Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
MrBretz
Topic Author
Posts: 601
Joined: Tue Jun 14, 2016 9:13 pm

Boeing Real Estate Sell Off in Puget Sound Region

Tue Apr 06, 2021 4:53 pm

Here's an article by Dominic Gates about Boeing shrinking in WA state. It has numbers on staff reduction and building sell offs. It also mentions the new airplane is 3 to 4 years out and Boeing will not make a commitment to where it will be built.

https://www.seattletimes.com/business/b ... e-seattle/
 
JayinKitsap
Posts: 2510
Joined: Sat Nov 26, 2005 9:55 am

Re: Boeing Real Estate Sell Off in Puget Sound Region

Tue Apr 06, 2021 5:11 pm

This is round 1, round 2 will include several buildings and land around Boeing Field.

All part of Boeing getting leaner, they had a lot of staff and buildings that need to be removed from overhead. The Everett plant will soon only have 767 and 777 production, the 747 and 787 spaces are coming available as those lines shut down.
 
User avatar
Revelation
Posts: 26299
Joined: Wed Feb 09, 2005 9:37 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Tue Apr 20, 2021 2:37 pm

Now it seems they are selling the Dreamlifter facility at PAE to FedEx:

Seems to be yet another sign that they don't see themselves doing new projects at PAE.

Also:

In addition to abandoning the Dreamlifter center, Boeing has already transferred to South Carolina all the tooling for making the smallest Dreamliner model, the 787-8.

A Boeing spokesperson said Monday this was done following the end of local 787 final assembly work in February.

Until then, the North Charleston assembly plant had built only the larger 787-9s and 787-10s.

Ref: https://www.seattletimes.com/business/b ... er-center/
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
iamlucky13
Posts: 1426
Joined: Wed Aug 08, 2007 12:35 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Tue Apr 20, 2021 6:08 pm

Revelation wrote:
Now it seems they are selling the Dreamlifter facility at PAE to FedEx:

Seems to be yet another sign that they don't see themselves doing new projects at PAE.


At least not projects involving a lot of 747 Dreamlifter flights. PAE does still have a lot of existing space becoming available soon, an experienced assembly workforce that history has proven is difficult to quickly replicate elsewhere, and proximity to the engineering workforce that is arguably the most difficult to relocate asset Boeing has.

If the NMA team is putting a lot of effort into defining the production system architecture prior to launch as has been previously discussed, then Boeing should have a good idea whether any large structures might be produced at a different location from final assembly.

Based on that, I see a few possible interpretations:


1) PAE is not being considered for NMA.
2) It is more cost effective to be paid by FedEx for the current buildings, cease lease payments to the airport and maintenance costs, and build a new operations center later.
3) Fuselage and wing fabrication will both occur at the final assembly site.
4) Part transportation will not be dependent on the Dreamlifters - rail or water-born transportation has been determined viable instead.

Edit - fixed list. BB Code ordered list is not working.
Last edited by iamlucky13 on Tue Apr 20, 2021 6:19 pm, edited 4 times in total.
 
Noshow
Posts: 2503
Joined: Wed Jun 15, 2016 3:20 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Tue Apr 20, 2021 6:17 pm

If the NMA would be built at Charleston they would need the Dreamlifter facility to move their CFRP wings from Everett to Charleston. So does this indicate they will finally build the NMA at Everett? I'd say the NSA would make sense to be build there as well.
 
jbs2886
Posts: 3138
Joined: Wed Apr 01, 2015 9:07 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Tue Apr 20, 2021 6:25 pm

iamlucky13 wrote:
1) PAE is not being considered for NMA.
2) It is more cost effective to be paid by FedEx for the current buildings, cease lease payments to the airport and maintenance costs, and build a new operations center later.
3) Fuselage and wing fabrication will both occur at the final assembly site.
4) Part transportation will not be dependent on the Dreamlifters - rail or water-born transportation has been determined viable instead.


I wouldn't think (1), at best the NMA or whatever is years away and that is millions of dollars in expense for Boeing. Further, we don't know if other logistics may be possible and more economic (as you note).

I'm hoping the sheer space Boeing has at Everett will mean the new aircraft will be there, but never know.
 
