Stimulus dollars boost Hanford employment

Federal stimulus dollars are pouring into the Hanford clean-up, creating about 2,500 jobs for the Tri-Cities.

Sen. Patty Murray recently visited the Volpentest HAMMER Center at Hanford to see how some $1.96 billion in stimulus funds is being spent. District 751 Members who work at Hanford train there.

The stimulus allocation has roughly doubled the $2 billion annual budget for cleaning up Hanford, which still contains great amounts of nuclear waste from the Cold War, when it was one of the nation’s prime suppliers of atomic material for nuclear warheads. So far, about $224 million of the stimulus dollars have been spent. It’s intended to last for about two years, and estimates are that the stimulus will create 4,500 full-time jobs before the money runs out.

Among those who’ve added jobs is contractor CH2M Hill, which has doubled the size of its Hanford workforce and continues to hire. 

“We have created jobs,” John Lehew, the president in charge of the Company’s Hanford operations told the Tri-City Herald. “We’re reducing life cycle costs and we’re reducing the overall cleanup footprint of the Hanford site.”

In some respects, the Tri-Cities were lucky compared to most of the nation, when it comes to receiving stimulus dollars, MSNBC.com reports. With the Obama administration putting its emphasis on “shovel-ready” projects, the ongoing Hanford clean-up was a natural for receiving stimulus money – in most cases, the government merely extended already-existing contracts.

The hiring at Hanford has spilled over into the rest of the community, creating demand for retail goods and leading to a tight market for rental housing. The result? Benton and Franklin counties had some of the state’s lowest unemployment rates in October, at 5.7 and 6.3 percent, respectively. The statewide average was 9.3 percent last month, and nationwide, joblessness was at 10.2 percent.

Hanford employment is expected to peak in 2010.

 

Air India defers jets; Boeing talks with Thai

Air India is pushing back delivery dates on 30 787s and 777s, in a cost-cutting move.

The airline also says it will lease out three ultra-long-range 777-200LRs that Boeing recently delivered to it.

The deferals are part of a cost-cutting plan that will save Air India about $322 million, according to The Hindu newspaper. Air India was scheduled to take three 777-300ERs starting next year, and was set to take the first of its 27 787-8s in April 2011.

The planes were all part of a 68-jet order that the state-run airline placed in December 2005. The deal was valued at $11 billion at list prices at the time, although its actual value probably was more like $7.8 billion, after discounts.

Airbus also has been dealing with customer deferals. On Tuesday, US Airways also announced it will defer delivery of 54 Airbus jets – A320s and A330s – until at least 2013, a move that will save it $2.5 billion in the short term. US Air also said it would push back delivery of its first A350XWBs from 2015 to 2017.

All these deferals could put pressure on Boeing and Airbus production rates in the near term. However, they could also open slots for the handful of airlines that are looking to buy planes right now, such as United Airlines or Emirates.

In other news, Boeing executives say they’re talking with Thai Airways about an order for 777F cargo jets. Thai recently announced plans to launch a new cargo-jet business.

Charleston faces airport traffic mess

Boeing’s plans to expand in South Carolina could cause airline passengers to miss flights out of Charleston.

The Post and Courier newspaper reports that the Charleston County Aviation Authority — which operates Charleston International Airport and owns the land that Boeing is building on — is struggling to rework the traffic flow around the Boeing factories. The issue — workers commuting to and from the Boeing and Global Aeronautica factories use the same road that passengers headed to the Charleston International terminal. (Here in Puget Sound, past Boeing executives were smart enough not to put any factories at Seattle-Tacoma International, and instead located factories at secondary airports that have suitable runways. Charleston doesn’t have suitable secondary airports.)

That’s going to make serious traffic jams for people trying to get to the airport at shift changes, airport authority Chairman David Jennings said. “How do we get people to the terminal without having them sit in traffic for an hour?” he told the newspaper. “As we got closer to the Boeing announcement, we began telling people at the state that somebody has to do something about our roads because we can’t manage everything we have now, plus 3,800 more people.”

