Wings Magazine

Washington state courting Boeing’s rival Airbus

Dec. 18, 2013, Seattle, Wa. - Even as they try desperately to hang on to Boeing Co., officials in Washington state have been courting the main competitor of the aerospace giant.

December 18, 2013  By The Canadian Press

During the past several months, state officials have travelled to the
U.S. headquarters of Airbus SAS in Virginia, moved to connect Airbus
with Washington state suppliers, and signed a five-year confidentiality
agreement with the company to allow further exploration of business
opportunities, according to records obtained by The Associated Press
under public disclosure laws.


In a confidential memo provided to Gov.
Jay Inslee in July, state officials described dozens of potential ways
to expand or recruit aerospace businesses in the state. At the top of
the memo was Airbus, described as just one of a few major opportunities.



One expert said for years it was
generally frowned upon for Washington state officials to jeopardize the
relationship with Boeing by seeking ties with Airbus. However, the steps
outlined in the memo came amid tension created when Boeing moved its
headquarters from Seattle to Chicago and started an assembly line in
South Carolina to build its 787 passenger plane.


Now, as it looks for a cheaper place to
build its 777X passenger plane, Boeing has been exploring bids from 22
states that could send thousands of good-paying jobs elsewhere. Hoping
to convince Boeing to stay in Washington, state lawmakers gathered in a
special session and approved an estimated $9 billion in tax breaks.


Alex Pietsch, top
aerospace adviser to the governor, said the talks with Airbus are not an
attempt to replace Boeing. But a new relationship with another industry
player would help diversify the state's aerospace economy and provide
new opportunities for suppliers that are largely dependent on Boeing, he


"Just because we have had a near 100-year history with the Boeing Co. doesn't mean we can't work with others," Pietsch said.


Boeing's history in the Pacific Northwest
dates back more than a century, when William Boeing purchased a Seattle
shipyard that would become his first airplane factory. Since then,
Boeing has been a cornerstone of the region's economy. Its shifting
personnel influences traffic patterns and its green aircraft fuselages
can be seen travelling by train along the Seattle waterfront.


State figures show the aerospace industry
employs some 130,000 people at 1,250 companies around Washington, with
suppliers making components such as aircraft lavatories, flight-deck
security doors and moulds to shape aircraft fuselages. The state
estimates 777X production would support more than 56,000 jobs.


David Williams, vice-president of
procurement for Airbus Americas, said there are no near-term plans for
Airbus to set up shop in Washington. However, he pointed out that
Washington is already the company's No. 2 state for procurement, with
around $200 million in purchases a year.


He expects that amount to
grow as Airbus increases its U.S. spending and makes more connections
with Washington state businesses.


This past summer, the state worked with
the Pacific Northwest Aerospace Alliance to bring together aerospace
suppliers and Airbus to talk about how they can expand partnerships.
More than 110 suppliers attended the event — nearly triple what the
alliance had anticipated.


Monica Tate, aerospace business
development manager at the Washington state Department of Commerce, said
a variety of suppliers already have relationships with Airbus but
generally do the work on an as-needed basis.


"We were ready to take it to the next
level," said Tate, who travelled to Airbus Americas headquarters in May.
Pietsch also has visited the company's offices in Virginia.


Tate said it would be ideal for Airbus to
establish a physical presence in Washington state, but she hopes there
will be exponential growth in Airbus-related business in the state

Scott Hamilton, an
aviation analyst based in Issaquah, said the past attitude discouraging
dealings with Airbus was due to neglect and complacency on the part of
political leaders who were satisfied with Boeing's presence.


That has changed. As Boeing began
developing the 787 line in South Carolina, Hamilton said state leaders
needed to diversify Washington's aerospace industry. The meeting this
summer between Airbus and suppliers was a positive sign, he said, and
there are indications that Boeing is fine with the relationship since it
would maintain a robust base of suppliers.


Hamilton also said it would make sense
for Airbus to scoop up some of the engineering talent that Boeing has
laid off in the region and develop an engineering presence in the state.

Williams, the Airbus Americas
vice-president, said it's clear the state has a huge depth of expertise
to supply the airline industry.


Airbus expects a certain level of "home
team" allegiance between Washington state and Boeing, Williams said, but
there's a realization on all sides that the airline industry is now
global with two major players — Boeing and Airbus.


"To shut the door to either one of those, you're reducing your opportunities by half," Williams said.


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