User avatar
ssteve
Posts: 1504
Joined: Fri Dec 02, 2011 8:32 am

Re: Boeing Real Estate Sell Off in Puget Sound Region

Tue Apr 20, 2021 6:40 pm

You'd think they'd want to keep unnecessary risks low for a new program, and you can't convince me that a greenfield facility will do that if it's not within a short drive of an existing one.
 
iamlucky13
Posts: 1426
Joined: Wed Aug 08, 2007 12:35 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Tue Apr 20, 2021 7:04 pm

ssteve wrote:
You'd think they'd want to keep unnecessary risks low for a new program, and you can't convince me that a greenfield facility will do that if it's not within a short drive of an existing one.


That's my viewpoint as well, although it seems like upper management's appreciation of the level of risk presented by a new production site and separation from the engineering workforce has varied over time.

In the aftermath of all the trouble they had getting the Charleston 787 final assembly line running smoothly, it looks like even with a second line serving as a prototype, there were billions of dollars worth of risks.

I hope the significance of that lesson has not been diminished over time.
 
SteelChair
Posts: 1617
Joined: Fri Aug 25, 2017 11:37 am

Re: Boeing Real Estate Sell Off in Puget Sound Region

Tue Apr 20, 2021 7:09 pm

Hardly surprising. More than likely the first of many more downsizing events to follow. I love the reassuring language from the corporate shill, exactly what one would expect. They'll remain committed to Puget Sound....right up until they aren't. People said Detroit was too big to fail in the 50a and 60s. All companies have to compete, all states and cities have to compete. There is probably a contingent of folks in the PS area that would rather concentrate on Amazon and Microsoft anyway, what is the word they use for the USA now......oh yes, "postindistrial."
 
Noshow
Posts: 2503
Joined: Wed Jun 15, 2016 3:20 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Tue Apr 20, 2021 7:20 pm

They have a super developed infrastructure in WA with production, management, research and suppliers aligned and then instead of harvesting what they have they move to new places? Is this intended to milk WA for new tax reductions again or are they serious about shrinking even more? Do they want to move to SC with everything? How expensive is this going to be?
In the not so distant future a lot will change with aircraft manufacturing with big investments needed. Keeping the well established infrastructure going might not be wrong. There will be enough risks and costs coming. Keep the powder dry for the best products.
 
User avatar
ssteve
Posts: 1504
Joined: Fri Dec 02, 2011 8:32 am

Re: Boeing Real Estate Sell Off in Puget Sound Region

Wed Apr 21, 2021 4:04 pm

They'll still have a lot of FAL space in Renton and Everett, and a lot of other stuff at Boeing Field.

To a large extent-- like previously selling land around Renton-- they're exchanging property tax bills for cash, and you can't really read all that much into the real estate moves presaging anything at all.
 
Noshow
Posts: 2503
Joined: Wed Jun 15, 2016 3:20 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Wed Apr 21, 2021 8:36 pm

If they think they own too much land they should found some real estate subsidiary and only rent and lease out their land to milk it and keep it at hand if needed.
 
ScottB
Posts: 7417
Joined: Fri Jul 28, 2000 1:25 am

Re: Boeing Real Estate Sell Off in Puget Sound Region

Wed Apr 21, 2021 10:37 pm

Noshow wrote:
They have a super developed infrastructure in WA with production, management, research and suppliers aligned and then instead of harvesting what they have they move to new places? Is this intended to milk WA for new tax reductions again or are they serious about shrinking even more? Do they want to move to SC with everything? How expensive is this going to be?
In the not so distant future a lot will change with aircraft manufacturing with big investments needed. Keeping the well established infrastructure going might not be wrong. There will be enough risks and costs coming. Keep the powder dry for the best products.


I don't think Boeing wants tax breaks again from Washington State; those were the basis for Airbus's complaint to the WTO. But it wouldn't be a huge surprise if they were to shift manufacturing to a state without a B&O tax or weaker support for unions.

If they're planning to use 787-style production systems for future programs, then the established infrastructure in WA isn't as important. Might as well rip off the bandaid if Puget Sound is becoming uncompetitive for manufacturing.
 
