Geography had little to do with establishing Western Washington as one of the world’s great centers for the commercial aerospace industry. The happy historical coincidences and accidents that put Bill Boeing and his interest in aviation here, instead of somewhere else, as well as the decisions, gambles and mistakes that made his namesake company a dominant player in the industry while others faded, were not a function of place the way that the forest-products industry grew up here because that’s where the trees were.
But once that Boeing base was established, geography had everything to do with the network of suppliers, subcontractors, vendors and service providers that grew up around the assembly centers in Renton and Everett, building a regional economy in the process.
Now geography might just prove to be the long-term undoing of Washington’s aerospace sector, not just in the form of Boeing itself but for all the companies that do work for it or derive economic benefit from its presence.
The intertwined subjects of geography and the aerospace industry have been weighing especially heavily on the minds of Washingtonians ever since the company’s shock announcement in 2001 to move its corporate headquarters out of Seattle. Chicago was later picked as the destination.
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The consoling mantra of “OK, Chicago gets the executives, but at least we still build the planes” was irreparably shattered first by Boeing’s announcement of competition for assembly of the 787 (won by Everett), then by its decision to put a second 787 assembly line in South Carolina.
Whatever illusions remained that the Puget Sound region would forever remain the exclusive home of commercial jet assembly for the company, that the equations Boeing equals Seattle and Seattle equals Boeing would never be negated, should by now have been thoroughly erased by the steady stream of announcements during recent months: boosting its composite-fiber parts production capacity in Utah, moving IT support personnel to other locations across the country, moving flight-training simulators to Miami, and, most recently, planning for more expansion in South Carolina.
The announcements have been as unsurprising as they have been unsettling. Anyone paying the slightest degree of attention could sense the direction of the company (in literal terms, to somewhere else), and they’re resigned to the prospect of more to come.
Somewhat lost in the recent coverage of Boeing’s South Carolina expansion was a bit of news that was equally unsurprising but might prove even more unsettling to prospects for the regional aerospace industry.
Airbus has officially launched construction of an aircraft assembly plant in Mobile, Ala., with production (mainly of its 320 line, a competitor to the Renton-built 737) to begin in 2015.
That Airbus wants to build planes in this country could be taken as good news for U.S. subcontractors, vendors and suppliers to the aerospace industry. Airbus has indicated it plans to double its purchases from U.S. suppliers, now about $12 billion annually.
That sounds like good news, because Washington nets about $200 million a year in Airbus purchases (according to a state Department of Commerce estimate from last year). A state delegation to the 2012 Farnborough Air Show made a point of visiting Airbus to encourage more purchases. Having another customer would be welcome news to the suppliers themselves, not just for the additional revenue but in having some diversification in their portfolio of customers.
However, because it is our job to see the glass as half empty – and leaking – here is the cause for concern. For that, we turn to our friend geography.
The distance from Seattle to Charleston, S.C., is about 2,400 miles. From Seattle to Mobile, it’s less than 2,200.
From Charleston to Mobile, it’s about 500 miles by air (according to the website distance-cities.com), 642 by highway.
Washington-based suppliers to Boeing are already confronting a decision of whether to serve both of that company’s primary production centers, and if so, how. That decision will only become more pressing as Boeing increases production, and maybe adds plane models, to South Carolina. Stay where you are and try to serve the other location by truck, rail or air freight? Put plants in both locations? Try to split the difference somehow? Concede the business at the other location to someone else, at the risk of having suppliers there encroach on your territory?
Now add in the wrinkle of Airbus in Alabama. That increases the attractiveness of putting a production facility somewhere in the Southeast, in close proximity to Mobile and Charleston; maybe it’s Seattle that gets served remotely.
The geography of auto plants, once in the Midwest, now spread through the Southeast as well, explains why the Northwest never figured as a significant supplier to that industry.
The geography of aerospace production is shifting, too, and not in a way that favors our region.
Coping with that shift is going to require some tough, and expensive, decisions from companies within the industry as well as the governmental entities counting on the sector to keep the economy going. The alternatives? Doing nothing is always available, if not always promising.
So is hoping for another happy accident of history of the sort that put aerospace or computer software here. How comfortable do you feel betting the region’s fortunes on that scenario?
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at firstname.lastname@example.org.