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Pennsylvania, other states considering bids to host Boeing 777X production

| Thursday, Dec. 5, 2013, 10:42 a.m.

Pennsylvania is among a dozen states considering whether to offer Boeing Co. incentives to move production of its new 777X jetliner out of Washington state, where union members rejected a labor contract that froze pensions.

Gov. Tom Corbett asked Boeing to include Pennsylvania when he heard that the company was seeking proposals, said Steven Kratz, a spokesman for the state Department of Community & Economic Development.

“Any time there is an opportunity to bring new business investment and jobs to Pennsylvania, Gov. (Tom) Corbett is engaged and ready to tout the commonwealth's location, manufacturing heritage and dedicated and skilled workers,” Kratz said.

The state is up against Missouri, Alabama and others pulling together packages to lure thousands of jobs away from Everett, Wash., before a Dec. 10 deadline for proposals set by the Chicago-based plane maker.

“I can tell you that something of that magnitude, which would bring manufacturing and jobs, is something we would pursue aggressively,” said Allegheny County Executive Rich Fitzgerald. He said the county would work with the state and pointed to the airport as “a great” location.

Boeing spokesman Doug Adler in Seattle said on Thursday that the company isn't identifying states it has sent proposals to, but they had to ask and meet basic qualifications to be included in the process.

Alder said Boeing started considering its options in producing the newest 777, including moving some or all assembly out of state, when its proposed contract amendments were rejected by machinists in Washington and Oregon.

After the state proposals are received next week, Boeing “will look all things over and make our decision early next year,” Alder told the Tribune Review.

Boeing is looking for a location for parts fabrication, fuselage build, joining, assembly, paint and delivery of the 777X airplane, the company said. It will look for a site to make and assemble the plane's composite wing, Alder said.

Many states can be considered for such work. “We have a supply chain with suppliers across the country and the world with proven methods of delivering parts,” Alder said. “For the 737 that is assembled in Renton, Washington, its fuselage comes by train from Wichita, Kansas, halfway across the country.”

Frank Gamrat, an economist and senior research associate for the Allegheny Institute for Public Policy in Castle Shannon, said Pennsylvania hasn't had much success in the past bidding on such high-profile projects.

Names of companies such as Volkswagen and Sony, which occupied and then left a massive plant in New Stanton, and US Airways, which may leave its control center in Findlay, come to mind, he said. But the state hasn't become involved in such deals much in recent years, he said.

“This is very uncharted territory, and the question is what do we have to give up to get them?” he said. “They will have to be very careful.”

With Corbett up for re-election, “it may be political, but all governors have their people out looking to attract or keep jobs and companies,” he said. Even so, “picking winners and losers in economic development is a terrible strategy.”

Boeing employs 6,200 in Pennsylvania, mostly in the Philadelphia area, where its Boeing Vertical Lift unit has its headquarters and manufactures the H-47 “Chinook” heavy-lift helicopter for the Army and international buyers, and the fuselage and systems for the V-22 “Osprey” tiltrotor aircraft.

Boeing subsidiary Argon ST has a manufacturing and design center in Uniontown that operates an acoustic test facility. Boeing said it does business with 700 suppliers in the state.

David Taylor, executive director of the Pennsylvania Manufacturers Association in Harrisburg, said that “while state incentives are going to be part of the equation that would make Boeing want to expand in Pennsylvania, competitiveness is the other part.

“The fundamentals of keeping jobs here can only be addressed in Harrisburg — taxes, regulation and other factors,” he said. “The competition among the states is something all lawmakers need to keep in mind.”

Missouri Gov. Jay Nixon, a Democrat, called a special session of the general assembly this week with the goal of pushing through $150 million in annual economic-development sweeteners targeted at Boeing. Bentley met with Boeing representatives in Birmingham last month about the prospect of producing its 777X passenger jet in Huntsville and expanding the company's presence there.

Production of the 777X is to begin in 2017, according to the company's website.

Bloomberg News and Trib Total Media staff writer Alex Nixon contributed to this report. John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or joravecz@tribweb.com.

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