GSPSPOT
Posts: 2621
Joined: Thu Sep 11, 2003 1:44 am

Re: Boeing Real Estate Sell Off in Puget Sound Region

Wed Apr 21, 2021 10:41 pm

It may be good business, but Boeing was THE company deeply associated with Seattle/Washington State pre-Microsoft. So very sad to see that part of the region's history wither away. That whole region has changed way too much for my taste since the 90s. I used to love it so.
Great Lakes, great life.
 
luckyone
Posts: 3966
Joined: Thu Aug 21, 2008 1:50 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Wed Apr 21, 2021 11:44 pm

ScottB wrote:
I don't think Boeing wants tax breaks again from Washington State; those were the basis for Airbus's complaint to the WTO. But it wouldn't be a huge surprise if they were to shift manufacturing to a state without a B&O tax or weaker support for unions.

Ultimately only Boeing accountants know this for sure, but I would wager that the B&O tax is a talking point for lip service only. The Washington B&O tax rate is 0.484%. Washington does not tax corporate profits nor personal income tax (South Carolina does, have fun with that if you relocate there from Washington with a high dollar Boeing salary). They do, however, tax gross receipts. So does the State of Texas (and Nevada and Ohio for that matter), which doesn't appear to be stopping companies from relocating there in droves, including manufacturers such as Tesla and Toyota (though I don't believe Toyota operates any manufacturing capacity in Texas, but Tesla certainly does). South Carolina taxes corporate profits at 5%, and Boeing's corporate headquarters is located in Illinois, which can tax profits as high as 9.5%, assuming that there isn't some deal being struck with either state. So long story short, this isn't about state taxes.

Property taxes, on the other hand, may be a more likely culprit. As the Puget Sound area has grown, property values have gone up with that growth--though Everett is a rather dumpy area in my opinion and its real estate values are comparatively lower to the areas around it, which could mean its ripe for investment. A manufacturing facility surrounded by ever-growing real estate resulting in relocation of said manufacturing facility is not a new scenario. We've been watching manufacturing jobs flow like water from higher to lower cost areas. This, coupled with Washington's unionized work force are much more likely influence Boeing's departure from the Puget Sound than any tax levied on Boeing's profits. It will be interesting to see what happens to the Charleston area after 40 years of growth
 
Noshow
Posts: 2503
Joined: Wed Jun 15, 2016 3:20 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Thu Apr 22, 2021 7:10 am

So it has to be cheap. Mhhh.
Why not move everything to Boeingladesh then?
 
traindoc
Posts: 363
Joined: Thu Mar 06, 2008 11:35 am

Re: Boeing Real Estate Sell Off in Puget Sound Region

Fri Apr 23, 2021 12:21 am

Toyota does indeed manufacture vehicles in Texas. Their Tundra PU truck is exclusively manufactured in San Antonio.
 
BoeingGuy
Posts: 6566
Joined: Fri Dec 10, 2010 6:01 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Fri Apr 23, 2021 12:55 am

luckyone wrote:
ScottB wrote:
I don't think Boeing wants tax breaks again from Washington State; those were the basis for Airbus's complaint to the WTO. But it wouldn't be a huge surprise if they were to shift manufacturing to a state without a B&O tax or weaker support for unions.

Ultimately only Boeing accountants know this for sure, but I would wager that the B&O tax is a talking point for lip service only. The Washington B&O tax rate is 0.484%. Washington does not tax corporate profits nor personal income tax (South Carolina does, have fun with that if you relocate there from Washington with a high dollar Boeing salary). They do, however, tax gross receipts. So does the State of Texas (and Nevada and Ohio for that matter), which doesn't appear to be stopping companies from relocating there in droves, including manufacturers such as Tesla and Toyota (though I don't believe Toyota operates any manufacturing capacity in Texas, but Tesla certainly does). South Carolina taxes corporate profits at 5%, and Boeing's corporate headquarters is located in Illinois, which can tax profits as high as 9.5%, assuming that there isn't some deal being struck with either state. So long story short, this isn't about state taxes.

Property taxes, on the other hand, may be a more likely culprit. As the Puget Sound area has grown, property values have gone up with that growth--though Everett is a rather dumpy area in my opinion and its real estate values are comparatively lower to the areas around it, which could mean its ripe for investment. A manufacturing facility surrounded by ever-growing real estate resulting in relocation of said manufacturing facility is not a new scenario. We've been watching manufacturing jobs flow like water from higher to lower cost areas. This, coupled with Washington's unionized work force are much more likely influence Boeing's departure from the Puget Sound than any tax levied on Boeing's profits. It will be interesting to see what happens to the Charleston area after 40 years of growth


A lot of time I feel like Boeing uses the Puget Sound as a scapegoat for their mismanagement. Every time they manage poorly, they pull more work out if the area as if to deflect blame.

