Business Columns & Blogs

Bill Virgin: Mild case of Boeing anxiety

Here is some stuff I know, the “more things to worry about on an already gloomy winter day” edition.

 • At the risk of reading way too much into something so innocuous, it was bemusing to see the dateline on Boeing’s announcement of yet another delay in the 787 was Everett, not Chicago, as though the whole untidy mess was merely a local headache, not another public rebuke of the Chicago-based corporate management’s strategies and execution of same.

But then, the 787 production debacle has moved beyond being an issue just for Everett, or for Boeing in Puget Sound, or even the CEO’s office in Chicago. It long ago moved past the point of evoking bemusement, or impatience, or exasperation among those who work for the company, have ordered its planes or have some interest in how Boeing does. And it has ceased to be an issue just about this plane.

The issues of Boeing’s competence and credibility now envelop the entire company. They are serious and deep enough to foster more than mere nervousness about its competitive stature – and they cast a huge shadow over the company’s ability to sell whatever the next plane will be.

Which brings us right back to the shores of Puget Sound, in this case to Renton. Somewhat obscured by the succession of 787 stories is the fact that Boeing’s Renton plant continues to churn out 737s, has significantly sliced the time it takes to make those planes and has two production-rate increases scheduled for it, good economic news for a region that can use some.

Sometime in 2011 Boeing is expected to make a decision on what to do with the 737 – to adapt new engines to the existing plane, or come up with a new plane to replace it. If Boeing decides on the latter – and that’s the way conjecture is leaning at the moment – the company may also decide to put up for competition location of its final assembly point, much as was done on two occasions with the 787.

That right there will be the source of plenty of angst for the Puget Sound region and the state of Washington. But also consider what might be going through the minds of potential customers asked to order the 797 or whatever it’s to be called. Boeing trying to get a new production line going in South Carolina or Alabama or Texas or wherever, combined with the same global-supply chain scheme that has been such a resounding success with the 787, combined with the normal snarls that occur with any plane development program – what do you suppose that’s going to do to delivery schedules, or what those potential customers expect them to be?

Especially when, by the time the new plane arrives, rival planes from Airbus and emerging programs in China, Canada, Brazil, Japan and Russia will be on the menu as well. For Boeing to land those wary customers, it had better straighten out the 787 program and fast, or it had better offer evidence that it has learned its lessons and things will be very different next time – or the 797 had better be such an incredible plane that customers are willing to put up with delivery a year – no wait, make that two; all right, three at the most – later than they had planned.

 • The Washington State Travel Impacts study, updated with 2010 numbers and released last week, might be viewed as a bit of positive news, given that it indicated increased visits by tourists and greater tourism-sector spending.

Or it might be read as one more warning to Tacoma to make sure it has its tourism-promotion act together this year.

An interesting bit of data contained in the report indicates that fully 36 percent of visitor spending in Washington was done by Washingtonians – i.e., people on day or weekend trips. The biggest category, 52 percent, was “other U.S.,” of which a significant portion has to be Oregonians and Idahoans (Idahohites? Potato Heads?) on similar short excursions. Throw in British Columbians who show up as international visitors but who are here on a weekend jaunt and there’s a sizable portion of Washington’s travel base who may be here for a few days at most but whose spending is hugely important.

Which is where Tacoma and Pierce County fit in. Travelers from across the country or around the globe may not have this town at the top of their destination, though no doubt it catches some spillover from Seattle-bound tourists who decide to venture out a bit. But travelers from around the state and the Northwest are far more likely to be interested in what Tacoma has to offer, such as that new car museum we hear tell is a big deal, and far more willing to make the expedition.

Provided, of course, they know of what they might see when they get here. The governor’s proposed budget calls for zeroing out the state tourism office as of July 1, and even if it continues operating the state office won’t be focusing specifically on promoting Tacoma and Pierce County attractions.

Either way, the impetus will have to come from the local folks – especially the Tacoma Regional Convention + Visitor Bureau – to get the word out at events including the Seattle Travel Show later this month (at which the bureau is listed as an exhibitor) and other regional venues and channels, and then make sure the town has the attractions, signage, parking, eateries and other amenities in place to back up the message that, “Hey, we’d love to have your dollars visit us (and you’re welcome to join them).”

Bill Virgin’s column on business and economics appears Sunday in The News Tribune. He is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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