Long Beach city officials this week threw their support behind efforts to entice Boeing to bring its 777x airline-assembly work to the city and called on the federal government to extend the existing C-17-production line.
Either proposal or both would salvage what’s left of a long-standing, aerospace-manufacturing workforce and supply chain in southern California, though state officials have yet to release any financial incentives.
For more than two decades, Long Beach has been known as the “Home of the C-17 Globemaster III,” a slogan that remains across the top of a 1-million-square-foot hangar that can be seen at Cherry Avenue and Wardlow Road near the Long Beach Airport. At the assembly plant, generations of mechanics and engineers have pumped out more than 250 C-17s since the military transport aircraft’s maiden flight in 1991 when McDonnell Douglas first rolled out the cargo plane before it was taken over by Boeing.
Production has since dropped off after Boeing’s top customer, the United States Air Force, stopped requesting new orders, forcing the company to cut its labor force by more than half to an estimated 1,200 Long Beach workers. Though foreign sales have kept the line in business, reality set in last September, when the company announced it would officially cease C-17 production by early 2015.
With billions in revenue, tens of thousands of high-paying jobs and hundreds of supplier contracts across the region at stake, government officials and labor leaders continue lobbying Congress for federal “bridge” money to keep the plant alive while Boeing seeks more international sales, but another opportunity is now on the horizon.
Long Beach is one of a handful of cities being considered for a site to produce Boeing’s 777x airliner after the International Association of Machinists union in the state of Washington rejected a deal to have the work done in Puget Sound because of labor-contract disputes.
The Long Beach City Council voted unanimously (8-0) to pass a resolution at its Dec. 3 meeting to show its full support of keeping Boeing in the city. That would include working with the State and other agencies to pitch a proposal to lure the 777x work to Long Beach, supporting efforts to continue the C-17-production plant, or both. Councilmember Suja Lowenthal was absent.
The resolution, brought by the city attorney’s office, states that the Council intends to “explore any and all avenues that will encourage and enable Boeing to remain in Long Beach for either production purpose.”
The Council urges California officials and all regional partners to work with Long Beach to develop a competitive application for enticing Boeing to “select Long Beach as its home,” should Boeing release a competitive bid process for the 777x work.
The five-member Los Angeles County Board of Supervisors has also shown its support for bringing the 777x work to Long Beach in a letter sent to Boeing and Sacramento.
“There is no better place in the nation for Boeing to build the 777x,” states the letter drafted by Los Angeles County Supervisor Don Knabe.
Still, Long Beach is up against some steep competition. Some “right-to-work” states, such as Alabama, Utah and South Carolina (where aerospace workers are nonunion), among others, have already put together bids. California, marred by a reputation of being union-friendly and overburdened with state regulations, has yet to release any plans.
South Carolina, which is building the Dreamliner 787, has issued $85 million in municipal bonds to provide financial incentives that would go toward the 777x contract if selected, according to the national news website Bloomberg.com . Washington, which is still in the running, has offered up nearly $9 billion in incentives, according to the Washington Post.
Long Beach Mayor Bob Foster said during the Council meeting this week that he has been in ongoing “active communication” with Gov. Jerry Brown on working with regulatory agencies to come up with a financial-incentive package.
At a Council meeting on Nov. 19, however, Foster said the governor wouldn’t release any plans until Boeing officially requests a competitive solicitation.
“I think [the governor is] being respectful of the company to make its decision,” Foster said. “Quite frankly, from a business standpoint, that’s a very smart thing to do.”
The mayor added that the City should handle the bid process in a “professional” manner, adding that he’s taking the lead from the governor’s office.
Despite criticisms of California’s reputation, local union leaders say Long Beach is still a “frontrunner” in the race for the 777x work that would bring with it thousands of jobs.
“Many pundits have noted that there’s no way anyone is going to put a project like that in overregulated, high-cost California,” said Stan Klemchuk, president of the United Aerospace Workers (UAW) Local 148, during the Council meeting last month. “Well, we beg to differ, and we believe there are many reasons as to why this 777x should come to Long Beach.”
Klemchuk pointed out that Long Beach has the existing infrastructure to handle the commercial-airline production, though some buildings may need to be modified. He said the city also has an established supply chain in place, along with an existing “talented workforce” and nearby universities from which to draw new personnel.
One asset that puts Long Beach above the rest is its seaport, which would enable Boeing to easily transport fuselages from Japan, unlike cities in other states that are landlocked, Klemchuk said. Long Beach also has its own airport and ideal weather, he said.
Stating that “time is of the essence,” Klemchuk suggested that Long Beach’s incentive package should include a guarantee that the permitting process is quick, easy and affordable or possibly free. “We also need to give the tax breaks like Washington is offering on construction-related sales taxes,” he said. “That is key.”
Eighth District City Councilmember Al Austin, who once worked for Boeing, said the effort to keep the aerospace company in Long Beach will have to entail forming a “red team,” much like the successful campaign to keep the MD-95, which was renamed the Boeing 717, from going to Texas in the mid 1990s.
“We were successful then, and I think we can be successful now, but it’s going to take a full-court press,” Austin said. “It’s not just going to take the mayor’s office, with all due respect. Each and every one of us are going to have to be involved.”
Boeing representatives have stated that the company is expected to make a decision in the next three to four months on where it will locate the 777x airline-production plant, which would bring 20 to 25 years of employment.
The City Council has meanwhile directed City Manager Pat West to solicit a study on the financial impact that the loss of Boeing– the city’s second-highest employer– would have on the city and the region. Long Beach already has a near 11-percent unemployment rate. Fifth District Councilmember Gerrie Schipske suggested that the Los Angeles County Economic Development Corporation conduct the study at a cost of about $15,000, however the Council agreed to look at other proposals as well.