Boeing Hunts for New Home to Build Its 777X Aircraft – The Prize is Huge for the Lucky Winner

“Turning a battleship around” is the metaphor often used when describing the difficulty in planning and implementing a major change in direction, be it by governments or huge corporations. Boeing Aircraft is now in the process of making one such massive corporate decision. The difference is, this decision needs to be made by year-end, giving the company less than six weeks. With 259 orders now in hand for the 777X aircraft, Boeing has no time to waste in finding a new place to build it.

Boeing officials had intended for their new modified wide-body passenger aircraft, with its state-of-the-art composite wing, to be manufactured and assembled at the immense Boeing manufacturing facility in Everett, Washington. This facility was the birthplace of a long list of Boeing aircraft, including their first jet-powered commercial airliner, the 707, along with their game-changing 747 models. Everett stands as the largest Boeing manufacturing facility in the world.

But all that changed when the International Association of Machinists rejected the terms of a contract extension being offered by Boeing. From Boeing’s perspective, this contract would have guaranteed that production of this aircraft would be at the Everett plant, and that thousands of employees would remain on the payroll for at least the next eight years. From the union’s standpoint, the concessions they were being asked to make were unacceptable.

As a result, Boeing’s corporate office in Chicago immediately initiated a site selection process by issuing a fast-track request for proposals (RFP). Fifteen potential locations are currently in the running. The contenders include (among others) Huntsville, Alabama; Long Beach, California; St. Louis, Missouri; North Charleston, South Carolina; San Antonio, Texas; and Salt Lake City, Utah. Even the state of Washington can throw its hat back in the ring with the right package.

What it all comes down to is this: The winner will be the state that can provide the best mix of tax incentives, low labor costs, workforce skills, logistical infrastructure, and even free land if necessary. In return, the winning state will add tens of thousands of new long-term jobs and will see millions in new tax revenues infused into its budget.

Most of these states already have a long history with Boeing, in either the military or commercial aircraft markets. For example, St. Louis already has 15,000 Boeing employees and is the second-largest Boeing location in the US.  Long Beach already has thousands of workers with extensive experience in building large jets, including the military C-17. It has the ports and infrastructure to easily convert over for the 777X. In North Charleston, South Carolina, Boeing already manufacturers its 787 “Dreamliner,” and the company is buying yet another 267 acres. Along with Texas and Alabama, South Carolina is a “right to work” state, where union issues would be non-existent.

According to the chiefexecutive.net ranking of best states to do business in 2013, Texas ranks as #1, and California at #50, but that is all irrelevant. With this much at stake for the winner, it comes down to whatever is contained in those sealed packages being delivered to Chicago. Along with many anxious governors and state legislators, we can only wait to see who gets the final nod.