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Posted 9/08/2015
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Camouflaged Boeing Plant No 2, Tukwila, 1940s
Courtesy Boeing Archive
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Restored 1928 Boeing 40C flying in formation with
Boeing 787, 2010
Photo copyright Ryan Pemberton
Boeing 737
Courtesy The Boeing Company
The Boeing Company, founded in 1916, hit a low point in
1934 when it was forced out of the airline business and
was forced to concentrate on its original airplane -
manufacturing business. The company's fortunes revived
in the buildup to World War II. Thousands of workers
swarmed over Boeing's plant on Seattle's Duwamish
River, making the bombers and fighters that helped win
the war. Employment topped 50,000 by 1944. After the
war Boeing entered the newly lucrative commercial -
airliner market, and the Cold War revived its military
contracts. In the 1950s and 1960s it diversified into an
aerospace company and built missiles and rockets. The
demise of the SuperSonic Transport (SST) program in
1971 resulted in the infamous Boeing Bust, a statewide
economic downturn caused by the loss of 86,000 jobs.
Boeing recovered over the ensuing decades, despite
increasing competition from Europe's Airbus. Meanwhile,
hundreds of other aerospace companies sprang up in
Washington to supply parts. Boeing's headquarters
moved from Seattle to Chicago in 2001, yet Boeing's
assembly plants in Renton and Everett continued to hum.
As of 2015, the company employed more than 80,000
Washington workers and the state's aerospace suppliers
employed many thousands more.
The airplane company founded by William E. Boeing
(1881-1956) had grown into a Seattle manufacturing
powerhouse and nationwide air -transportation system by
the early 1930s. While the rest of the country was mired in
the worst year of the Great Depression in 1933, Boeing
employment reached a new high of 2,264. Yet the Boeing
Company hit major turbulence in 1934, when the U.S.
Congress accused the company of monopolistic
practices and forced it to dissolve United Aircraft and
Transport, its passenger airline system, which was
reincorporated as an independent company under a new
name, United Airlines. A bitter Bill Boeing sold most of his
shares, retired, and never again played a significant role in
the company he founded.
Boeing 747 in flight
Courtesy the Boeing Company
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Boeing Plant, Everett, 1960s
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Boeing KC-135 Stratotanker refueling a Boeing 8-52
Stratofortress, n.d.
Courtesy the Boeing Company
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Boeing 8-17E in flight, n.d.
Courtesy U.S. ArmyAir Corps
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The next year, 1935, the company's payroll dwindled to
839. However, war rumblings from Europe soon revived
Boeing's fortunes, along with those of the broader Puget
Sound economy. Boeing received orders from the Army
Air Corps for dozens of bombers in 1936 and the
company's payroll soared, reaching 2,956 workers in 1938
and nearly 6,000 by the end of 1939. With success came
labor troubles. The Aero Mechanics' Union threatened to
strike in 1940 and Boeing, in retaliation, threatened to
move to Portland or San Francisco. This would have
spelled economic trouble for all of Washington, because
the company was now firmly ingrained in the state's
economy. In the end, Boeing accepted arbitration and the
labor strife slowly eased, in part because the threat of a
new war in Europe brought both sides together. Boeing
would remain in Seattle.
The attack on Pearl Harbor in 1941 sparked an
unprecedented explosion in Washington's aviation
industry. The company's Duwamish River complex in
South Seattle was covered with camouflage netting so
that hostile eyes could not see what was happening
below: tens of thousands of workers feverishly building
thousands of airplanes, including two of the most famous
American aircraft of the war, the B-17 Flying Fortress and
the B-29 Superfortress. Boeing was no longer merely a
regional economic powerhouse; it "instantaneously
became a major national business enterprise" (Ficken
and LeWarne, 131). By 1944, nearly 50,000 people worked
for Boeing. The company had expanded along the
Duwamish River and into the suburb of Renton southeast
of Seattle. Boeing sales for 1944 exceeded $600 million, a
number unthinkable before the war. This was 10 times the
total sales for all of Seattle's industry in 1939. Seattle's
population skyrocketed and many of those newcomers
were working long hours and making good money at
Boeing.
The company's presence was now felt all across the state.
For instance, aluminum, produced with cheap
hydroelectric power in Spokane, Longview, and other
cities, almost immediately became the state's second -
biggest wartime industry. Much of that aluminum was war
contracts,' as one Seattle newspaper put it (Ficken and
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Boeing 727 on display at Boeing Field, 1963
Courtesy Washington State Archives
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Boeing technicians test Lunar Rover 1, Houston,
March 24, 1971
Courtesy NASA
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"Will the last person leaving Seattle - Turn out the
lights" billboard, April 16, 1971
Courtesy The Seattle Times
LeWarne, 130). Meanwhile, the state's community and
technical colleges had begun offering aviation training
programs as early as 1941, when the school in Pierce
County that would evolve into Clover Park Technical
College started training aircraft mechanics.
