MUKILTEO — Gov. Jay Inslee announced a plan Thursday to help stop aerospace jobs from leaving the state. He wants to make sure that Boeing’s next-generation 777 is built here, not in South Carolina.

“We know how to build aircraft and we intend to have the first launch of this airplane right here in the state of Washington,” Inslee said.

A decade ago, the Legislature offered more than $3 billion in tax breaks for Boeing to land the 787 Dreamliner assembly here, and, still, much of the work went to South Carolina.  In fact, that state is already shelling out more than $100 million to get more Boeing jobs.

Inslee said he’s determined to keep the Palmetto State from winning this latest competition, arguing that it comes down to better road and better schools.

“The most important thing we can do today to win this airplane is to pass a transportation budget and an educational budget and an education reform package to grow engineers and machinists,” he said.

There were no specifics released Thursday about money or tax breaks for the state’s largest employer.

“We are going to be talking to Boeing at some point,” said Inslee.  “We have done things in the past.”

Aviation industry analyst Scott Hamilton said the same dynamic is playing out now that played out during the 787 assembly location decision in 2003.

“Boeing is very good, and has been for decades, about playing off states and jurisdictions against each other to try to get tax breaks, incentives, concessions,” Hamilton said.

He says the dynamic holds Washington “hostage” to competition with other states.

Hamilton argues that much more needs to be done beyond increased funding for education and transportation.  He would start with reforming the state’s labor laws to make it cheaper to conduct business in Washington.

“The South Carolina Legislature are all Republicans,” said Hamilton. “They love Boeing. They welcome Boeing with open arms, and Chicago (Boeing’s corporate headquarters) understands that. And I don’t think our Legislature here gets it.”

The special session in Olympia starts Monday when the Legislature resumes debate over transportation and education money. Inslee says lawmakers need to act quickly and send a signal to Boeing as the company goes about making this important assembly line location decision.

WASHINGTON — The Boeing Co. has announced it will be extending its Pension Value Plan and BSS Retirement Plan to same-sex spouses and domestic partners as beneficiaries for pension survivor benefits, according to Rep. Adam Smith, D-Wash.

“I commend Boeing for providing equal pension survivor benefits for same-sex spouses and domestic partners,” Smith said in a news release Tuesday afternoon. “LGBT workers are a critical part of a skilled labor force and equal treatment of their employees has led to Boeing’s success and global leadership in aerospace, science, and technology.

“It is unacceptable to deny any person equal pay or benefits because of who they love,” Smith added.

EVERETT — Despite problems with the 787 Dreamliner, Boeing reported a net income increase of 20 percent in the first quarter.

The airplane manufacturer earned $1.11 billion or $1.44 per share.

First-quarter revenue was $18.9 billion, which is three percent lower than 2012. The drop is due in part to Boeing delivering one 787 before the plane was grounded in January due to issues with its lithium-ion batteries.

Boeing said it will meet its financial and delivery targets this year, including delivering at least 60 787s.

“Strong core operating performance fueled by productivity gains and solid program execution drove higher company earnings and double-digit operating margins in both major businesses during the quarter,” said Boeing Chairman, President and Chief Executive Officer Jim McNerney.

McNerney said that around-the-clock work to resolve issues with the battery contributed to increasing production rates on 737 and 777 airplanes.

 

WASHINGTON — Boeing executives are in the hot seat today as the National Transportation Safety Board holds a two-day investigative hearing in to the Jan. 7 fire on a Boeing 787 that was attributed to a defective lithium-ion battery. Problems with the lithium-ion batteries caused the FAA to ground the 787s later that month.

Boeing officials answered numerous questions during a lengthy hearing Tuesday morning before the NTSB. During the hearing, Boeing spokesperson and chief project manager, Mark Sinnett talked about the extensive testing that was done with the lithium-ion battery used in the company’s 787 Dreamliners. Sinnett said the company did not know that a thermal runaway and fire would be possible.

“Our belief at the time — based on our testing — was than an internal short circuit in a cell could lead to that cell venting its electrolytes. We also believed there was not sufficient release of energy to propagate to other cells based on the development and certification testing we had done,” Sinnett said.

He went on to say that Boeing has made significant changes to the batteries to prevent future incidents.

“Inside the cell there are mechanisms in the design of the cell that are designed to limit the chemical reaction inside the battery when the battery reaches a certain temperature. It’s inherent that a separator can slow down the chemical reaction in the battery,” he said.

On Friday, the FAA approved Boeing’s design modifications to the 787 battery system. This week it will issue instructions to operators for making changes to the aircraft that would allow the planes to return to service.

The Federal Aviation Administration approved Boeing Co.’s proposed fix for the lithium-ion battery systems on its 787 passenger jets, which have been grounded since January.

EVERETT — The Boeing Co. will reduce its engineering workforce by as many as 1,700 people by the end of the year, with 700 engineers facing layoffs, the Everett Herald reported.

As many as 100 engineers will receive 60-day layoff notices on Friday, the Herald reported. Mike Delaney, the vice president of engineering for Boeing, told the Herald that the layoffs were unavoidable. He said the company is letting workers go because of the reduction in non-recurring development work and development programs that have not been approved.

“Unfortunately and unavoidably we must take additional actions that will impact some direct employees,” Delaney said.

The call to lay off 700 engineers follows a plan to cut more than 800 machinists by the end of the year, the Herald reported.

WASHINGTON — The Federal Aviation Administration will inspect all Boeing Model 737 airplanes after reports of wear and corrosion following incorrect application of a protective surfacing.

According to FAA spokesman Ian Gregor, the government organization will formally make an announcement Monday about the inspections.

The Federal Register reported Sunday that the FAA’s “airworthiness directive” requires inspection and possible replacement of pins on the plane’s horizontal stabilizer rear spar. The FAA ordered the inspection to “prevent premature failure” of attached pins, that could result in loss of control of the airplane.

No accidents have been reported because of possible malfunctions, Gregor said.

The inspection could affect more than 3,000 Boeing 737s.

SEATTLE — While the airline manufacturer recently announced a number of layoffs in the Puget Sound area, on Tuesday it announced its intent to invest $1 billion and employ about 2,000 at its Charleston, S.C., plant by 2020, the Tacoma News-Tribune reported.

The Tribune said that Boeing made the announcement to the South Carolina Legislature in a bid to get $120 million to aid its expansion efforts there. The plant assembles the recently plagued 787 Dreamliners and builds major components for the planes. The paper also said that Boeing has already invested more than $1 billion in the plant.

In 2009, Boeing refused to accept a plan to expand the production of the plane at its Everett plant. It then announced its plan to expand into South Carolina, it’s first manufacturing foray outside of Washington state.

The Tribune said that Boeing has recently purchased more than 300 acres near its existing plants in South Carolina and there also plans to move an information technology group from Washington to South Carolina.

Turkish Airlines, cited as a fast-growing airline, also reported ordered 70 737 planes on Tuesday.

EVERETT — On Friday, Boeing completed its final certification test flight for a new battery system — malfunctioning batteries had plagued the aircraft manufacturer and required the grounding of its 787 planes. Friday’s final test flight fulfills the testing required by the FAA.

The test flight left Paine Field with 11 people on board, two of which were FAA representatives. The test flight lasted nearly two hours.

The purpose of the flight was to demonstrate that the new battery system performs as intended during normal and non-normal flight conditions, a spokesman for Boeing said.

Boeing will submit requested data on the test flight to the FAA. The FAA will then determine if it will allow Boeing to return the 787s to service.