 777 production line in Everett.
Information from The Associated Press is included in this report.
Dominic Gates: 206-464-2963 or email@example.com