For Washington's economy, "the postwar era began not ...
aboard the battleship Missouri, but in the board room of
the Boeing Company" (Ficken and LeWarne, 144). With
peace in 1945, it appeared that the state's aviation
industry would crash again. The government immediately
canceled most of its B-29 contracts and Boeing's board
slashed the workforce to 11,000. This was perilously
close to the critical mass "below which the company
could not survive" (Bauer, 108). Boeing pulled out of this
dive by converting one of its cargo planes to a commercial
airliner, the Stratocruiser, and pursuing the growing
commercial -aviation industry.
Then, as the 1950s began, the Cold War and the Korean
conflict created a renewed demand for military aircraft.
Boeing developed the B-47 and the groundbreaking B-52
Stratofortress. Over the next decades, Boeing would build
744 of the massive B-52 jet bombers, more than 60 of
which were still in use in 2015, 60 years after the plane
first entered service. Then came the KC-135, an Air Force
tanker built in Renton, and a series of commercial
jetliners, including the hugely popular Boeing 707 and
Boeing 727. Boeing had not merely survived the postwar
era, it was thriving on an unprecedented scale. In 1957,
employment topped 100,000 for the first time. Yet for the
state's economy, "Boeing's own success proved a mixed
blessing" (Ficken and LeWarne, 145). The workforce and
the economy continued to careen up and down in
sometimes sickening lurches, depending on the whims of
the commercial -airplane market and the stiff competition
for military contracts.
Boeing's solution was to diversify. As the 1960s began,
space became a key part of President John F. Kennedy's
New Frontier. Boeing had already entered the missile
business in the 1950s with its BOMARC supersonic
antiaircraft rockets. Then in 1961 it won a contract to
build Saturn rocket boosters. In 1963 the company
Utah Air National Guard refueling 8-52
Stratofortress, 2nd Bomb Wing, Barksdale Air Force
Base, Louisiana, March 26, 2012
Courtesy United States Air Force under public
domain (120326-F-PM120-526)
acquired 320 acres of farmland in Kent and built the Kent
Space Center, which would become the sprawling
headquarters for Boeing's many space -related projects,
including the Lunar Roving Vehicle that eight years later
would ramble over the surface of the moon. Washington's
aviation industry had evolved into an aerospace industry.
By 1966 Boeing was taking a hard look at its primary
market, the airliner. Deciding that jumbo jets were the
future, the company acquired Paine Field, an old wartime
military base in Everett, and built what remains in 2015
the largest building by volume in the world. It was the
assembly plant for the company's new jumbo jet, the
Boeing 747, and the workforce soon exceeded 20,000 at
Everett alone. The first 747 rolled out of the giant building
in 1969 (by 2014, Boeing had built 1,500 747s and
counting).
The 747 also marked a turning point in the way the company built its planes, with enormous implications
for Washington's economy. Only the wings and the forward body sections, including the flight deck, were
actually manufactured in the Boeing plant. More than 65 percent of the 747 was subcontracted to other
companies. Tellingly, the Everett plant was called an assembly plant, not a factory. To a significant
degree, the 747 was being built in widely scattered workshops and factories all over the state and all over
the world and then assembled in Everett. This trend would accelerate over the next few decades. A
running joke in Seattle went like this: "A Boeing airplane is forty-five thousand pieces flying in close
formation" (Newhouse, 168).
Airplanes had become so complex that it made sense to farm out some parts to specialists. Some of
these suppliers were clustered in the Puget Sound area and were founded by former Boeing employees
who had struck out on their own. Others were scattered around the state and utilized the aerospace
knowledge of retired Air Force personnel from Washington's many air bases. And many of the suppliers
were overseas. Still, assembling and integrating all of these pieces in Everett and Renton remained a
massive job. As the 747 project got rolling in 1968, employment at Boeing peaked at nearly 142,400, and
many thousands more were working for Boeing's suppliers.
Then came the biggest Boeing downturn of all, the one for which the term Boeing Bust was coined. As the
1970s dawned, the airliner market was saturated and the country was slipping into recession. Boeing laid
off more than 25,000 workers in 1969 and another 41,000 in 1970. Then in 1971 came devastating news.
The U.S. Senate cut funding for Boeing's sleek new Supersonic Transport, known as the SST, and the
company cut nearly 20,000 more jobs. The workforce hit a low of 56,300. This Boeing Bust had put 86,000
workers on the street in three years.
"Seattle and the Puget Sound region -- where most of the people were employed -- became a disaster
area; and statewide, Washington unemployment hit 14 percent, highest in the nation. Someone placed a
huge sign adjacent to Interstate 5, with the grim admonition, 'Will the last person leaving Seattle turn out
the lights" (Bauer, 216).
The company -- and the state's aerospace industry -- engineered a remarkable comeback over the next
decade. Boeing landed several lucrative military contracts, including the Airborne Early Warning and
Control System (a radar plane known as AWACS), built in Renton, and air -launched cruise missiles, made
at the Kent Space Center. The company also made a crucial strategic pivot: It decided to target "overseas
commercial sales as its top priority" (Bauer, 216). By 1972, the company was selling to airline customers
in Romania, Egypt, Iraq, Sudan, and, of special significance for the future, China. Japan Air Lines had, for
decades, been one of Boeing's largest customers, and it operated a pilot -training center at the former
Larson Air Force Base in Moses Lake, Grant County, for more than 40 years. As of 1978 more than half of
Boeing's commercial airliner orders were foreign. Boeing had by then become the country's largest single
exporter and earner of foreign capital and it would continue to remain near the top.
However, the trauma of the 1971 Boeing Bust had hurt nearly everybody in the state, not just Boeing
workers. It was seared into the collective psyche. Washington's policy makers and business leaders put a
great deal of effort into diversifying the state's economy. This effort eventually reached fruition in the
1990s with the rise of Microsoft, Amazon, and the high-tech industry. That helped to alleviate the "mixed"
portion of the "mixed blessing" that was Boeing. Meanwhile the "blessing" part was still obvious with
Boeing's employment rebounding back to more than 100,000 by 1980.
The company still towered over its aerospace competitors, but by the late 1980s that began to change. An
upstart European company called Airbus was beginning to cut into the market, partly because it was able
to build airplanes more cheaply than Boeing. The reasons for this became a subject of fierce
international debate in the mid-1990s. In some American circles -- and especially in Boeing's home state
-- Airbus was considered to have an unfair advantage over Boeing because a consortium of European
governments subsidized it. In fact, Airbus had been conceived because the governments of Britain,
France, Spain, and Germany were worried that they would lose their national aircraft corporations
altogether to the Americans, i.e. Boeing. But how could Boeing be expected to compete with a company
whose losses could be covered by government money? In Seattle people felt it smacked of "socialism,' or
at least an unfair playing field, while on the other hand Europeans were appalled at "Boeing's habit of
laying off thousands of highly trained mechanics in slack periods" (Newhouse, 10). In fact, in 1992 Boeing
announced another layoff of 28,000 workers.
The debate came to a head when President Bill Clinton (b. 1946) visited Seattle that year and said that
many of the layoffs wouldn't have happened without the $26 billion that European governments had
plowed into Airbus: "The Europeans are going to have to quit subsidizing Airbus ... I am not going to roll
over and play dead" (Newhouse, 47). Seattle's economy, noted Clinton, was the most export -dependent
in the U.S. and a model for a nation increasingly concerned about growing overseas -trade gaps. An
international agreement did, in fact, partially limit Airbus subsidies, but it didn't appear to help Boeing. In
1993, Moody's downgraded Boeing's debt rating for the first time in company history. The subsidies
debate would drag on toward stalemate.
Once again, the state's aerospace industry lurched up and down. In 1997, Boeing merged with one of its
chief competitors in the defense field, McDonnell Douglas, as part of an attempt to further diversify and
shield the company from the vagaries of the passenger -plane market. This didn't entirely succeed. A
sharp downturn in air -passenger traffic occurred in the year following the September 11, 2001, terrorist
attacks, which also resulted in fewer airplane orders. In the years following the attacks, Boeing laid off
nearly 30,000 people and the company's Washington workforce dropped to around 54,000. This
happened while the state was still reeling from a shocking announcement in May 2001: Boeing was
moving its corporate headquarters to Chicago. Could this spell the beginning of the end for aerospace in
Washington? The Boeing president fueled the paranoia by saying, "We don't want to be off in a corner of
America" (Newhouse, 197).
The executives packed up and left, creating an upper tier far removed from the nuts and bolts of the
business. Yet the headquarters of the Boeing Commercial Airplanes unit of the company remained in
Seattle, and the airplanes were still being churned out in Everett and Renton. No matter where the
corporate suites were, the airplanes still had to be assembled in a state with a trained workforce that
knew how to build them.
In 2004 the workforce was once again at low ebb -- about a hundred thousand Boeing jobs had vanished
in the Puget Sound area since the 9/11 attacks, for total employment of just above 52,000 in Washington -
- and spirits were even lower. Aerospace seemed to be in a slow decline and high tech seemed to be
soaring. "By then, Boeing was widely seen as peripheral, an ex -spouse who is still hanging around the
neighborhood" (Newhouse, 199). Then, once again, Boeing bounced back. Another new and innovative
airplane, the midsize Boeing 787 Dreamliner, was conceived in 2003 and began production in Everett and
- - ominously for Washington -- at a new plant in South Carolina. The 787's launch was delayed until 2011,
but by then it was already what the company website called the "fastest selling wide -body airplane in
history" ("Historical Snapshot"). Boeing was once again outselling Airbus.
The 787 reflected the company's new way of making airplanes. More of its manufacturing than ever was
outsourced to suppliers. Many of these were huge overseas companies, such as Japan's Mitsubishi, Fuji,
and Kawasaki. Hundreds of others were spread all over the Puget Sound region and the rest of
Washington. The 787 was especially innovative in its use of composites -- carbon -fiber -reinforced plastic
- - to replace aluminum. About half of the plane's primary structure, including the fuselage and wing, were
made of composite materials. Partly because of this, a composites industry -- a labor-intensive
manufacturing process -- sprang up in Washington.
Several developments in 2011 signaled a new aerospace boom in Washington. In February, after a long
and controversial competition with Airbus, Boeing won a U.S. Air Force contract to build a new long-range
aerial -refueling tanker, the KC-46, based on the Boeing 767. An estimated 179 of these began production
in Everett. In addition, Boeing announced a new version of the 737, its bestselling model, to be called the
737 MAX. All the while, the current 737 versions, including the 737-900, were still hot sellers. In 2012 the
737 in all versions became the first commercial jet to surpass the 10,000 mark in sales. The Renton plant
began producing 737s at the remarkable rate of 42 per month. Total Boeing employment was at around
165,000, of which about 77,000 were in Washington. The number of aircraft ordered by customers went
above 800 in 2011, compared with fewer than 300 just two years earlier, and then well above 1,000 in
2012. Most significantly, Boeing's Washington employment numbers were climbing, to a peak of 87,000
in 2012. Washington employment would fluctuate slightly over the next few years but through mid-2015
had not dipped below 80,000.
Meanwhile Boeing had spawned a huge network of smaller companies that were suppliers to Boeing and
the larger aerospace industry. Some of these were composites companies, such as Janicki Industries Inc.
in Sedro-Woolley, Skagit County, and Hexcel Corporation in Kent. Some were electronics and engineering
companies, such as Absolute Aviation Services in Spokane. Some had started as Boeing -owned
companies and had been sold along the way, such as Triumph Composite Systems in Spokane. The
nonprofit trade organization Pacific Northwest Aerospace Alliance represented more than 500
companies.
Yet by 2013 anxiety was once again building throughout the state about the future of this crucial part of
the state's economy. Boeing hinted that the new 777X project might be moved to South Carolina, Utah, or
Texas. In November 2013 the Washington State Legislature held a weeklong special session devoted
exclusively to coming up with a package of tax incentives, infrastructure improvements, and worker -
training programs aimed at keeping the project in the state. Legislators subsequently passed $9 million in
tax breaks for Boeing and $8 million for aerospace training. The package was contingent on the 777X
project remaining in Washington.
As a result, Boeing remained a robust linchpin of the state's economy, as it had been for most of its
century of existence. As of July 2015, Boeing employed 80,145 people in Washington. The company had
secured 1,535 airplane orders in 2014 and hundreds more through the middle of 2105. Production of the
777X was set to begin in 2017 -- in Everett. However, if Washington's aerospace history taught one clear
lesson, it was this: At some point, the ride will once again get bumpy.
This essay made possible by:
Air Washington
Sources: Jim Kershner, Air Washington: Creating Careers in Aerospace (Seattle: Air Washington and H istoryl nk,
September 2015), 14-25; Robert E. Ficken and Charles P. LeWarne, Washington: A Centennial History (Seattle:
University of Washington Press, 1988); Richard C. Berner, Seattle in the 20th Century: Seattle 1921-1940, From
Boom to Bust, (Seattle: Charles Press, 1992); Eugene E. Bauer, Boeing: The First Century, (Enumclaw: TABA
Publishing Inc., 2000); John Newhouse, Boeing Vs. Airbus (New York: Alfred A. Knopf, 2007); BillYenne, The Story of
the Boeing Company, Updated Edition (Minneapolis: Zenith Press, 2010); Boeing website accessed September 2,
2015 (www.boeing.com); "Historical Snapshot," Boeingwebsite accessed September 7, 2015
(http://www.boeing.com/history/products/787.page).
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