The Company’s solution is to propose that local governments pay for building a new freeway exit just for Boeing workers to enter and exit the site. Complicating matters, Boeing is also telling the airport managers that it wants to build its new 787 factory on top of an existing street, which will mean shifting that road to the east.

Boeing executives expect to have all the site work completed, new factory built and a new workforce recruited, hired and trained so they can start delivering three 787s a month from Charleston by 2012. Meanwhile, the Company plans to build seven Dreamliners a month in Everett, where it already has room inside the World’s Largest Building (by Volume) to locate a second 787 production line, and where it already has permits pre-approved for any likely future expansions.

Carolina governor faces 37 ethics charges

Reports out of South Carolina say that Boeing CEO Jim McNerney’s personal friendship with the wife of South Carolina Gov. Mark Sanford may well have been a factor in the Company’s decision to locate a second 787 production line in Charleston.

Now — just days after welcoming Boeing to his state – Gov. Sanford faces 37 charges that he used his office for personal gain. It’s now up to the state’s Attorney General to decide whether to take the governor to court, where he would face fines of up to $74,000, plus the likelihood that the verdict would be used against him by a legislative impeachment panel that will meet this week.

According to the allegations made by the state Ethics Board, Sanford:

• Used state aircraft for personal business, including a 150-mile trip for a haircut, a 300-mile round-trip to attend a son’s sporting event, a family outing to West Virigina, and other in-state trips so that he and/or members of his staff could attend birthday parties, book signings, Republican Party events and the opening of a rock n’ roll theme park;
• Bought business-class tickets for himself for 15 international flights he took between 2005 and 2009, in violation of South Carolina laws mandating that state employees take the cheapest flights possible — one of these was the much-ballyhooed trip to Brazil and Argentina where he met up with his mistress;
• Likewise, Sanford bought first-class tickets for himself for flights to Atlanta and New York, in violation of the same rules;
• Improperly used campaign funds to pay for personal expenses, including a hunting trip to Ireland.

Sanford’s lawyer has vowed to “answer” the allegations, and said that none of them should be considered an impeachable offense.

Meanwhile, Jenny Sanford — whose family connections with McNerney reportedly were so helpful as South Carolina wooed Boeing — isn’t sticking around. She’s endorsed another Republican candidate to replace her husband as South Carolina governor, and the Associated Press reports that she and her four children have moved out of the govnernor’s mansion

Boeing woos United, but Ryanair isn’t happy

United Airlines is expected to place an order for 25 long-range 787s or A350s before the end of the year, the Chicago Tribune reports.

The airline is being “furiously courted” by both Boeing and Airbus, the newspaper reports, citing unnamed industry insiders.

Meanwhile, another long-time Boeing customer — Ryanair CEO Michael O’Leary — is just furious over the way he’s being treated by the Company, and is threatening to stop buying planes unless he gets a better deal before year’s end.

First, United Airlines.

Earlier this year, the airline announced plans to come in the market in a major way, with an order for up to 150 planes. United’s weak balance sheet made many doubt whether they were serious, but it now appears that they’ve been able to line up financing and are seriously shopping, hoping to strike bargains for taking airplanes originally scheduled to go to airlines that now would prefer to wait to take deliveries.

Insiders told the Tribune that United wants to order 25 long-range widebodys now — with options on up to 75 more — and then come back next year with a tender for single-aisle planes to replace the 96 757-200s it now operates. A firm order for 25 787s would be worth about $4.2 billion at list prices – or about $3.1 billion after what analysts say are typical discounts. Replacing the 96 757s with similarly-sized 737-900ERs would cost about $7.8 billion at list prices, or maybe $5.2 billion after discounts.

Historically, Airbus has cut better deals than Boeing (Boeing complains that’s because of the illegal subsidies Airbus gets), and analysts are telling the Tribune that Team Toulouse could have the advantage on price again. Airbus also would dearly love to get a second American carrier to buy its A350-XWB. So far, only US Airways has done so.

For Boeing, it’s more a matter of prestige, they say: are Boeing executives in Chicago willing to let Airbus do a deal an airline whose headquarters is only a few blocks away?

