Here is some stuff I know, the “extrapolating economic-development trends out of seemingly small news items” edition:
• Actually, this first one isn’t so small. Biotech giant Amgen announced it is retrenching by cutting 2,400 to 2,900 jobs and shutting facilities in Washington and Colorado.
The reference to Washington means Amgen facilities in Bothell and Seattle, the latter being a huge, showy Elliott Bay waterfront office and lab complex that Immunex was developing when Amgen bought the company in 2002.
Immunex was the most prominent and successful of the first wave of Seattle biotech companies, its signature product a rheumatoid arthritis drug known as Enbrel (which, by the way, is still a contributor — more than $1.2 billion in revenue for Amgen for the second quarter).
But Immunex was seen as more than just another biotech. Its high profile (it was a publicly traded company) and success in getting a product through development, testing, and regulatory approval and to market was a symbol of the Seattle’s arrival as a first-tier biotech center on the order of Boston and the Bay Area.
Boston and the Bay Area, as it happens, are where Amgen is retrenching to, the company referring to those as “biotechnology hubs.”
Seattle never quite made it to hub status. Companies would emerge, go public and work on some potentially interesting products, but the development of projects never turned commercial or the companies were bought by larger biotechs and pharmaceutical companies based elsewhere. The follow-up stage to emergence as an R&D hub, becoming a center for the production of commercial-stage drugs, perpetually remained a prospect on the horizon.
Tacoma and other cities in the region have long eyed biotech and wondered how they might cut themselves in on the action. The lack of research facilities such as the University of Washington and the Fred Hutchinson Cancer Research Center as well as a core of founding companies stymied the migration of biotech much beyond Seattle and the Bothell-Woodinville corridor.
Now those two subregions have to wonder if there’s enough critical mass in the absence of Amgen to absorb the displaced workers, the soon-to-be-vacant real estate and the reputational hit to the region’s aspirations of being seen as among a handful of true biotech hubs. Never mind ascending to first-tier status — now the challenge becomes holding on to a place in the second tier.
• Tacoma-based Columbia Banking System Inc. is adding a third state to its portfolio, with the announced acquisition of Idaho’s Intermountain Community Bancorp.
Columbia continues to be an interesting case study, not just because it’s locally based but because it’s building the sort of multistate, midsized, commercial-and-consumer bank made almost extinct in the great wave of consolidation.
If this were 15 or 20 years ago, you’d figure Columbia wouldn’t have much longer to run as an independent; its market position in an economically attractive region of the country would make it just too tempting for one of the megabanks to pass up.
But the industry has changed considerably in the intervening years. The megabanks have too many of their own headaches, or are already here, to spend much time on chasing after a Columbia or an Umpqua (the other major Northwest regional). It’s always possible that some other larger bank will decide it really wants to be in the Northwest, but conditions are such that Columbia could be left alone to continue building in whatever strategic and geographic directions it wants to go.
In the process that would make Tacoma a bit of a banking center, which would be one more interesting twist in the saga of the financial-services-hub strategy the town came up with some years back. If you recall, that plan was predicated upon the presence of Columbia and the investment-advisory company that wound up bolting for Seattle, where it became an essential part of that city’s grand strategy for developing a financial services hub.
Columbia is still here; with a pending acquisition by a London-based outfit, that other company’s long-term presence in Seattle is in doubt. What was its name again?
• As critical economic-development sectors go, there aren’t many more crucial for this region than aerospace. So it should catch attention that Boeing announced this past week that it will build another derivative in the 787 line — the 10 in this case — “exclusively” in South Carolina.
Because the new model is longer, the midbody section is too long to be moved efficiently from South Carolina to Everett for final assembly. “In addition, introducing the 787-10 in North Charleston takes advantage of that facility’s capacity while allowing the Everett facility to continue improving productivity as it focuses on the 787-8 and 787-9,” the Boeing announcement said.
Production of 787s is expected to reach 14 a month by the end of the decade, split evenly between Everett and South Carolina (they’re currently at seven and three).
And after that, especially if orders slow and production rates need to be cut?
Whatever the business case to be made in making South Carolina the exclusive site for the 787-10, the announcement also serves the purpose of sending a not-so-subtle reminder to the local workforce and government that, “hey, we got options.” Which is why the region has to continue developing options too, not just in aerospace but in other job-producing sectors.
Such as, for example, biotech? That sounds promising.