The Voice for Industry
January 14, 2010

Ode to the 737

Our award for 2009's Best News Story That Almost No One Heard Of goes to the employees of The Boeing Company.

In 2009, while the region was deluged in news about the Great Recession, 787 set backs and the decision to expand into South Carolina, production teams at Boeing cranked out 481 commercial jetliners.

It was Boeing's largest aircraft production year since 2001. Deliveries were up 28% over strike impacted 2008, up 9% over 2007 and 71% over 2003, the most recent aircraft production low point.

This did not mean Boeing had a profitable year. Penalties for 787 delays and other problems helped shred the bottom line. But few things are better for our regional economy than a strong Boeing production year, and however awful your 2009 was, odds are it would have been worse if so many airplanes weren't rolling off local assembly lines.

According to Washington state tax records, aircraft manufacturing produced gross business revenues of nearly $20 billion in the first half of 2009. That was up 10% from the pre-strike first half of 2008. Aircraft also accounted for more revenue than the combined totals for all Washington state companies engaged in banking, real estate, insurance, telephone service, telecommunications, legal services, accounting and department stores ($18 billion).

Aerospace industry analysts are fairly gloomy about the production year ahead because most of the airplanes built today were ordered well before the financial meltdown. Worse, some say 2009 production was artificially stimulated by government programs to finance airplane purchases both in the US and in Europe.

But, enough negativity. It takes a lot of effort to build 481 jet liners in a period of 12 months, so let's give the production level the praise it deserves and take a moment to appreciate what it tells us about some big points that got lost in the news about South Carolina.

Boeing today possesses a record backlog of 3,375 airplane orders and because of the projected growth in world air travel, Boeing believes the world may need more than 29,000 new airplanes over the next 20 years.

Seattle Industry possesses absolutely no inside knowledge regarding Boeing's corporate approach to all this, but we suspect one goal is to make as much money as is humanly possible, and for our money that will mean building thousands if not tens of thousands of new airplanes right where they're built today, namely within 40-minutes driving time of the Space Needle.

How can we make such an assertion, given the decision to head south to Carolina?

Well, look at the numbers. According to the press releases, if the new assembly line in South Carolina comes together as planned, Boeing hopes the Carolinians will be able to build 3 Dreamliners a month by 2013. That's "three" airplanes per month.

In 2009, Boeing employees in Washington turned out three airplanes every two days.

Carolina may possess growth potential, and it might become an important asset in the Boeing family feud over labor relations, but if, as or after Carolina grows, Boeing will need to keep building hundreds of airplanes every year to keep up with global demand and our region remains the only place in the world where Boeing has the industrial capacity to help achieve that type of production.

This should be reassuring, but it is not a reason for complacency.

To build hundreds of airplanes in our region every year, people and goods must be able to flow between Renton, Everett and Boeing Field. We also need an on-going supply of highly skilled workers. Sounds simple enough, but our public processes for meeting these basic transportation and workforce needs are far from optimal. But, those are topics and challenges for another day.

We'll conclude this report in an upbeat mode and with a brief Ode to the 737.

Many of us might be awed by the 747, admire the 777, and remain hopeful for the fuel efficient future of the 787. But, the past, present and future of Washington state aircraft manufacturing remains pretty firmly tied to that good old reliable, the 737.

The single-aisle jet was first built in 1967 as part of the program to replace the historic 707 and as the 737 advances deeper into its fifth decade of production, it remains a linchpin to Boeing plans for the future.

Of the 481 airplanes completed by Boeing employees in 2009, 372 of them were 737s. That was 77% of the total. The model also accounts for nearly 62% of Boeing's record backlog and the 737 or an airplane much like it is expected to account for about two thirds of the 29,000 new airplanes needed over the next 20 years.

The larger wide-bodied jets might appeal more to the imagination, but the 737 is much better suited to serving the relatively short direct flights that are expected to grow so dramatically with the rise in world-wide air travel.

The wide bodied jets from Everett tend to make the news while Renton just makes airplanes, and in 2009, our region was lucky Renton made so many of them.

Keeping Freight Moving During Major Transportation Disruptions

Washington will implement the Commercial Vehicle (CV) pass system when major truck freight highways are closed or severely restricted and a limited capacity highway detour is available. CV passes will be issued based on the highway detour's capacity and the priority of goods carried.

You are invited to attend an informational briefing on Washington State's new Commercial Vehicle Pass system:

- Wednesday, January 20: 1 - 3pm at the WSDOT South Central Region Headquarters, 2809 Rudkin Rd, Union Gap, WA

- Thursday, January 21: 10:00 am - 12:00pm at the WSDOT Northwest Region Headquarters, 15700 Dayton Ave. N., Shoreline, WA

- Friday, January 22: 1 - 3pm at the WSDOT Southwest Region Headquarters, 11018 NE 51st Circle, Vancouver, WA

- Wednesday, February 3: 1 - 3pm at the WSDOT Eastern Region
Headquarters, 2714 North Mayfair St., Spokane, WA

Keeping freight moving during major transportation disruptions is key to supporting the state's economy and jobs, and to ensure that our citizens' essential needs are met. The Washington State Department of Transportation (WSDOT), in partnership with the Washington State Emergency Management Division (EMD) of the Washington Military Department, Washington State National Guard and the Washington State Patrol (WSP), have developed a new Commercial Vehicle Pass system that will support the state's emergency responders, citizens' needs, and the economy by safely and efficiently authorizing emergency, essential and other goods delivery to and through affected areas during a highway disruption of two to seven days duration.

When the new CV pass system is operational in 2010 and a highway disruption occurs, shippers and trucking companies will be able to request and receive CV passes on-line. The CV pass will be affixed to the truck cab window and used to authorize entry onto detours at highway checkpoints.

To learn more about the new Commercial Vehicle Pass system and try out the online system, please RSVP to Joy Dopita indicating which briefing session you plan to attend, your company name, representative's name and email address, by January 18.

If you cannot attend a briefing session, look for more information to be distributed through the WSDOT freight notification system and the Washington Trucking Association.

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Markey Machinery - Honest to Goodness Greenies
Green Shoots Finally
Meet Dan Satterberg
Big Rate Hike?

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