Singapore Air Show

Competition Begins for Production Site of Boeing's NMA

 - January 3, 2018, 7:41 AM

Boeing remains at least months away from announcing whether it will build an aircraft to address the perceived gap between its widebody and narrowbody jet offerings. But various public-private consortiums have already begun working to influence the company’s decision about where to build it.

As AIN reported previously, Boeing has opened an office dedicated to studying the concept of a so-called NMA (New Midsized Airplane). The company says in terms of size, the twin-aisle NMA would fit somewhere between the 737-10 and the 787-8 Dreamliner. And if Washington commerce secretary Brian Bonlender gets his way, Boeing will build it somewhere in the Evergreen State.

“We have a very positive story to tell about our relationship with Boeing over the decades,” said Bonlender. “It’s a relationship that’s produced success repeatedly. We’re [Boeing’s] most efficient, least risky, quickest partner-to-profit in the world.”

Bonlender serves as chairman of governor Jay Inslee’s “Choose Washington NMA Council,” which includes the executives of three Puget Sound-area counties, as well as representatives from the International Association of Machinists and the Society of Professional Engineering Employees in Aerospace (SPEEA). One of the three counties is Snohomish, home to the Everett 777X plant. There, executive Dave Somers has formed his own aerospace task force.

“Boeing and our world-class workforce are vital to the prosperity of Snohomish County,” he said in a statement. “We face fierce global competition and need to maintain our position as the aerospace leader of the world. For continued success, we must aggressively work to retain and grow jobs. We cannot afford the risk of losing any business when it comes to our aerospace cluster.”

Beyond Puget Sound

Across the Cascade Mountains, Larry Krauter, CEO of Spokane International Airport and the chairman of the West Plains/Airport Area Development Authority, appears equally determined to land the NMA. With rail construction set for completion later this year extending through the site Krauter hopes to market to Boeing, the Authority sees itself as a viable alternative to the Puget Sound region.

“I do think the chances are better now than before,” Krauter recently told Inlander Magazine, referring to Spokane’s attempt to garner construction of the Boeing 737 Max in 2011. That aircraft, with three variants, now undergoes final assembly at Boeing’s Renton, Washington plant.

Some 3,000 miles from the Renton plant sits the Boeing plant in North Charleston, South Carolina. There, a state agency has been quietly buying up land adjacent to the 787 facility, not far from the flight line where completed Dreamliners await their new owners. Boeing currently leases 450 acres for the Dreamliner campus from Palmetto Railways, a division of the South Carolina Commerce Department. Palmetto last month filed a permit application to acquire 19 additional acres next to the Boeing facility. Already, Palmetto has purchased 263 acres for a possible Boeing expansion. However, Palmetto Railways has since said part of that land is unusable.

But not all potential players in the NMA game hail from the U.S.

Boeing has revealed that, over the past year, it has held talks with Embraer, based in Brazil. The Brazilian newspaper Valor Economico reports the talks do not center on a Boeing takeover of Embraer. Instead, they reportedly involve creation of a “complementary production portfolio, increased sales and service platforms, and new product development,” according to the Brazilian publication.

The question of what Boeing finds appealing about a possible collaboration with Embraer could boil down to a simple matter of lowering its cost base for the NMA, according to aviation analyst Scott Hamilton at the Leeham Group in Bainbridge Island, Washington. “Low-cost labor and low-cost production,” he said. “As Boeing looks at the NMA…when you look at these talks and you consider what Embraer can bring to the table, those two attributes could become prime motivators for Boeing.”

But Hamilton’s counterpart at the Teal Group in Washington, D.C., Richard Aboulafia, believes a Boeing-Embraer partnership on the NMA looks “highly unlikely.”

“The idea they could somehow get a joint venture going and perhaps get Embraer to fund part of it… that’s very unlikely," he opined. "And yet, I’m sure Boeing will hold it out there to get more competitive leverage.”

Still, back in Olympia, the capital of Washington, Bonlender sees his state as Boeing's most viable option. “We’re optimistic,” he told AIN during a recent phone interview. “Because of our work on the 777X, Boeing has the infrastructure and technical expertise they need to build it here.” Bonlender appears especially bullish about the Everett 777X plant because of Boeing’s heavy investment in composites, the tough, lightweight material that makes up much of the 787 Dreamliner and, he believes, will form the backbone of the next Boeing commercial venture.

That, Bonlender adds, is the real reason Boeing will likely choose the Puget Sound region as home for the NMA. “Because of our work on the 777X, Boeing now has [at its Everett plant] the infrastructure and technical expertise to build the wings [and other composite components of the NMA].” To prove his point, Bonlender points to the huge ovens used to cure the composites into aircraft structures on the 777X.

One other factor he believes works in Everett’s favor: Boeing is a different company than it was when it began work on the 787 Dreamliner.

“Unlike in past competitions, there doesn’t seem to be one big thing the company might want [in an NMA partner]," he said. “We don’t foresee requests for new tax incentives or changes in workmen’s compensation rules. There’s a multitude of things that make our workforce and our infrastructure systems better to serve employers and workers.”

But to ensure their competitiveness, Washington state officials will soon embark on a competitive business analysis, looking at how their offerings to Boeing compare with similar aviation offerings from other states. The study alone will cost Washington hundreds of thousands of dollars, according to one state official.

While Bonlender estimated that Boeing remains “six months away” from announcing a decision on whether to build the NMA, he believes it will fly. “It’s likely the company will pursue this aircraft," he said. "They’ve identified the market not served by current models. They’re just trying to figure out how to make the numbers work.”