But money is an object for Boeing as well. As you probably heard, the Company broke ground on its ill-conceived South Carolina expansion today. The Company also made headlines in financial markets this week when it issued $1.2 billion worth of corporate bonds — essentially going out and borrowing that much cash, to help cover cost over-runs and penalties caused by the delays to the massively outsourced 787. To pay back that debt — and to pay the estimated $1.5 billion analysts say it will spend to duplicate its existing Puget Sound facilities in Charleston — Boeing needs cash flow, which means it needs this deal.

O’Leary, the Ryanair chief, also seems to think Boeing should be motivated to cut prices and sell planes. But this week he said he’s this close to throwing up his hands and walking away from a potential order for 200 737s, after months of discussions.

If Boeing doesn’t make a better offer by the end of November, it’s off, O’Leary told reporters. “I am not wasting another Christmas holiday trying to talk to guys in Seattle,” he told Reuters. The Irish Independent also reported that O’Leary says it’s “highly unlikely” that a deal will get done.

Ryanair now operates a fleet of 202 737-800s, and as of October, had another 110 on order. A deal for 200 more ‘Three-Sevens would be worth about $15.3 billion at list prices, but analysts say Boeing typically discounts 737 orders by about 30 percent, or even higher for its best customers, making it about a $10 billion deal.

O’Learly has been public about his frustration with Boeing management all this fall. Earlier, he hinted that Boeing managers seemed obsessed with their 787 problems and unable to focus on doing business with him.

Add $5 million to Airbus tanker bid, Dicks says

Airbus received $5 billion in illegal launch aide to build 1,000 A330s, so the Pentagon should tack on an additional $5 million per plane to the Airbus/Northrop Grumman tanker bid, Congressman Norm Dicks says.

This $5 million-per-plane duty would help “neutralize” unfair advantages Airbus got from European governments, Dicks said Wednesday. ”This subsidy has enabled Airbus to finance the development of this aircraft at a significantly lower cost.”

Boeing’s backers in Congress continue to push the Air Force to make the World Trade Ogranization’s ruling that Airbus received illegal subsidies one of the factors it considers as it evaluates tanker bids. The International Association of Machinists & Aerospace Workers supports that position.

Charleston holds secret talks on more Boeing give-aways

Local officials in South Carolina are holding secret talks to negotiate even more corporate welfare for the Boeing Co.

The Charleston County Council is planning to exempt Boeing from paying property taxes on its new 787 final assembly building, in exchange for paying a fee. The county’s also planning to issue bonds to pay for site improvements. But when asked about the size of the fee and the bonds, Council members refused to let taxpayers know how much they’ll be subsidizing Boeing, The Post and Courier in Charleston reported.

“If I say too much, it becomes a problem,” Council member Elliott Summey told the paper.

South Carolina taxpayer advocates already have complained that the state’s governor and Legislature haven’t been forthcoming about the total size of the tax hand-out Boeing extorted from them in exchange for the second 787 manufacturing line. This is just ore of the same bad governance, the South Carolina Policy Council says.

“Because South Carolina taxpayers are the who ones who will be picking up the tab for Boeing’s incentives, it only seems fair that these same South Carolina taxpayers have some idea of what it is they’re being saddled with before the deal is inked,” the Policy Council said Wednesday. “Lawmakers, both at the state and local level, seem to feel differently.”

District 751 President Tom Wroblewski says it’s clear now that Boeing only pretended to hold talks with the Machinists Union toward a long-term contract in order to put pressure on South Carolina lawmakers to come up with an even-more lavish tax handout. The talks were “merely a ploy to extort more money out of South Carolina taxpayers,” he said.

And it worked. Based on what’s been disclosed so far, it seems that ’”for the money we’re paying Boeing, we could come close to eliminating corporate taxes for all South Carolina businesses,” said Ashely Landess, the South Carolina Policy Council’s president. “That kind of economic stimulus benefits the entire state and has a real impact on unemployment.

“Boeing’s decision to expand in South Carolina is good news,” said Landess said.  “Unfortunately, South Carolina taxpayers will have to pay them to do it.”

Washington announces new aerospace push

Washington state has opened a new “Aerodesk” in London to help the state’s aerospace suppliers capture more European contracts — and to recruit European companies to do more work in Washington.

That’s one of the stories reported in the first edition of the Washington State Quarterly Aerospace Bulletin, a new publication of the Washington Department of Commerce.

The new Aerodesk opened for business in July, and plans to send representatives to air shows in Europe, including the recent Airtec 2009 conference in Frankfurt and the upcoming Aerosolutions 2009 conference in Bordeaux, France. Its goal is to “identify B-2-B and joint venture opportunities, sales channels and sales representatives,” while also assisting European companies that are “considering a more permanent presence in Washington” by providing them with “access to legal information, site selection options, customized incentives and business network introductions.”

In addition to the work in Europe, the newsletter also reports that the state Commerce Department is ”actively working to develop supplier opportunities” for Washington state companies interested in winning work on the new Chinese airline initiative, the Comac C919.

Washington is the heart of the U.S. aerospace industry, the newsletter notes. In 2008, there were 88,000 Washington residents working in the industry, producing $33.8 billion worth of goods and services.

IAM Members get jets back on track

Working over the weekend, District 751 Members in Everett completed work on the “side-of-body” fix to two more 787s.

The Boeing Co. now has three Dreamliners that have received the repairs — two of them intended to fly, and one of them to be used in ground-based “static testing.” Similar work on the first plane was finished last week.

The work was demanding and required great skill. Machinists in Everett crawled inside the wings of the 787 to install reinforcements at 34 locations along the area where the wings connect to the fuselage of the planes. The reinforcements were pieces of titanium machined by District 751 workers in Auburn.

The fix is intended to solve structural weaknesses found during testing in June, after the Everett workers put together wing and fuselage sections that Boeing had outsourced to suppliers. That resulted in the latest, six-month delay to the first flight of the 787.  

Boeing’s plan now is to complete ground-based testing  of the reworked wing-to-body connection before the end of November, and to take the first Dreamliner on its maiden flight before year’s end, according to 787 vice president Scott Fancher. ”We are building momentum with each milestone we achieve,” he said. “This team is focused on its goals and bringing us ever closer to first flight.”

While the 787 team was hitting that milestone, their Union Brothers and Sisters on Everett’s 747 line achieved one of their own — rolling out the first 747-8 last week.

The plane left the factory Thursday, headed for the Everett paint hanger. After that, it will be prepped for flight testing, which is scheduled to start in early 2010. The plane eventually will be delivered to launch customer Cargolux.

Albaugh: No rate cuts for Renton

Airlines aren’t announcing orders at this year’s Dubai Air Show, taking some of the luster off what has become a major industry event.

But new Boeing Commercial Airplanes chief Jim Albaugh did have one piece of important news for District 751 Members — Boeing plans to continue producing 737s at the current record pace.

“We don’t anticipate that we are going to be down from the 31 (per month) we are at today,” he told Reuters. That should quash some rumors that Boeing was planning single-aisle rates cuts in the new year.

Overall, Boeing plans to produce and deliver about as many jets in 2010 as it will this year, Albaugh said. (That’s between 480 and 485.)

Otherwise, it’s been a slow air show. So far, only Airbus has announced any new business: a 10-jet deal with Yemenia Airlines with a list price value of $700 million. (The airline’s probably paying closer to $455 million for the 10 A320s, after discounts.)

Both Boeing and Airbus are talking with Emirates about an order for “tens” of mid-size widebodies, either A330s or 777s. Emirates CEO Tim Clark told Dow Jones that both jet-makers will have delivery slots open in 2011 that Emirates could fill, and added that it “won’t be long” before the airline decides who it will order from.

Boeing at the air show has been mostly talking about prospects for the future. Albaugh said the Company is already seeing an uptick in demand for air freight, but passenger numbers are likely to remain flat into 2012. Don’t expect a surge in new passenger jet orders until 2013-14, he said.