Same with the big drama over where they were going to move company headquarters to. It was during some production problems and increasing loss of market share to Airbus. So let’s create a big diversionary tactic and deflect attention away from their mismanagement, and put the blame on Seattle.

The main thing wrong with Boeing’s business environment in the Puget Sound has been Boeing leadership’s constant bad management. Not the unions; not the cost of doing business; it’s the constant incompetent and/or corrupt leadership the company has had to sadly endure for so long.

Phil was just a bumbling fool, but I think he meant well. When I say “corrupt”, I mean people like Harry or Jim McNerney who seemed to make decisions based on their own egos or to line their own pockets with money, rather than what was best for the health of the company.

I only partially agree with you that Everett is dumpy. I agree the Casino Road area and Highway 99 areas aren’t the best. But Mukilteo is fairly upscale and the high-rent district. Parts of Everett are also upscale.
 
luckyone
Posts: 3966
Joined: Thu Aug 21, 2008 1:50 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Fri Apr 23, 2021 2:15 am

BoeingGuy wrote:

I only partially agree with you that Everett is dumpy. I agree the Casino Road area and Highway 99 areas aren’t the best. But Mukilteo is fairly upscale and the high-rent district. Parts of Everett are also upscale.

Well, not to dive into the weeds, but Mukilteo is Mukilteo, not Everett, and one of the surrounding areas I was referencing when comparing cost of Everett housing. But yes you are correct, Everett has some nice areas, mostly near the shore with a Sound view.
Last edited by luckyone on Fri Apr 23, 2021 2:17 am, edited 1 time in total.
 
luckyone
Posts: 3966
Joined: Thu Aug 21, 2008 1:50 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Fri Apr 23, 2021 2:16 am

traindoc wrote:
Toyota does indeed manufacture vehicles in Texas. Their Tundra PU truck is exclusively manufactured in San Antonio.

Thanks!
 
luckyone
Posts: 3966
Joined: Thu Aug 21, 2008 1:50 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Fri Apr 23, 2021 2:17 am

Noshow wrote:
So it has to be cheap. Mhhh.
Why not move everything to Boeingladesh then?

Because Boeing has a lot of defense contracts and would likely draw the ire of both parties should they even joke about moving capacity overseas.
 
Noshow
Posts: 2503
Joined: Wed Jun 15, 2016 3:20 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Fri Apr 23, 2021 6:35 am

I was just being sarcastic having supported Boeing to stay at Seattle above.

Even if the management doesn't like unions they should be able to work with them. Like all other manufacturers have to. There must be a way to settle any disputes. This is just the legal framework and no offense against a company. A company that earns a lot of taxpayer money financed orders as well. Taxpayers that work hard and might be union members by the way.
 
LMP737
Posts: 6249
Joined: Wed May 08, 2002 4:06 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Sat Apr 24, 2021 11:39 pm

BoeingGuy wrote:

Phil was just a bumbling fool, but I think he meant well. When I say “corrupt”, I mean people like Harry or Jim McNerney who seemed to make decisions based on their own egos or to line their own pockets with money, rather than what was best for the health of the company.

.


When you really think about it Phil is the reason Boeing is in this mess to begin with. If Phil Condit had taken a pass on the merger with MD there would be no Harry Stoncipher or Jim McCerney.
Never take financial advice from co-workers.
 
frmrCapCadet
Posts: 4883
Joined: Thu May 29, 2008 8:24 pm

Re: Boeing Real Estate Sell Off in Puget Sound Region

Sun Apr 25, 2021 12:15 am

Washington tax base has been reduced enough that it no longer provides enough money for roads, bridges, the U of WA and etc. There are simply too many citizen who are believers in the immaculate conception of infrastructure - it doesn't need taxes, it doesn't need tolls, maybe God will provide, in any event our grandparents and great grandchildren will provide if god fails.
Buffet: the airline business...has eaten up capital...like..no other (business)

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos