community attributes tells data rich stories about communities › beyers ›...

103

Upload: others

Post on 28-Jun-2020

4 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are
Page 2: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Community Attributes tells data rich stories about communities that are important to decision-makers.

Principal: Chris Mefford

Lead Analyst: Spencer Cohen

Analysts: Erin Gengo Diana Haring

Alexandra Hudson Bryan Lobel

Community Attributes Inc. 1411 Fourth Ave, Suite 770 Seattle, Washington 98101

www.communityattributes.com

Page 3: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Washington Aerospace Partnership November 2013 Page i Aerospace Impact Analysis

EXECUTIVE SUMMARY Introduction

The aerospace industry and Boeing Commercial create enormous amounts of economic activity and fiscal benefits to the State of Washington—more than any other single private sector employer or industry. The findings of this study detail the scale and reach of these benefits, which include aerospace-supported tax revenues—via direct and multiplier effects—of more than $4 billion between 2004 and 2012; of this Boeing Commercial alone has supported more than $3.3 billion over this period.

For many decades the Washington State economy was defined by commercial aircraft production, and a dependence on natural resources. From Boeing’s beginnings in 1916, through the War years, to today’s diverse cluster of activities spanning aircraft final assembly, research, and defense activities, the aerospace industry has been a driver of economic growth in Washington State. Aerospace continues to be a foundational industry in Washington State, driving innovation, economic development, and jobs.

Today, Boeing Commercial is the largest exporter in the U.S., attracting large inflows of income into the State of Washington. Boeing Commercial is Washington State’s largest private sector employer, pays good wages, and anchors an extensive supply chain centered on final production in Renton and Everett. In recent years the supply chain has diversified—an increasing number of firms have expanded into other supply chains in the U.S. and abroad, including Bombardier, Airbus, and more recently the Chinese aircraft manufacturer COMAC. Rich networks of suppliers serve these programs from across Washington State, including firms engaged in:

Air Framing and Aero Structures

Aerospace Engineering, Research, and Design

Avionics and Navigational Systems

Composites and Advanced Materials

Tooling

Interiors

Maintenance, Repair, and Overhaul

This report examines these economic and fiscal impacts to the State of Washington for the aerospace cluster as a whole, as well as for Boeing Commercial specifically. Boeing Commercial, which produces the company’s 737, 747, 767, 777 and 787 aircraft lines, is at the center of Washington State’s aerospace cluster. This analysis goes deeper than past aerospace reports and looks at the impact of Boeing Commercial by each of its major commercial production lines in Washington State. The findings will serve leaders and stakeholders across Washington State by meeting the following two objectives:

Page 4: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Washington Aerospace Partnership November 2013 Page ii Aerospace Impact Analysis

1) Update and demonstrate the important and impactful contributions of the aerospace industry and Boeing Commercial specifically to the Washington State economy, from jobs, income, business sales, and tax revenues, both directly and through multiplier effects throughout the economy; and

2) Understand the alignment between Washington State’s investments and aerospace and the fiscal and economic benefits accrued from Boeing’s re lated activities from 2004 to 2012.

Findings Washington State Investments

Between 2004 and 2012, Washington State supported Boeing and aerospace companies with tax incentives and non-tax investments in direct support of the aerospace industry, totaling more than $1.4 billion in value in 2012 dollars, adjusted for inflation. Of this total, the largest share came from tax incentives, which summed to $978 million between 2004 and 2012 (2012 dollars). Additional investments in the cluster came from non-tax investments in infrastructure, workforce and local and federal investments across the state.

Direct Impacts

In 2012, there were 175 aerospace business establishments in Washington State, with an additional 1,175 locations for aerospace-related businesses, for example, machine shops. Boeing Commercial has five manufacturing sites in Washington State, all concentrated in the Central Puget Sound region.

Aerospace revenues in 2012 totaled $51.2 billion, of which an estimated $48.9 billion were generated directly by Boeing Commercial activities. Another $8.7 billion in sales were generated by businesses related to aerospace.

Employment in the aerospace industry totaled 94,200 jobs in 2012, of which approximately 72,900 were estimated within Boeing Commercial. Aerospace employment equaled approximately 3.3% of all non-farm employment in Washington State (the highest share since 1999, when aerospace firms employed 3.7% of the State’s non-farm workforce). An additional 38,300 workers were employed in sectors closely tied to aerospace, such as plastics manufacturing, machine shops, and electronic component manufacturers.

An estimated 47,000 Boeing employees were directly employed in aircraft program-specific activities, with another 25,900 workers engaged in activities indirectly in support of aircraft final production. These activities included customer service, finance, marketing, sales, and other overhead and related work.

Wages paid out among aerospace firms totaled more than $9.1 billion (before benefits), or approximately $96,684 per covered employee, compared with statewide median household income of $56,444. Boeing Commercial alone paid out an estimated $7.2 billion in wages in 2012, or $9.7 billion inclusive of benefits (Exhibit E1).

Page 5: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Washington Aerospace Partnership November 2013 Page iii Aerospace Impact Analysis

Exhibit E1. Direct Economic Impacts of Aerospace Industry and Boeing Commercial in Washington State, 2012

Establishments

Wages ($

billions) Jobs Gross Business

Income ($ billions) Aerospace Industry 175 $9.1 94,200 $51.2 Boeing Commercial 5+ $7.2 72,900 $48.9 Related Industries 1,175 $2.4 38,300 $8.7

Sources: Community Attributes Inc.; industry sources; Washington State Employment Security Department; Washington State Department of Revenue. Note: Wages here are exclusive of benefits. Later estimates for Boeing Commercial include estimates of benefits.

Indirect and Induced Impacts

After factoring in the broader impacts of aerospace activities, including through supply chain, vendor sales, and additional income created and spent throughout the economy, the aerospace industry supported 253,400 jobs across Washington State, nearly $76 billion in revenues, and $19.8 billion in income and benefits (Exhibit E2). For every direct job in aerospace, an additional 1.7 jobs are supported elsewhere in the state economy. Likewise, every million dollars in aerospace sales supports almost five workers across Washington State.

Exhibit E2: Aerospace Direct, Indirect and Induced Impacts, 2012

*Includes estimated benefits. **Note: some columns may not sum to total due to rounding. Sources: Community Attributes Inc.; Washington State Office of Financial Management.

Fiscal Impacts

Adjusted for inflation, the aerospace industry in Washington State directly paid more than $1.2 billion in taxes to the State between 2004 and 2012, largely in the form of B&O taxes. Factoring in the indirect and induced effects through the activities among suppliers and the spending of additional wages throughout the economy, the total fiscal impact of aerospace over the period was nearly $4.1 billion. In 2012, State of Washington tax revenues supported by aerospace via direct and multiplier effects totaled $544.1 million (Exhibit E3).

Jobs Revenues (millions $)

Income* (millions $)

Direct 94,200 51,240 11,843 Indirect 32,600 5,209 1,761 Induced 126,600 19,328 6,187 Total 253,400 75,777 19,792

Page 6: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Washington Aerospace Partnership November 2013 Page iv Aerospace Impact Analysis

Between 2004 and 2012, each $1.00 of State investment in aerospace over this period is associated with $4.10 in state tax revenues. Boeing Commercial alone is estimated to have supported more than $3.3 billion in tax revenues over this period, including direct impacts and multiplier effects.

Exhibit E3. Estimated Total Fiscal Benefits from Aerospace, 2004-2012

Sources: Community Attributes Inc.; Washington State Office of Financial Management; Washington State Department of Revenue.

Impacts by Boeing Commercial Program In 2012, the 737 and 777 directly employed an estimated 9,600 and 12,100 employees, respectively. Including indirect jobs within Boeing in support of final production, total Boeing employment for the 737 and 777 programs totaled 20,500 and 19,700 workers, respectively (Exhibit E4). In terms of direct wages and benefits, the 737 program brought in $2.7 billion, while the 777 program was responsible for $2.5 billion. Factoring in multiplier effects of Boeing Commercial across Washington State, the 737 program supported over 20,000 jobs, while the 777 program supported just under 20,000 jobs. Boeing Commercial activities overall support—via direct and multiplier effects—an estimated 208,800 jobs, nearly $70 billion in sales, and $16.4 billion in wages and benefits (Exhibit E5).

Boeing Commercial Fiscal Impacts

In 2012, the 737 program directly contributed an estimated $56.5 million in B&O taxes to the State of Washington, while the 777 program paid an estimated $39.2 million. Factoring additional taxable activities throughout the state supported via multiplier effects from Boeing programs, total State of Washington tax revenues

Other Taxes

Sales Tax

B&O Taxes

Millions (2012 $)

Page 7: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Washington Aerospace Partnership November 2013 Page v Aerospace Impact Analysis

supported by the 777 program summed to $133.1 million, while the 737 supported $169.3 million (Exhibit E5).

Exhibit E4. Direct Boeing Commercial Impacts in Washington State by Program, 2012

Program Jobs Direct Wages & Benefits

($ billions)

Estimated Direct Tax Payments

($ millions) Direct Jobs

Supporting within Boeing

737 9,600 10,900 $2.7 $56.5 747 6,200 3,200 $1.2 $16.6 767 5,100 1,400 $0.9 $7.3 777 12,100 7,600 $2.6 $39.2 787 14,000 2,800 $2.3 $13.9

Total 47,000 25,900 $9.7 $133.5 Sources: Community Attributes Inc.; industry sources; Washington State Department of Revenue.

Exhibit E5. Boeing Commercial Impacts by Program, 2012

Program Jobs Statewide Business Sales

($ billions)

Total Wages & Benefits

($ billions)

Taxes Supported Statewide

($ millions)

737 65,100 $27.6 $5.0 $169.3 747 26,700 $8.8 $2.1 $60.3 767 17,300 $4.3 $1.4 $34.4 777 56,900 $20.1 $4.4 $133.1 787 42,800 $9.1 $3.6 $79.3

Total 208,800 $69.9 $16.4 $476.2 Sources: Community Attributes Inc.; industry sources; Washington State Department of Revenue; Washington State Office of Financial Management.

Additional Benefits of Boeing This study also considers the “softer” impacts of Boeing’s presence in Washington State such as spinoff companies generated both within and outside of aerospace, technologies shared across Washington State’s manufacturing landscape, Boeing’s partnerships with Washington State universities, and the company’s sizeable charitable contributions. Each of these activities plays a role as a driver of research, innovation, and economic development in Washington State.

Page 8: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Washington Aerospace Partnership November 2013 Page vi Aerospace Impact Analysis

Blank.

Page 9: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Washington Aerospace Partnership November 2013 Page vii Aerospace Impact Analysis

CONTENTS Section 1. Introduction ........................................................................................................................ 1

Background and Purpose ................................................................................................................. 1

Methods ............................................................................................................................................. 1

Organization of Report .................................................................................................................... 2

Section 2. Aerospace in Washington State.......................................................................................... 3

History of Aerospace ....................................................................................................................... 3

Supply Chain Components .............................................................................................................. 3

Workforce and Human Capital ....................................................................................................... 6

Section 3. State Investments in Aerospace, 2004-2012 ..................................................................... 7

Tax Incentives ................................................................................................................................... 8

Non-tax Investments in Aerospace ............................................................................................... 14

Project Olympus ............................................................................................................................. 15

Project Pegasus ............................................................................................................................... 18

Spokane’s Investments in Aerospace ............................................................................................ 18

Section 4. Measures and Impacts ...................................................................................................... 20

Establishments ................................................................................................................................ 20

Revenues ......................................................................................................................................... 23

Jobs .................................................................................................................................................. 27

Wages and Occupations ................................................................................................................. 34

Indirect and Induced Impacts ....................................................................................................... 41

Fiscal Impacts ................................................................................................................................. 48

Long-Term Economic and Fiscal Benefits from Aerospace in Washington State .................... 53

Section 5. Additional Benefits from Boeing Commercial ................................................................ 56

Boeing Spinoff Companies ............................................................................................................ 56

Boeing-Specific Technology Transfer ........................................................................................... 57

Boeing Partnerships with Washington Universities ..................................................................... 57

Aviation Biofuels ............................................................................................................................ 58

Philanthropy .................................................................................................................................... 58

Section 6. Aerospace Cluster Linkages ............................................................................................. 60

Medical ............................................................................................................................................ 60

Maritime .......................................................................................................................................... 60

Sports & Recreation ....................................................................................................................... 60

Wind & Solar Energy ..................................................................................................................... 60

Section 7. Commercial Space and Military Aerospace in Washington ........................................... 61

Commercial Space .......................................................................................................................... 61

Defense and Unmanned Aerial Vehicles ...................................................................................... 62

Section 8. Findings and Conclusions ................................................................................................ 63

Appendices .......................................................................................................................................... 65

Bibliography ........................................................................................................................................ 87

Page 10: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Washington Aerospace Partnership November 2013 Page viii Aerospace Impact Analysis

Blank.

Page 11: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 1. Introduction

Washington Aerospace Partnership November 1, 2013 Page 1 Aerospace Impact Analysis

SECTION 1. INTRODUCTION Background and Purpose

The Washington Aerospace Partnership desired this study of the impacts of aerospace industry in Washington State to provide strategic decision-making support for the statewide aerospace activity. This study addresses the aerospace industry’s historical and continuing role as a driver of broad-based, cross-industry innovation in Washington State.

The study describes the aerospace cluster supply chain, captures the breadth of benefits to the State from aerospace and Boeing Commercial activity, and makes explicit what role public investments contributed towards this additional income and jobs, from 2004 to 2012. Unique from other reports, this analysis quantifies the impact of Boeing Commercial by each of its major commercial production lines in Washington State, while also describing impacts of Boeing activities stemming from philanthropy, technology transfer, and spinoff companies in Washington State.

Methods The analysis draws from custom modeling, interviews and other qualitative sources to provide a rich and detailed picture of the size, scope, and geographic reach of aerospace activities and around each Boeing Commercial production line in Washington State. The approach includes secondary data collection of economic activity (jobs, wages, revenues and more) to capture the immediate and broader set of industries engaged in the aerospace cluster and on specific production lines in Washington State. Interviews with industry leaders provided more granular data on Boeing Commercial employment and wages by production line.

The Washington State Input-Output Model provided estimates of direct, indirect, and induced benefits of the aerospace industry and key components of the industry (such as specific production lines). Customized modifications to the model helped account for differences in productivity by production line. Estimates of fiscal impacts employed net output estimates and calculations of effective tax rates and payments by sector.

Page 12: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 1. Introduction

Washington Aerospace Partnership November 1, 2013 Page 2 Aerospace Impact Analysis

Organization of Report The subsequent sections present key context, analytics and findings on the statewide aerospace industry, organized as follows:

Section 2. Overview of Aerospace and Boeing in Washington State. A historic review of the industry in Washington State and discussion of the aerospace supply chain across the state and key companies.

Section 3. State Investments in Aerospace. A historic review of tax and non-tax investments from 2004 to 2012.

Section 4. Measures and Impacts. A detailed quantitative analysis of the aerospace industry and Boeing Commercial in Washington State, including estimates of establishments, revenues, jobs, wages and occupations, and statewide economic and fiscal impacts.

Section 5. Additional Benefits from Boeing Commercial in Washington State. A discussion of additional benefits to the State of Washington from Boeing activities, including examples of technology transfer and philanthropic activities.

Section 6. Aerospace Cluster Linkages. Review of the broader applications of aerospace innovation across the Washington State economy.

Section 7. Commercial Space and Defense Related Aerospace Activities. A description of Commercial Space and Defense related aerospace companies and activities in Washington State.

Section 8. Findings and Conclusions. An interpretation of the overall significance of the aerospace industry and Boeing Commercial in Washington State.

Appendices. Additional information, including data definitions, company profiles and technical documentation of methods employed.

Bibliography. Sources referenced within the document.

Page 13: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 2. Aerospace in Washington State

Washington Aerospace Partnership November 1, 2013 Page 3 Aerospace Impact Analysis

SECTION 2. AEROSPACE IN WASHINGTON STATE History of Aerospace

Aerospace drives economic development in Washington State. For decades, the industry has been a major employer, paid high wages, and attracted enormous business revenues into the state as a net exporter. Washington State’s aerospace cluster has historically been nearly entirely oriented around the Boeing Company. In recent years an increasing number of firms have expanded into supply chains destined for other companies doing final assembly of airplanes.

The industry’s foothold in the region started in earnest in 1916, when the Boeing Company was first incorporated with just 21 employees. Early on, the company benefited from congressional legislation allowing for the Post Office to contract with private firms for airmail (Kelly Act of 1925). Boeing responded by forming Boeing Air Transport in 1927, with routes to and from San Francisco and Chicago; the air carrier was an early predecessor to today’s United Airlines. In later years, Boeing’s operations in Washington State will play a critical role in the development of both commercial and military aerospace and space technologies. Exhibit 1 provides key milestones in the industry’s growth.

Supply Chain Components The aerospace industry is best understood by understanding its supply chain, which in Washington State is primarily centered around Boeing Commercial, a major division of the Boeing Company, and its five leading commercial aircraft production lines—the 737, 747, 767, 777, and 787 (Exhibit 2). Final assembly of the 737 takes place primarily in Renton and the remaining twin aisle final assembly lines are located in Everett, along with supporting fabrication and materials activities in Auburn, Frederickson, and Seattle-Tukwila.

In addition to commercial airlines, other major Washington State-based activities include Boeing’s unmanned aerial vehicle subsidiary, Insitu, based in Bingen, military technologies (for example, the Air Force tanker, based on a Boeing 767), and Boeing’s environmental and clean energy related technologies. These are described in more detail in Section 7 of the report.

Behind Boeing’s final production activities exists an extensive, multi -tiered supply chain. Products of businesses included in these support services range from finished components of planes ready for installation on a near-finished aircraft, to smaller part makers, to a broad array of direct support for Boeing manufacturing. Major activities throughout the supply chain include:

Air Framing and Aero Structures

Aerospace Engineering, Research, and Design

Avionics and Navigational Systems

Composites and Advanced Materials

Tooling

Page 14: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 2. Aerospace in Washington State

Washington Aerospace Partnership November 1, 2013 Page 4 Aerospace Impact Analysis

Interiors

Maintenance, Repair, and Overhaul

In many cases the same firm can exist along different tiers of the supply chain, depending on the nature of its contract with Boeing or with a prime contractor.

Exhibit 1. Key Milestones for the Aerospace Industry in Washington State

Date Event

1916 Boeing incorporates with just 21 employees.

1925 Congress passes “Kelly Act,” authorizing Post Office to contract with private companies to carry airmail; Boeing forms Boeing Air Transport, wins contracts to fly mail between San Francisco and Chicago.

1932 Alaska Airlines founded.

1942 Boeing B-29 Superfortress developed and used extensively during WWII and the Korean War.

1955 Boeing launches its first rocket, the Bomarc long-range anti-aircraft missile.

1958 Boeing delivers first jet plane, a 707-120, to Pan American Worldwide Airways.

1967 Boeing 737 makes inaugural flight. The 737, and its variants, will go on to be the best-selling jet airliner in the history of aviation.

1969 First Boeing 747 flies on Pan American Worldwide Airways.

1971 Boeing lays off 7,000 employees in a single day, signaling the beginning of the two year “Boeing Bust.” 60,000 workers will be laid off before the recession turns around.

1982 Advanced plastic composites introduced into 737 horizontal tails.

1986 Alaska Airlines acquires Horizon Air. Both companies now operate as Alaska Air Group.

1987 Boeing wins contract to design and build modules for the International Space Station.

1997 The Boeing Company merges with McDonnell Douglas Corporation, creating the world’s largest aerospace enterprise with 220,000 employees.

2001 Boeing Company relocates company headquarters to Chicago.

2003-2004

Washington State leaders mobilize efforts to secure the production of the 7E7 (later 787) in Washington State.

2004 Boeing Commercial selects Everett, WA as site for 787 final production.

2009 Boeing 787 Dreamliner, the first passenger jet made mostly of composite materials, makes maiden voyage.

2011 Boeing wins Air Force tanker contract.

2011 Project Pegasus successful in winning 737 MAX line by providing workforce training and other investments.

Source: Community Attributes Inc.

Page 15: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 2. Aerospace in Washington State

Washington Aerospace Partnership November 1, 2013 Page 5 Aerospace Impact Analysis

Key components of the supply chain, shown in Exhibit 2, provide a framework for breaking out economic activity and describing the roles of important businesses in Washington State. Below is a description of these supply chain activities along with key Washington State companies engaged in each activity.

Exhibit 2. Washington State Aerospace Supply Chain

Source: Community Attributes Inc.

Air Framers and Aero Structures

Air framers and aero structures refer to those who build and assemble the mechanical structure of an aircraft, including fuselage, wings, and undercarriage, and excluding the propulsion, electrical, and hydraulic systems.

Aerospace Engineering, Research and Design

Aerospace engineering in Washington State is a market made up of companies that design and certify all parts for new and old aircraft, including initial structure design, electrical systems, wing design, and lighting. Many companies have created retrofit parts for specific aircraft to improve its flight capabilities for performance, efficiency, and comfort. Once a part is created, engineering firms design and certify tools for manufacturers to successfully and economically build the parts, as well as provide support for ongoing maintenance and repair or redesign of aircraft.

Avionics and Navigational Systems

Avionics refers to the electronics systems used in aircraft, satellites and spacecraft. Avionic systems are broadly defined as any system that transfers or stores analog or digital data using a wireless, data line or other data transmission medium and includes flight-critical systems such as communications, navigation, display and management of multiple systems, as well as the hundreds of systems that are fitted to aircraft to perform individual functions (Avionics Systems, 2012).

Page 16: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 2. Aerospace in Washington State

Washington Aerospace Partnership November 1, 2013 Page 6 Aerospace Impact Analysis

Composites and Advanced Materials

NASA defines composite materials as “structural materials of metals, ceramics, or plastics with built-in strengthening agents which may be in the form of filaments, foils, powders, or flakes of a different compatible material .” (NASA, 2013) When combined, these materials produce a material with characteristics different from the individual components. Fiber-reinforced composites are commonly used in aerospace and have a long history of use in defense and space applications.

Composites have eclipsed traditional metals as aircraft materials and components, making vehicles lighter and more fuel-efficient, as well as more comfortable for the passenger. Cabin humidity in a passenger airplane can be kept higher in a composite craft, where rust is no longer a concern it once was, and the greater strength of the material allows for larger windows. Approximately half of the Boeing 787 and the Airbus A350 is composite, and composites will likely play a larger role in aircraft production in the future.

Tooling

Aerospace tooling companies machine and manufacture tools for aerospace assembly and manufacturing processes, spanning from single components to entire manufacturing systems. Components for use in aerospace require precision, and can use materials such as graphite, fiberglass, aluminum, steel, and tooling board.

Interiors

Aerospace interiors companies span design, manufacture and repair functions for interiors of aircraft, from cabinetry, to coffee makers, to partitions and specialty elevators for wheelchairs.

Maintenance, Repair, and Overhaul (MRO)

Aerospace MROs provide services spanning maintenance, repair, and overhaul for engines, accessories, avionics, electrical components and more.

Workforce and Human Capital The aerospace industry is dependent on emerging technologies as companies compete to produce cheaper, safer, and more efficient aircraft. Because of this, a technologically-skilled workforce is a crucial component in the success of Boeing and its suppliers. Programs across the state offer the job training and technical skills needed to ensure that Boeing and the larger aerospace cluster are able to utilize Washington State’s workforce. Non-profits such as the Aerospace Joint Apprenticeship Committee (AJAC) also serve to align industry needs with training and education in the state. These efforts vary across Washington State universities, to community colleges, to technical schools and apprenticeship programs.

Page 17: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 7 Aerospace Impact Analysis

SECTION 3. STATE INVESTMENTS IN AEROSPACE, 2004-2012 Local, state, and federal agencies have invested heavily to maintain Washington State’s competitive advantage in aerospace, both with the traditional tool of tax incentives as well as with non-tax incentives such as workforce development and infrastructure improvements. While concerted efforts on the part of the Washington State Legislature such as Projects Olympus and Pegasus enabled stakeholders to mobilize and concentrate efforts around a single Boeing program, investments outside of these projects which are not necessarily Boeing-specific continue to be funded statewide. This section details key tax and non-tax incentives which have been essential in supporting Washington State’s aerospace cluster.

Tax incentives constituted the largest portion of Washington State’s direct investments in aerospace between 2004 and 2012.1 Expressed in 2012 dollars, deferred tax revenues totaled an estimated $978 million over this period, equal to 69% of total direct investments (Exhibit 3).

Exhibit 3. Distribution of State Investments in Aerospace by Investment Type, Cumulative, 2004-2012 (expressed in millions 2012 $)

Sources: Community Attributes Inc.; Washington State Department of Revenue; U.S. Bureau of Economic Analysis.

1 Annual aerospace tax preferences savings accrued to businesses were reported by the Washington State Department of Revenue by fiscal year. Estimates above reflect adjustments to these totals to reflect calendar year totals.

Page 18: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 8 Aerospace Impact Analysis

Tax Incentives Effective in 2003 when they were created by the State Legislature, tax incentives, largely in the form of preferential B&O rates, have been a key tool in supporting Washington State’s aerospace cluster. Washington State’s lack of an income tax, combined with other tax incentives for aerospace companies outlined below, has allowed the industry to prosper.

The Washington State Department of Revenue extends preferential tax incentives to manufacturers, wholesalers, and retailers of commercial airplanes, their component parts, tooling used for aerospace, and to repair stations and suppliers to aerospace. In 2008, the Washington State Legislature extended the incentives to aerospace tooling manufacturers, some non-manufacturers, and all certified Federal Aviation Regulation Part 145 repair stations operating in Washington State (Moss Adams, 2013). These incentives include a preferential B&O tax rate, a B&O tax credit, sales and use tax exemptions on hardware and peripherals, and a B&O tax credit on property taxes paid (Exhibit 4).

Exhibit 4. Aerospace Tax Incentives Overview, Washington State

Source: Washington State Department of Revenue, 2013.

Page 19: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 9 Aerospace Impact Analysis

The amount of incentives claimed has increased from nearly $60 million in 2007 to $177 million (preliminarily) for the 2013 fiscal year. Exhibit 5 shows that the majority of the incentives aerospace companies claimed are comprised of two B&O preferences. In 2012, the preferential B&O rate for manufacturing, wholesale, and retail of commercial aircraft comprised 53% of total preferences, while the B&O credit for aerospace manufacturers for preproduction development expenditures accounted for 35% of total preferences (Exhibit 5).

Aerospace product development includes “Research, design and engineering activities performed in relation to the development of an aerospace product or of a product line, model, or model derivative of an aerospace product, including prototype development, testing, and certification” as well as “tool design and engineering design for the manufacturing process.” The Sales and Use tax exemption for computers and peripherals is eligible for “computers, software, and peripherals used primarily (more than 50% of the time) in development, design, and engineering of aerospace products, or in providing aerospace services.” The B&O tax credit for property tax paid is only eligible for buildings and land used exclusively to manufacture commercial airplanes and components (Washington Department of Revenue, 2010).

Page 20: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 10 Aerospace Impact Analysis

Exhibit 5. Aerospace Sector Tax Savings Actuals by Fiscal Year,* estimated, and forecast, millions USD (nominal and estimated for 2012)

*Fiscal years in Washington State run from July 1 through June 30 of the following year. Fiscal year 2013 started on July 1, 2012 and ended on June 30, 2013. Source: Washington State Department of Revenue, 2013.

While the Department of Revenue does not officially release data on the distribution of aerospace tax incentive business savings by county, estimates can be made based on the average incentive cost per employee among facilities across the state using the credit. For instance, in 2011 (latest data available), 356 facilities belonging to 338 firms across the state took advantage of manufacturing, non-manufacturing (for example, research & design), and FAR 145 repair and maintenance incentives (Exhibit 6). These facilities were highly concentrated in areas in and around Seattle, Everett, Kent, Tacoma, Spokane, Yakima, and Bellingham.

Preferential B&O Rate for Mfg, Wholesale and Retail of Commercial Aircraft

Preferential B&O Rate FAR Certified Repair Station

B&O Tax Credit for Aerospace Product Development

B&O Tax Credit for Aerospace Manufacturers for Preproduction Development Expenditures

B&O Tax Credit for Property Taxes on Land/Buildings

Sales & Use Tax Exemption for Computers Used in Development & Design

Page 21: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 11 Aerospace Impact Analysis

Sources: Community Attributes Inc.; Washington State Department of Revenue.

Exhibit 6. Aerospace Facilities that Used Tax Incentives, by Employment Size, 2011

Source: Washington State Department of Revenue, 2013.

Page 22: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 12 Aerospace Impact Analysis

Facilities that utilized aerospace tax incentives in 2011 employed nearly 100,000 workers. Almost 70,000 of these workers were employed across five Boeing facilities in Everett, Renton, Seattle, Auburn, and Frederickson, of which more than 39,000 workers were employed in Everett (Exhibit 6).

In 2011, Snohomish County aerospace firms received an estimated $66.6 million in aerospace incentives, while King County firms received $56.5 million in incentives (Exhibit 7). Together, Snohomish and King Counties accounted for some 90% of incentives across the state. Statewide, the majority of the incentives claimed by firms were for manufacturing, which accounted for nearly 94% of all incentives. The exception to this was in Whatcom County, where the share of FAR incentives by dollar value were as large as for manufacturing (40%).2

2 Estimates are for 2011 calendar year, which is a modification to the fiscal year data as reported by the Washington State Department of Revenue.

Page 23: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 13 Aerospace Impact Analysis

Exhibit 7. Estimated Distribution of Aerospace Incentives by County, 2011

Exhibit 7. Estimated Distribution of Aerospace Incentives by County, 2011

Source: Washington State Employment Security Department, 2013.

Page 24: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 14 Aerospace Impact Analysis

Non-tax Investments in Aerospace Non-tax investments refer to investments in workforce development, education, capital and infrastructure improvements, as well as Community Economic Revitalization Board (CERB) and Governor’s Strategic Economic Reserve Funding. Washington State investments in Projects Olympus and Pegasus are outlined in Exhibit 8, while a more detailed perspective on investments by project is included in Exhibit 9 and Exhibit 10. A discussion of investments in Spokane County’s aerospace infrastructure is included, with estimates for local and federal investments.

Exhibit 8. Non-Tax State Investments, Washington State, 2003-2012

Source: Project Olympus Master Site Agreement, 2003; Office of Governor Chris Gregoire, 2011; Greater Spokane Incorporated, 2013.

Project OlympusWorkforce Amount

$13,000,000$10,000,000$23,000,000

Capital/Land $2,500,000$238,000,000$31,000,000$34,000,000$35,000,000

$340,500,000

Other $3,085,000$50,000

$3,135,000

$366,635,000

Project PegausWorkforce $450,000

$7,600,000$1,500,000$9,550,000

Expanding UW & WSU capacityCenter for Aerospace Technology Innovation

Port Improvements747 investments

CERB Loans & GrantsGovernor's Strategic Reserve Funds

Total for Project Olympus

Skills Center establishment

DescriptionUse of 8 State funds for workforce developmentEmployment Resource Center

Land acquisitionSR 527, I-5Port/Rail Improvements

Page 25: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 15 Aerospace Impact Analysis

Project Olympus Infrastructure Investments

The State of Washington invested heavily in the aerospace sector as a result of Project Olympus, and the majority of the investments were in capital and land improvements. First, the State of Washington had to secure the 8.89 acres for the main facility. The land was purchased from Boeing for $2.5 million by the Port of Everett and leased back to Boeing at a rate of $220,000 per year, for 20 years (Bowermaster, 2004). Water, sewer, process wastewater and natural gas lines had to be extended to the facility. A new solid waste landfill was created, and storm water retention and control was improved.

Road improvements included a new HOV lane in each direction on I-5 as well as auxiliary lanes on the interstate, and the widening of State Road 527 to five lanes at a cost of $238 million to the State, City of Everett, and WSDOT. Rail improvements included a Port of Everett rail to dock facility, BNSF service, and right-of-way acquisition at a cost of $15.5 million to the State. Port of Everett improvements included upgrading for Panamax cranes, expedited installation of Mount Baker Terminal, and priority to Boeing for access, at a cost to the Port of Everett of $34 million.

Workforce Development

Boeing was offered the use of up to $13 million in resources from 8 State funds aimed at recruiting, assessment, training development, and delivery of skilled workforce for Boeing. Additionally, the State agreed to spend a minimum of $10 million on the design, construction, and maintenance of an Employment Resource Center designed to provide staffing to Boeing and its suppliers.

747 Incentives

Paine Field invested $35 million in their Dreamlifter operations center, which involved modifying 4 Boeing 747s to carry major assemblies of the 787 from sites around the world to the final assembly site in Everett. This involved parking space for 4 747s, maintenance and office space, and hangars.

Other Incentives

For the project, an office of coordinators was created, including project, permit, incentive, workforce development, and 747-400 LCF transportation infrastructure. Necessary development rights were pre-approved and permitting processes were expedited by the City of Everett. Prior to Boeing announcing that it would locate the facility in Everett, former Governor Gary Locke signed an unemployment reform bill which was estimated to save Boeing and other businesses $158 million from 2002-2005 (Cook, 2002).

Page 26: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 16 Aerospace Impact Analysis

Community Economic Revitalization Board (CERB) and Governor’s Strategic Economic Reserve Funding

CERB loans and grants are economic development tools from the State of Washington that fund jobs in the public and private sector, rural economic development infrastructure, and studies which evaluate high-priority economic development projects. Similarly, The Governor’s Economic Development Strategic Reserve Account is an account created in the State treasury to be solely used for workforce development, public infrastructure needed to spur private development, or other assistance related to economic development. CERB and Governor’s Strategic Economic Reserve Funding related directly to Project Olympus was granted to:

Esterline ($1.7 million loan, $300,000 grant),

Washington Aerospace Training Center ($500,000 loan)

BE Aerospace ($585,000 loan, plus a grant of $50,000 from the Governor’s Strategic Reserve Fund).

Total Project Olympus Non-tax Investments

Total State funding related to capital projects and workforce development for Project Olympus included $363 million (Exhibit 9). Additional incentives for Project Olympus came in the form of Community Economic Revitalization Board (CERB) and Governor’s Strategic Economic Reserve Funding , and totaled $3.1 million.

Page 27: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 17 Aerospace Impact Analysis

Exhibit 9. Non-Tax State Investments in Project Olympus

Type of Benefit Description of Improvement Cost of Improvement Source of Funds Everett Facilities Site Land acquisition $2.5 million State Water improvement Extension of water line, minimum pressure, penalty for service disruption,

natural disaster mitigation plan Rate revenues or tariffs City of Everett

Sewer improvement Extension of sewer line, penalty for service disruption, natural disaster mitigation plan Rate revenues or tariffs City of Everett

Solid waste disposal Solid waste landfill to have liner and leachate collection, capacity to

segregate recyclables Rate revenues or tariffs County of Snohomish Process wastewater Extension of waste line to facilities site, natural disaster disruption plan Rate revenues or tariffs City of Everett

Storm water Installation of oil/water separators, Storm water retention including bio-

filtration Rate revenues or tariffs City of Everett, State Natural gas infrastructure Extension of gas line, option to buy on open market, construction of a new

lateral Rate revenues or tariffs State/PSE

Electricity service Redundancies, underground feeds, option to buy on open market, natural disaster mitigation plan Rate revenues or tariffs State/ Public Utility District

Telecommunications Telephony, Internet & data services, Wireless networks Rate revenues or tariffs State Road Improvements Widening of SR 527, auxiliary lanes on 1-5 $238 million State, City of Everett, DOT Port/Rail Improvements Port of Everett barge to rail shipping facility, BNSF service, right of way

acquisition $31 million; $15.5 million State grant Port of Everett/State

Port Improvements Pacific Terminal Facility upgrades to accommodate Panamax cranes, Other shipping improvements/expansion Boeing for Port access $34 million

Port of Everett Runway and Airport Upgrades 3 mile zoning radius around airfield, allowing 24 hour engine test, taxiways

meeting national standards Not in budget State will work with Boeing to find funds

Workforce Development Recruiting, assessment, training development, delivery up to $13 million in resources 8 State funds

Workforce Development Design, construction, and maintenance of an Employment Resource center minimum $10 million State 747-400 LCF program improvements Waiving of landing fees, ensuring that 747-400 LCF is eligible for all

benefits from the 7E7 Program, Foreign Trade Zone status if requested $5 million State

Office of Coordinators Project, permit, incentive, workforce development, 747-400 LCF

transportation infrastructure, and Everett coordinators State

Expedited Permitting Pre-approved development and permit rights, permit coordination between

agencies City of Everett

Aerospace Futures Board Establishment of a panel of industry employers to plan production,

assembly workforce staffing State

Workforce Development Establishment of an Aerospace Manufacturing Degree Program State Source: Project Olympus Master Site Agreement, 2003

Page 28: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 18 Aerospace Impact Analysis

Project Pegasus To keep the successor to the 737 in Washington State, former Governor Chris Gregoire launched a task force to identify deficiencies in Washington State which could jeopardize the chances of Boeing siting the future 737 in the state. Gregoire revealed a nearly $10 million plan to address issues raised in a 2011 Washington Aerospace Partnership report. Funds were used to improve short-term training programs for prospective machinists, and to accommodate an increase in engineering students at Washington State’s research universities. The proposal included initiatives for education (Exhibit 10), the creation of a government task force, and an extension of an existing aerospace tax incentive for pre-production expenses from 2024 to 2034.

Total Pegasus Non-tax Investments

Total State of Washington investments related to Project Pegasus, all related to workforce development, sums to $9.5 million (Exhibit 10).

Exhibit 10. Non-Tax State Investments in Project Pegasus

Source: Office of Governor Chris Gregoire, 2011

Spokane’s Investments in Aerospace

In addition to King and Snohomish counties, Spokane has emerged as a location for machining and finishing, component manufacturing, and maintenance, repair, and overhaul aerospace firms. As a result of a 2011 report by the Washington Aerospace Partnership which reported on Spokane’s aerospace manufacturing concentration as well as their lower wage rate relative to other statewide regions, Spokane has continued to invest in its aerospace capacity through local, state, and federal sources of funding.

Infrastructure Investments

A program to certify two 300 acre sites adjacent to Spokane International Airport for aerospace production or manufacturing was undertaken with funding from

Type of Benefit Description of Improvement Cost of Improvement Educational/Workforce Providing 12 high schools with aerospace

curriculum support; provide two Skills Centers with aerospace manufacturing support

$450,000

Educational/Workforce STEM curriculum at 10 high schools $250,000 Educational/Workforce Expanding capacity at the University of

Washington and Washington State University to enroll 775 more engineering students

$7.6 million

Educational/Workforce Creation of a Center for Aerospace Technology Innovation at UW and WSU

$1.5 million

Page 29: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 3. State Investments in Aerospace

Washington Aerospace Partnership November 2013 Page 19 Aerospace Impact Analysis

the City of Spokane, Spokane County, Spokane International Airport, Avista Corporation and Greater Spokane Incorporated, known as AIR Spokane. Improvement for these sites included taxiway extensions, SEPA certification, and permitting assistance. While $120,000 has already been spent for certification, $33 million is allocated for future investments in these Community Certified sites, $6 million of which will come from a HUD loan.

Workforce Development

Workforce training has been funded through AIR Spokane by the Spokane Area Workforce Development Council, the Washington State Board for Community and Technical Colleges, Community Colleges of Spokane and the U.S. Department of Labor Employment and Training Administration. Workforce programs included capacity expansion in three aerospace training programs, development of four new programs for testing and aviation maintenance technology, classroom and on the job training, and new equipment and faculty in community colleges.

Community Economic Revitalization Board (CERB) and Governor’s Strategic Economic Reserve Funding

State funding was also granted to private aerospace firms in Spokane County such as Cascade Aerospace USA and XN Air in the form of CERB grants, and loans, and Governor’s Strategic Economic Reserve Investment funding. Total CERB funding received in the county from 2005-2010 included $8 million, which came in the form largely loans ($7.25 million). Another $340,000 came from Governor’s Strategic Reserve funds, for a notable State investment in Spokane aerospace companies of $8.3 million.

Total Spokane Non-tax Investments

The projects mentioned above, combined with additional investments in aerospace worth $31 million, totaled $79.4 million from local, state, and federal sources; $14.5 million of this has already been spent, and the remaining $64.9 million is committed for future investment.

Page 30: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 20 Aerospace Impact Analysis

SECTION 4. MEASURES AND IMPACTS The economic breadth of the aerospace industry in Washington State extends across establishments (business locations), jobs, wages, sales, and tax revenues. The sections below review each of these areas of impact, with detailed breakouts for aerospace as a whole and for Boeing Commercial operations in Washington State.

Establishments Aerospace in Washington State

In 2012, there were an estimated 175 aerospace establishments in Washington State, with an additional 1,175 establishments in sectors identified as connected with the aerospace supply chain. Aerospace establishments have declined in number every year since 2008, though this may be more indicative of business consolidation than an overall decline in the industry. In fact (as discussed further below), the employment footprint of the industry has grown substantially since 2008.

Related establishments include such diverse activities as machine shops, materials, testing, and other forms of manufacturing. In 2012, the majority of establishments (aerospace and related) were located in the counties of King (478), Snohomish (219), Spokane (108), Pierce (101), and Clark (84), though an additional 360 establishments were distributed across another 30 counties across the state (Exhibits 11 and 12).

Boeing Locations in Washington State

Boeing’s five major manufacturing facilities are located in Everett, Renton, Seattle, Auburn, and Frederickson, with the last two engaged primarily in fabrication activities. In addition to these locations, Boeing has corporate and support locations in Seattle, Bellevue, Kent, and Redmond.

The Everett facility is the largest single Boeing facility in the state, with nearly 40,000 workers directly assigned or indirectly supporting Boeing’s four twin aisle aircraft and Interior Responsibility System (which also supports the 737 program). Employment breakouts by facility are discussed further below under “Jobs.”

Page 31: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 21 Aerospace Impact Analysis

Exhibit 11. Aerospace and Related Establishments by County, 2012

Exhibit 11. Aerospace and Related Establishments by County, 2012 Exhibit 11. Aerospace and Related Establishments by County, 2012

Source: Washington State Employment Security Department, 2013.

Page 32: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 22 Aerospace Impact Analysis

Exhibit 12. Aerospace and Related Establishments by County, with Subsector Breakouts, 2012

Sources: Revel Consulting; Community Attributes Inc.; U.S. Bureau of Labor Statistics; Washington State Employment Security Department.

Page 33: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 23 Aerospace Impact Analysis

Revenues Aerospace

Revenues in aerospace are measured using gross business income (GBI), which captures gross receipts from businesses throughout the state before deductions. In 2012, the aerospace industry reached $51.2 billion, with another $8.7 billion generated by firms in related sectors. Even after adjusting past annual sales for inflation, 2012 marked the most successful year for aerospace industry sales on record. Total aerospace and supporting industry revenues grew by $15.9 billion, representing 35% growth between 2010 and 2012 (Exhibit 13). Aerospace sales ($51.2 billion) represented a 44.7% increase over 2010 and exceeded previous revenue highs from the late 1990s (expressed in 2012 dollars).

The largest gains among related sectors between 2010 and 2012 were among fabricated metal product manufacturing (with an increase of $245.5 million in sales), instrument manufacturing for measuring and testing electricity and electrical signals (with an increase of $238.5 million), and other electronic components manufacturing (with an increase of $207.9 million).

Exhibit 13. Gross Business Income Aerospace and Related Sectors, 2004 - 2012

Sources: Washington State Department of Revenue; U.S. Bureau of Economic Analysis; Community Attributes Inc.

$28.6 $31.2$38.8 $42.1

$33.7$39.3 $36.7 $39.7

$51.2

$4.9$5.5

$6.0$6.9

$7.2

$6.4$7.3

$8.1

$8.7

$33.5$36.7

$44.8$49.0

$40.9$45.8 $44.1

$47.8

$59.9

$0

$10

$20

$30

$40

$50

$60

$70

2004 2005 2006 2007 2008 2009 2010 2011 2012

Billions (2012 $)

Related

Aerospace

Page 34: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 24 Aerospace Impact Analysis

A major source of aerospace sales has been exports. In 2012, aerospace exports originating in Washington State reached an historic peak of $37.1 billion—equal to 49% of all Washington State exports by value in 2012 (Exhibit 14). The largest foreign markets for aerospace products were China ($4.9 billion); United Arab Emirates ($4.8 billion); and Japan ($4.7 billion). While Boeing aircraft sales drive the major of these totals, many local suppliers are also doing business with Airbus, Bombardier, and other OEMs outside the U.S.

Exhibit 14. Washington State Aerospace Exports, 2007 - 2012

Sources: Washington State Department of Commerce, U.S. Bureau of Economic Analysis; Community Attributes Inc.

Boeing Revenues

In 2012, Boeing reported total deliveries of 601 aircraft, a 124 aircraft increase over 2011 and a 113.9% increase over 2003 (Exhibit 15). The largest gains were among models belonging to the 737 family, which saw a 139.9% increase over 2004. The 777 line increased from 36 deliveries in 2004 to 83 in 2012, a more than two-fold increase over this period. The largest portion of Boeing sales have historically been exports to foreign carriers. More recently, China has emerged as Boeing’s top foreign market with 79 deliveries in 2012.

$29.9

$22.7

$27.8$24.2

$27.6

$37.1

$0

$5

$10

$15

$20

$25

$30

$35

$40

2007 2008 2009 2010 2011 2012

Billions (2012 $)

Page 35: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 25 Aerospace Impact Analysis

Exhibit 15. Boeing Aircraft Deliveries, 2000 – 2012

Sources: The Boeing Company; Community Attributes Inc. *Historic data include domestic sales to the U.S. Navy and U.S. Air Force.

Sales per aircraft line reflect average negotiated sale prices per client, which in turn are driven by a set of (often undisclosed) considerations. The actual price of an aircraft (for example, based on the discount offered) can be shaped by the size of a given order, the credit worthiness of the customer, and/or customized offerings, among many other factors. However, while Boeing does not publish the average cost per aircraft, it does publish gross commercial sales, the list price per model, and deliveries. For instance, in 2012 Boeing delivered 601 aircraft (Exhibit 15), of which an estimated two were manufactured outside of Washington State (the first two 787 deliveries out of Charleston, South Carolina). Using this information, sales by aircraft line in Washington State (for example, output) can be estimated by multiplying out deliveries by list price and then controlling to total reported Boeing Commercial Aircraft sales, and then correcting for South Carolina deliveries.

Based on this method, in 2012 the estimated average costs of each aircraft family are presented in Exhibit 16. For example, the estimated average actual price for a 737 in 2012 was $49.8 million, compared with a list price for 2013 orders ranging between $76.0 million (737-700) to $109.9 million (737 MAX 9). An important

288368

211127 139 134 159 154 140 159 169 129

185

204

159

170

154 146 156

239 287235

322 293 348

416

492527

381

281 285 290

398441

375

481 462 477

601

0

100

200

300

400

500

600

700

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Deliveries

Foreign

Domestic

Page 36: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 26 Aerospace Impact Analysis

consideration, in addition to the factors influencing the extent of discount off the list price for each customer, is that prices estimated for 2012 reflect negotiated prices as far back as 2006, and thus reflect a discount on the list price during the time of negotiation, not based on 2013 list prices. These estimates sum to total sales (output) by Boeing Commercial in Washington State of $48.9 billion in 2012.

Exhibit 16. Estimated Boeing Commercial Aircraft Sales from Washington State, 2012

Aircraft Family Est. Average Sale Price ($ millions)

Deliveries from Washington

State

Total Washington Sales ($ millions)

737 $49.8 415 $20,672 747 $196.5 31 $6,091 767 $102.5 26 $2,663 777 $173.0 83 $14,360 787 $115.5 44 $5,080

TOTAL 599* $48,869

*Note: Two aircraft were credited to South Carolina, explaining the discrepancy between total deliveries and those from Washington State in 2012. Sources: The Boeing Company; Community Attributes Inc. **Note: some columns may not sum to total due to rounding.

Page 37: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 27 Aerospace Impact Analysis

Jobs Aerospace in Washington State

In 2012, 175 establishments classified as “aerospace” (NAICS 3364) employed more than 94,200 across the state, equal to approximately 3.3% of all non-farm employment in Washington State (the highest share since 1999, when aerospace firms employed 3.7% of the State’s non-farm workforce). An additional 38,300 workers were employed in sectors closely tied to aerospace, such as plastics manufacturing, machine shops, and electronic component manufacturers.

Washington State’s aerospace employment constituted 19% of total aerospace employment in the U.S. Aerospace employment in the state experienced its second consecutive year of annual growth, with 2012 employment representing an 8.8% increase over 2011. Moreover, Washington State’s 2012 employment of 94,224 workers was the highest level since 1999.

The industry has long followed a decennial cyclical employment trend of peaks and valleys going back to 1975, evidenced in Exhibit 17. The industry peaked in employment in the early and late 1990s, followed by annual declines through 2004; since then, the current cycle has added nearly 33,000 jobs (Exhibit 18).

Exhibit 17. Historic Employment in Aerospace, Washington State (1975-2012)

Sources: Washington State Office of Financial Management; Community Attributes Inc.

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Page 38: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 28 Aerospace Impact Analysis

Exhibit 18. Washington State's Aerospace Employment (LHS) and Share of U.S. Aerospace Employment (RHS), 2001 - 2012

Sources: U.S. Bureau of Labor Statistics; Community Attributes Inc. *Preliminary 2012 annual data subject to revision.

Aerospace and related employment, including a larger set of activities that extend into other supporting manufacturing, air transport, and materials, provided 132,500 jobs at 1,350 establishments across the state. Total jobs in 2012 were up by 15,000 since 2007, representing a 12.8% increase. The aerospace sector alone added 7,600 jobs between 2011 and 2012, and 13,400 since 2010 (Exhibit 19). Among related sectors, some of the largest two year employment gains came in relay and industrial control manufacturing (592 jobs, 37% growth), other electronic component manufacturing (257 jobs, 12% growth), and special die and tool manufacturing (176 jobs, 27% growth).

87,2

43

75,6

53

65,2

74

61,3

84

65,6

16 73,1

80 80,0

36

82,9

32

82,9

20

80,7

62

86,5

77 94,2

2417%

14%

19%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*

Jobs

Share of U.S. aerospace workforce

Page 39: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 29 Aerospace Impact Analysis

Exhibit 19. Aerospace and Related Employment, 2007 - 2012

Sources: Community Attributes Inc.; Washington State Employment Security Department.

Across the state, the highest concentration of aerospace jobs in 2012 was in the Central Puget Sound region. Approximately 48.3% (45,490 jobs) of all direct aerospace jobs were based in Snohomish County, with another 46.8% (44,076 jobs) in King County (Exhibit 20). Of the remainder, more than 2,400 jobs were based in Pierce County with another 876 in Spokane County.3

3 Employment data for some counties is suppressed due to non-disclosure restrictions.

Related

Aerospace

Jobs

Page 40: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 30 Aerospace Impact Analysis

Sourc es: Community Attributes Inc.; Washington State Employment Security Department.

Exhibit 20. Aerospace and Related Employment, Statewide, 2012

Source: Washington State Employment Security Department, 2013.

Page 41: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 31 Aerospace Impact Analysis

Among aerospace-related activities, the largest concentrations were in King County (21,405), Snohomish County (5,326), and Spokane County (2,934). Within King County, the largest related subsector employment was in passenger air transportation (9,785 workers), followed by other airport operations (2,735). Both King and Snohomish Counties enjoyed sizable workforce totals in machine shops, with 1,459 reported jobs in Snohomish County and 1,340 in King County. King County was also home to more than 1,400 jobs in navigation, guidance, and nautical system manufacturing, while there were more than 1,400 workers employed in Snohomish County in Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals in 2012; both activities provide technical and component support for final aircraft production.

Boeing

Boeing is the single largest private sector employer in Washington State. As of August 2013, the company employed 84,442 workers across the state. An estimated 73,000 workers are engaged in Boeing Commercial activities tied, either directly or in supporting roles, to the five major commercial aircraft programs in the state—the 737, 747, 767, 777, and 787. The remaining workforce is tied directly or indirectly to non-commercial activities, for example, military-related projects, the space program, and energy.

Between 2004 and 2013 (as of August 2013), Boeing’s employment in Washington State increased 59.1%, with the addition of 31,400 employees across all units (Exhibit 21). Boeing’s manufacturing employment in Washington State has grown even faster, gaining 29,600 jobs—equal to a 68.8% increase over 2004.

Boeing Commercial manufacturing activities extend across five facilities, all of which are located in the Puget Sound region. Everett and Renton are home to Boeing’s two aircraft final assembly facilities in Washington State. The Everett facility employs nearly 40,000 workers; most of these workers are engaged directly or indirectly in the four twin aisle aircraft lines, though the Interiors Responsibility Center provides support for the single-aisle 737 (in addition to all other lines).

The Renton facility is home to final assembly of the 737, the most successful commercial aircraft in history, as well as the Boeing Business Jet program. As of 2011, the facility employed more than 11,500 workers. Nearly half of these workers in 2011 were in non-construction-related production activities, and among these two-thirds earned at least $30/hour. Another 19% of the workforce belonged to the occupational category “computer, mathematical , architecture, and engineering,” of which 98% earned at least the equivalent of $30/hour (Washington State Department of Revenue, 2013).

Page 42: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 32 Aerospace Impact Analysis

Exhibit 21. Boeing Employment in Washington State, 2004 – 2013*

*Estimate by Community Attributes Inc. **As of August 2013. Source: The Boeing Company. For 2012 and 2013, breakouts by manufacturing and other are estimates. Sources: Washington State Department of Revenue; The Boeing Company; Community Attributes Inc.

There are also three additional manufacturing facilities in Washington State that provide support for final assembly. The Frederickson and Auburn facilities provide fabrication services and some composite manufacturing work, while the Seattle-Tukwila facility provides commercial aviation services. As of 2011 (the latest data available), these facilities employed in aggregate 18,532 workers, of which 24% belonged to computer, mathematical, architecture, and engineering occupations.

43,036 48,415 52,532 57,039 57,382 59,132 59,849 69,358 71,600 72,600

10,035 6,493

15,638 12,454 14,612 11,608 12,426

11,286 11,600 11,800

53,071 54,908

68,170 69,493 71,994 70,740 72,275

80,644 83,200 84,400

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013**

Jobs

Other

MfgSites

Page 43: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 33 Aerospace Impact Analysis

Exhibit 22. Estimated Boeing Employment across Washington State

Sources: Community Attributes Inc.; Washington State Department of Revenue.

Among all five manufacturing facilities, the Everett facility exhibited the largest employment growth between 2004 and 2011, with a more than 100% increase (Exhibit 22). Across all manufacturing facilities, an additional 14,034 workers were classified as belonging to the occupational category “installation and production” and 1,784 workers are in “computer, math, architecture, and engineering” in Everett.

In 2012, an estimated 73,000 Boeing workers within Washington State were engaged in commercial activities. Of this total, an estimated 47,000 workers were directly involved in aircraft production, while another 25,900 workers were deployed in activities that indirectly support final assembly, for example, customer support, finance, accounting, corporate functions within Washington State, and general overhead.

The 737 had the largest employment footprint in 2012—an estimated 9,600 workers were directly involved in 737 final production, plus an addition 10,900 workers in supporting indirect activities within the Boeing Company in Washington State. The 777 represented the second largest employment footprint among Boeing’s commercial production lines; in 2012, the program in Washington State included an estimated 12,100 direct jobs and 7,600 within-company indirect jobs, for a sum total of 19,700 workers (Exhibit 23).

Site Activity(s) 2004 2011 Change, '04-'11 2012 (est.)Auburn Fabrication Division 4,327 5,458 26.1% 5,800 Everett Twin-Aisle final assembly -- 787, 747, 767, 777 18,747 39,288 109.6% 39,500 Frederickson Fabrication Division -- Composite Manufacturing Center,

Skin & Spar991 1,563 57.7%

1,700 Renton Single-Aisle final assembly -- 737, Boeing Business Jet 8,134 11,538 41.8% 12,200 Seattle-Tukwila Commercial Aviation Services 10,837 11,511 6.2% 12,200 Subtotal, Manufacturing Sites 43,036 69,358 61.2% 71,400 Other Sites

Harbour Pointe 1,300 Bellevue 2,700 Kent 2,600 Redmond 20 Boeing Spares 900 Triton Towers (Renton) 4,300

Subtotal, non-Manufacturing Sites 10,035 11,286 12.5% 11,820 Total Statewide Employment 53,071 80,644 52.0% 83,220

Page 44: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 34 Aerospace Impact Analysis

Exhibit 23. Estimated Boeing Employment by Production Line in Washington State, 2012

Sources: Industry sources; Community Attributes Inc.

Wages and Occupations Wages paid out among aerospace firms totaled more than $9.1 billion, or approximately $96,684 per covered employee (Exhibit 24). Compared with historic data adjusted for inflation, wages have been low relative to the first half of the 2000s. However, average wage level differences may also reflect differences in the composition of workers and activities within aerospace, for example, changes in the ratio of engineers to production line workers.

Gross wage and salary disbursements for covered employment in aerospace and related industries, excluding benefits, totaled $11.5 billion in 2012, of which $9.1 billion were paid to workers employed in aerospace firms. Total wages paid out grew by nearly $1.7 billion between 2008 and 2012 (adjusted to 2012 dollars), representing a 17.0% increase over this period. Among strictly aerospace firms, wages grew by nearly $1.5 billion, or 19.2%. On a real (2012 dollar) per capita basis, average wages among direct aerospace jobs fell 2.9% year-over-year in 2012, but remained 4.9% above the average wage in 2008 (Exhibit 25).

By comparison, direct aerospace wages paid more than 86% above the Washington State average in 2012. While this relative difference has come down since 2006 (when aerospace wages were 110% above the state average), vagaries in wages may reflect shifting demographics within the aerospace workforce, as older workers retire and new hires (at a lower pay range) grow as a share of the workforce.

Program-specific Indirect within Boeing Total737 9,600 10,900 20,500 747 6,200 3,200 9,400 767 5,100 1,400 6,500 777 12,100 7,600 19,700 787 14,000 2,800 16,800

Total 47,000 25,900 72,900

Page 45: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 35 Aerospace Impact Analysis

Exhibit 24. Average Annual Wage, Aerospace Industry in Washington State (Adjusted for inflation to 2012 dollars based on consumer price index*),

1990 – 2012

Sources: U.S. Bureau of Labor Statistics; Community Attributes Inc. *Estimates are adjusted for inflation using the Urban Western Region consumer price index (CPI).

$71,

464

$70,

166

$75,

078

$81,

380

$75,

160

$79,

608

$80,

741

$78,

100

$76,

088

$80,

721

$82,

860

$83,

566

$89,

912

$90,

510

$93,

608

$98,

308

$101

,847

$94,

968

$92,

162

$93,

331

$96,

148

$99,

305

$96,

688

$0

$20,000

$40,000

$60,000

$80,000

$100,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Wage, 2012 $

Page 46: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 36 Aerospace Impact Analysis

Exhibit 25. Wages, Aerospace and Related,* 2007-2012

Sources: Washington State Employment Security Department; U.S. Bureau of Labor Statistics; Community Attributes Inc.

Aerospace Wages and Occupations

Key aerospace occupations in Washington State include:

Aircraft Structure, Surfaces, Rigging, and Systems Assemblers assemble, fit, fasten, and install parts of airplanes, such as tails, wings, fuselages, bulkheads, and more.

Aerospace Engineers design aircraft, spacecraft, satellites, and missiles.

Industrial Engineers find ways to eliminate wastefulness in production processes.

Aircraft Mechanics and Service Technicians diagnose, adjust, repair, or overhaul aircraft engines and assemblies, such as hydraulic and pneumatic systems.

Materials Engineers evaluate materials and develop machinery and processes to manufacture materials for use in products that must meet specialized design and performance specifications.

Aerospace engineering and operations technicians operate and maintain equipment used in developing, testing, and producing new aircraft with computer-based modeling and simulation tools.

$7.6 $7.6 $7.7 $7.8$8.6 $9.1

$2.3 $2.2 $2.1 $2.2$2.4

$2.4$9.9 $9.8 $9.8 $10.0$11.0

$11.5

$0

$2

$4

$6

$8

$10

$12

$14

2007 2008 2009 2010 2011 2012

Billions 2012 $

Aerospace

Related

Page 47: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 37 Aerospace Impact Analysis

Industrial engineering technicians plan ways to effectively use personnel, materials, and machines in factories.

Avionics technicians install, inspect, test, adjust, or repair avionics equipment.

Mechanical Drafters prepare detailed working diagrams of machinery and mechanical devices, including dimensions, fastening methods, and other engineering information.

Exhibit 26. Select Aerospace Occupations and Median Wage, Washington State, 2012*

*Wage is not specific to aerospace-related employment, but to the occupation. Source: Bureau of Labor Statistics, 2012.

Median wage for these occupations is displayed in Exhibit 26. Median wage is higher than the state median wage ($51,000 in 2012) for all occupations with the exception of Aircraft Structure, Surfaces, Rigging, and Systems Assemblers. In the case of Aerospace Engineers, the median wage is nearly twice the state median wage.

The location quotient is an analytic statistics that measures the concentration of a given activity relative to a benchmark, in this case the U.S. average. For instance, if a given occupation in Washington State has an employment location quotient of 2.0, this indicates that occupation as a share of Washington State’s workforce is twice that of the U.S. overall concentration. Exhibit 27 shows location quotients for key aerospace-related occupations in 2012.

The occupation “Aircraft Structure, Surfaces, Rigging, and Systems Assemblers” was nearly 15 times more concentrated in Washington State than it was across the

$48,030

$56,050

$60,960

$67,520

$72,260

$87,460

$100,420

$0 $50,000 $100,000 $150,000

Aircraft Structure, Surfaces, Rigging, and SystemsAssemblers

Aircraft Mechanics and Service Technicians

Avionics Technicians

Aerospace Engineering and Operations Technicians

Mechanical Drafters

Industrial Engineers

Aerospace Engineers

Page 48: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 38 Aerospace Impact Analysis

U.S. in 2012. High concentrations of these aerospace occupations in Washington State are indicative of its prominence as a center of aerospace activities.

With over 13 thousand employees, the occupation with the greatest number of employees is Aircraft Structure, Surfaces, Rigging, and Systems Assemblers (Exhibit 28). Aerospace Engineers are the second most numerous occupation in Washington State’s aerospace industry, followed by industrial engineers.

Exhibit 27. Select Aerospace Occupations by Concentration, Washington State (Location Quotient), 2012

Source: Bureau of Labor Statistics (2013).

1.2

1.8

1.8

2.0

2.2

3.6

3.6

4.7

14.9

0 2 4 6 8 10 12 14 16

Industrial Engineers

Industrial Engineering Technicians

Computer Numerically Controlled MachineTool Programmers, Metal and Plastic

Mechanical Drafters

Aircraft Mechanics and Service Technicians

Aerospace Engineering and OperationsTechnicians

Avionics Technicians

Aerospace Engineers

Aircraft Structure, Surfaces, Rigging, andSystems Assemblers

Location Quotient

Page 49: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 39 Aerospace Impact Analysis

Exhibit 28. Top 10 Washington State Aerospace Occupations by Employment, 2012

Source: Washington State Employment Security Department, 10 Year Occupational Employment Projections (2012).

Boeing Wages and Occupations

Across all commercial programs, approximately 50% of all direct employment were in production & maintenance positions, for example, machinists. Engineers and salaried non-exempt (for example, degreed technical workers) constitute 30% of total direct employment in aircraft manufacturing within Boeing (Exhibit 29). An estimated $7.2 billion in wages were paid out to Boeing Commercial employees in 2012, or $9.7 billion inclusive of benefits.

There exist important differences in the composition of the workforce by production line, which in turn reflect a variety of factors related to aircraft production. Such differences can reflect the age of an aircraft model and its position along a “maturity curve.” For instance, the 737 has the lowest concentration of engineers in its direct workforce (13.5%) due to the age of the line, established technologies and supply chain, and implemented lean practices, whereas the 787 currently has the highest engineering concentration, represent ing approximately a quarter of its direct employment (Exhibit 30). Because these differences in part reflect the relative maturity of each model, it is reasonable to expect over time the share of engineers to decline as technical and supply chain issues are resolved.

572

621

688

899

1,865

2,098

2,102

3,591

7,091

13,225

- 4,000 8,000 12,000

Aerospace Engineering and OperationsTechnicians

Computer Numerically Controlled MachineTool Programmers, Metal and Plastic

Avionics Technicians

Materials Engineers

Mechanical Drafters

Aircraft Mechanics and Service Technicians

Industrial Engineering Technicians

Industrial Engineers

Aerospace Engineers

Aircraft Structure, Surfaces, Rigging, andSystems Assemblers

Jobs

Page 50: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 40 Aerospace Impact Analysis

Exhibit 29. Estimated Boeing Commercial Employment by Occupation, Program-Specific Employment Only, 2012

* “Other” includes subsidiary and contingent labor. **“Salaried non-exempt” refers to technical workers that are represented (along with scientists and engineers) by the Society of Professional Engineering Employees in Aerospace (SPEEA). These positions typically require a bachelor’s degree, but are separate engineers and scientists. Sources: Industry sources; Community Attributes Inc.

Exhibit 30. Boeing Commercial Employment by Production Line and Occupation, 2012 (estimated)

* “Other” includes subsidiary labor and contingent labor. **Note: program-assigned employment numbers do not sum to 47,000 due to rounding. Sources: Industry sources; Community Attributes Inc.

Production & Maintenance

50%

Salaried non-exempt

11%

Engineers19%

Salaried Exempt

9%

Management9%

Other*2%

737 747 767 777 787Production & Maintenance 5,600 3,200 2,000 7,100 5,700 Salaried non-exempt 1,100 600 700 1,100 1,400 Engineers 1,300 1,200 1,300 1,700 3,500 Salaried Exempt 800 400 400 1,000 1,800 Management 700 500 500 1,000 1,300 Other* 100 200 200 200 300 Sub total 9,600 6,100 5,100 12,100 14,000

Indirect Work within Boeing Commercial 10,900 3,200 1,400 7,600 2,800

Total 20,500 9,300 6,500 19,700 16,800

Page 51: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 41 Aerospace Impact Analysis

Indirect and Induced Impacts Indirect and induced impacts refer to additional sales, jobs, and income generated through activities in support of aerospace and Boeing production in Washington State. For instance, indirect impacts include the additional jobs needed and income and revenue generated among Boeing suppliers to support Boeing final production. Induced impacts refer to additional activities across the state supported by the spending of income generated through direct and indirect effects, and jobs, wages, and sales supported as a result.

Structure of the Aerospace Industry in Washington State

The primary tool for assessing the economic impacts of the aerospace industry and Boeing Commercial is the Washington State Input-Output Model (2012). The model is a data-based rendering of the state economy and key transactions across and within 52 sectors representing primary activities (e.g., agriculture, mining), utilities, construction, manufacturing, and services. “Intermediate purchases” within the model refer to goods and services that feed directly into a final production process, for example, direct purchases from suppliers.4

Based on this analysis, the aerospace industry directly purchases, on average, approximately 8% of its total inputs, by dollar value, from suppliers within Washington State, with another 35% of purchases for value added, which includes labor inputs (Exhibit 31). The largest in-state purchases come from within the industry itself, equal to approximately 2% of total purchases, or 25% of in-state intermediate purchases (for example, goods and services from other firms).

Exhibit 31. Estimated Aerospace Industry Purchases by Type, and Top Sources from within Washington State, 2012

Sources: Washington State Office of Financial Management; Community Attributes Inc.

4 Because these estimates only represent direct intermediate purchases, they understate the extent of the aerospace supply chain in Washington State. Indirect effects help better illustrate the multi-tiered nature of the supply in Washington State.

Type of Purchase Share of Total Total Intermediate Purchases (from within Washington) 8.0%

Aircraft and Parts 2.0% Nursing and Residential Care Facilities,

Social Assistance 1.3% Architectural and Engineering / Computer Systems

Design and Related Services 0.8% Other Construction 0.7% Software Publishers & Internet Service Providers 0.6% Legal /Accounting and Bookkeeping /

Management Services 0.5% Wholesale 0.5% Educational Services 0.3% Computer and Electronic Product 0.2% Fabricated Metals 0.2%

Value Added (labor, other value added) 35.3% Imports (domestic and foreign) 56.7%

Page 52: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 42 Aerospace Impact Analysis

Direct within-state intermediate purchases by the aerospace industry in 2012 totaled an estimated $4.1 billion. Estimated additional purchases throughout economy reached more than $1.1 billion, resulting in total in-state direct and indirect purchases of more than $5.2 billion in 2012.

However, many of these purchases reflect activities that are not directly linked with aircraft manufacturing, for instance nursing and resident care and social assistance. A refined list of 25 sectors considered more directly relevant to aircraft final production, and thus belonging to the aerospace supply chain, was constructed from those included in the Washington State Input-Output Model. Among these sectors, the aerospace industry purchased an estimated $2.9 billion in goods in services in 2012 from supply chain businesses in Washington State. Most of these purchases were direct sales to aerospace firms ($2.5 billion), but an additional $382.2 million in sales were made further down the multi -tiered supply chain in the state (Exhibit 32). For instance, while the software industry sold an estimated $292.5 million in services directly to the aerospace industry in 2012, it also sold an additional $25.6 million to other suppliers.

Imports, both from elsewhere in the U.S. and overseas, constitute an estimated 57% of total aerospace purchases in Washington State by monetary value; this estimate is supported by auxiliary information and industry sources that show aircraft production is geographically diversified, with many high value inputs sourced from outside the area. By comparison, only petroleum and coal products and chemical manufacturing have higher import intensities in Washington State, the former representing refineries; the state (weighted) average among manufacturing sectors is 52%, or 50% when excluding aerospace.5

5 When further excluding petroleum and coal products, manufacturing import intensity falls further to less than 44%.

Page 53: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 43 Aerospace Impact Analysis

Exhibit 32. Fifteen Largest Categories of Final Production-related Purchases ($ millions) for Aerospace in Washington State, 2012

Industry Sector Direct Indirect Total Aircraft and Parts Manufacturing 1,024.8 21.0 1,045.7 Architectural, Engineering, and Computing Services

418.9 42.7 461.6

Software Publishers & Data Processing & Related Services

292.5 25.6 318.1

Wholesale 235.9 81.1 317.1 Educational Services 164.9 3.6 168.5 Computer and Electronic Product Manufacturing 105.2 6.5 111.7 Fabricated Metals Manufacturing 91.8 9.9 101.7 Petroleum and Coal Products Manufacturing 30.8 59.2 90.0 Primary Metal Manufacturing 43.4 4.2 47.6 Other Transportation/Postal Offices 11.1 17.3 28.4 Other Manufacturing 25.1 2.4 27.5 Truck Transportation 10.1 16.1 26.2 Other Information 0.7 19.4 20.1 Machinery Manufacturing 14.7 5.2 20.0 Support Activities for Storage, Transportation and Warehousing

3.0 15.9 18.8

Other Supply Chain Purchases* 22.3 52.1 74.4

Total 2,495.1 382.1 2,877.3 *A total of 25 sectors (out of 52) were identified as supporting the aircraft final production. Some sectors, such as hospitals, provide direct services to the aerospace sector, but were considered not directly related to final production activities. Note: Direct and indirect revenues may not sum to totals due to rounding. Sources: Community Attributes Inc.; Washington State Office of Financial Management.

Page 54: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 44 Aerospace Impact Analysis

Economic Impacts of Aerospace in Washington State

In 2012, the aerospace industry supported more than 253,000 jobs across the state (Exhibit 33). An estimated 126,600 jobs were supported through induced effects, for example, through the spending of labor income supported by aerospace activities.

Aerospace as a whole supported nearly $76 billion in total sales across the state and $20 billion in incomes (inclusive of benefits). For every job directly within the aerospace sector in 2012, an estimated additional 1.7 jobs were supported elsewhere in the economy (Exhibit 34).

Exhibit 33. Economic Impacts of Aerospace in Washington State, 2012

*Includes estimated benefits. Sources: Community Attributes Inc.; Washington State Office of Financial Management.

Exhibit 34. Implied Economic Impact Multipliers in Washington State, 2012

Total Jobs / Direct Job

Total Jobs / $1 mils Direct Sales

$ Total Sales / $ Direct Sales

$ Total Income / $ Direct Income

Multiplier 2.69 4.95 1.48 1.67 Sources: Community Attributes Inc.; Washington State Office of Financial Management.

Jobs Revenues (millions $)

Income* (millions $)

Direct 94,200 51,240 11,843 Indirect 32,600 5,209 1,761 Induced 126,600 19,328 6,187 Total 253,400 75,777 19,792

Page 55: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 45 Aerospace Impact Analysis

Economic Impacts of Boeing Commercial in Washington State

Boeing Commercial drives economic growth throughout the Washington State economy. In 2012, Boeing Commercial production lines supported—via direct, indirect, and induced effects—an estimated 208,800 jobs, $16.4 billion in labor income, and $69.9 billion in sales across the state (Exhibit 35). Based on these estimates, for every one job at Boeing Commercial (including program-specific and indirect within the company), an additional 1.9 jobs are supported elsewhere in the state. Likewise, every dollar of income (in direct payments and benefits) at Boeing Commercial supports another $0.70 in income among other firms and industries in Washington State. Every million dollars in sales at Boeing Commercial in Washington State supports 4.3 jobs across the state (Exhibit 36).

Exhibit 35. Boeing Commercial Summary Impacts, Washington State, 2012

Sources: Community Attributes Inc.; Washington State Office of Financial Management.

Exhibit 36. Implied Economic Multipliers, Boeing Commercial, 2012

Total Jobs / Direct Job

Total Jobs / $1 mils Direct Sales

$ Total Sales / $ Direct Sales

$ Total Income / $ Direct Income

Multiplier 2.86 4.27 1.43 1.70 Sources: Community Attributes Inc.; Washington State Office of Financial Management.

In 2012, Boeing Commercial’s direct purchases from other Washington State firms across all five production lines amounted to an estimated $3.9 billion, other aerospace spending added $1.1 billion to reach the $5.0 billion in indirect revenues shown in Exhibit 35.

Jobs Revenues

($ millions) Wages

($ millions) Direct 72,900 48,869 9,676 Indirect 31,700 4,968 1,561 Induced 104,200 16,032 5,179 Total 208,800 69,870 16,418

Page 56: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 46 Aerospace Impact Analysis

The largest contributions from Boeing Commercial are through its induced impacts, which are impacts associated with the spending of labor income tied directly and indirectly to Boeing Commercial. In 2012 there were 135,900 non-Boeing jobs supported by Boeing Commercial activities, of which 104,200 were via the effects of spending wages. This reflects Boeing’s relationship with the economy as a whole in Washington State. In addition to being a major employer by headcount, Boeing pays good wages; this income thus drives demand elsewhere in the state economy and supports jobs in other industries.

The largest impacts came from the 737 program, followed by the 777 program. In 2012, the 737 program supported—via direct, indirect, and induced effects—an estimated 65,100 jobs across the state, nearly $5.0 billion in labor income, and $27.6 billion in total sales. Approximately two thirds of all 737 sales were to foreign carriers in 2012, summing to an estimated $13.3 billion in foreign exports.

The 777 program generated an estimated $14.4 billion in direct sales in 2012 and supported an additional $5.8 billion in sales generated by other firms in Washington State. Among direct sales, roughly seven out of every eight 777 aircraft built in 2012 were destined for foreign customers, with estimated export sales of $12.3 billion. The 777 program supported an estimated 56,900 jobs in Washington State and $4.4 billion in labor income. Exhibit 37 illustrates the economic impacts of each production line in Washington State, including disaggregation by type of impact (with wages and benefits from direct and indirect effects).

Page 57: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership October 21, 2013 pg. 47 Aerospace Impact Study DISCUSSION DRAFT

Exhibit 37. Boeing Commercial Economic Impacts in Washington, 2012

Source: Community Attributes Inc.; SPEEA; IAM; The Boeing Company; Washington State Department of Revenue 2013

Page 58: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 48 Aerospace Impact Analysis

Fiscal Impacts Direct Fiscal Impacts of Aerospace in Washington State

The aerospace sector (NAICS 3364) directly paid $165.2 million in taxes to the State in 2012, while related industries paid an additional $55.6 million. After adjusting for inflation, between 2004 and 2012 the aerospace sector alone has directly paid more than $1.2 billion in taxes to the state, while related sectors have contributed $452.0 million in 2012 dollars (Exhibit 38).

Business & Occupation (B&O) taxes were the largest component of aerospace and related tax remittances. In 2012, aerospace firms paid $139.2 million in business B&O taxes, $25.7 million in other taxes (for example, use taxes), and $350,000 in sales taxes; aerospace and related collectively directly paid $162.8 million in B&O tax over this period (Exhibit 39). Over the 2004 to 2012 period, aerospace firms paid in aggregate more than $1 billion in B&O to the State (expressed in 2012 dollars), with another $191.1 million paid out by related industries.

Exhibit 38. Direct State Taxes Paid by Aerospace and Related Businesses

Sources: Washington State Department of Revenue; Community Attributes Inc.

$84$104

$165 $168

$124 $132 $127 $132$165

$41

$46

$50 $52

$58 $46 $50 $53

$56

$124

$150

$215 $220

$182 $178 $177 $186

$221

$0

$50

$100

$150

$200

$250

2004 2005 2006 2007 2008 2009 2010 2011 2012

Millions (2012 $)

Aerospace

Related

Page 59: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 49 Aerospace Impact Analysis

Exhibit 39. Direct Taxes Paid by Aerospace and Related Industries by Type, 2004-2012

Sources: Washington State Department of Revenue; Community Attributes Inc.

Total Fiscal Impacts of Aerospace in Washington State

The economic benefits of the aerospace industry discussed above extend to fiscal benefits to the State budget. Overall fiscal benefits reflect both direct tax remittances by aerospace firms and tax revenues based on additional economic activity generated by aerospace throughout the state economy.

To arrive at fiscal benefits, the direct and effective rates for Business & Occupation taxes (B&O), Use and Utility fees and other taxes, and Sales tax were first calculated. Tax rates are characterized as “effective” because they represent the ratio of state fiscal revenues per category of taxation as a share of gross business income (GBI), since modeled impacts are for gross sales and cannot be further segmented by B&O and other activities. For example, in 2012 primary metal manufacturers (NAICS 331) generated $2.8 billion in gross business income in Washington State and paid $8.2 million in B&O tax and $20.3 million in other state taxes, resulting in effective B&O and use and related rates of 0.29% and 0.71% (as a percentage of GBI).

For each sector in which the 2012 Washington State Input-Output Model generated output estimates, effective rates were calculated and then applied to net aerospace-supported output by sector. Estimated effective rates for the sectors

$91$108

$167 $166

$117$135 $127 $135

$163

$23

$30

$37 $40

$52$32 $38

$39

$45

$11

$11

$12 $14

$13 $11 $12$11

$13

$124

$150

$215 $220

$182 $178 $177 $186

$221

$0

$50

$100

$150

$200

$250

2004 2005 2006 2007 2008 2009 2010 2011 2012

Millions (2012 $)

SalesTaxes

B&O Taxes

Other Taxes

Page 60: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 50 Aerospace Impact Analysis

included in the 2007 Washington State Input-Output Model are presented in Appendix H.

In 2012, an estimated $544.1 million in State revenues supported by the aerospace industry via direct, indirect, and induced effects. The largest component of this total was from B&O ($276.0 million), with another $185.4 million in sales tax revenues remitted to the State (Exhibit 40). Over the 2004 to 2012 period, an estimated nearly $4.1 billion in State revenues were supported by aerospace activities (adjusted to 2012 dollars). B&O tax supported by aerospace via multiplier effects in 2012 represented 8.1% of State B&O taxes paid in Washington State; cumulatively over the 2004 to 2012 period, aerospace supported (via direct, indirect, and induced effects) 7.4% of all State B&O taxes (based on 2012 dollars).

Exhibit 40. Estimated Total Fiscal Benefits from Aerospace, 2004-2012

Sources: Community Attributes Inc.; Washington State Office of Financial Management; Washington State Department of Revenue.

Total Fiscal Impacts of Boeing Commercial in Washington State

In 2012, Boeing Commercial is estimated to have paid direct B&O tax revenues tied to aircraft sales of $133.5 million across all five production lines. The largest share of this total was from sales of the 737. While the 737 is the least expensive on an average price basis, due to the high volume of sales the program generated an estimated $56.5 million in revenues to State coffers. The 777 program was second in total direct B&O taxes paid, with remittances $39.2 million, followed by the 747 with $16.6 million. Estimates were based on an “effective” B&O tax

Other Taxes

Sales Taxes

B&O Taxes

Millions (2012 $)

Page 61: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 51 Aerospace Impact Analysis

rate of 0.2732%, which is less than the official reduced rate of 0.2904% for commercial aircraft sales.6

Factoring multiplier effects, Boeing Commercial activities supported $476.2 million in State tax revenues in 2012. Of this, the largest component came from direct and additional State B&O tax revenues—in 2012, Boeing Commercial-supported B&O tax revenues totaled $248.4 million. Sales tax remittances totaled $155.7 million, owing to Boeing’s induced effects on the state economy through the spending of additional wages earned directly and indirectly via Boeing activities. The two largest contributors to State revenues in 2012—directly and through multiplier effects—were the 737 and 777, contributing $169.3 million and $133.1 million, respectively (Exhibit 41).

6 Payments by line represent estimates, and are not based on an official audit of Boeing Commercial activities in Washington State. Because company-specific tax payments are subject to non-disclosure restrictions, these calculations are approximations based on publicly available information and data.

Page 62: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November, 2013 pg. 52 Aerospace Impact Study

Exhibit 41. Total Fiscal Benefits to Washington State from Boeing Commercial, 2012

Sources: Community Attributes Inc.; SPEEA; IAM; The Boeing Company; Washington State Department of Revenue.

Page 63: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 53 Aerospace Impact Analysis

Total fiscal impacts can be summarized using multiplier estimates (Exhibit 42). For example, for every billion dollars in sales of the 777, an estimated $9.27 million in State tax revenues is generated across the state. Overall, every billion dollars in sales in Washington by Boeing Commercial supports $9.74 million in State tax revenues.

Because the 737 and 777 have the highest output per worker and represent the most efficiently manufactured aircraft in Washington, their impacts via additional tax revenues per billion dollars of sales is lower. This is due in part to the large induced, wage-driven effect of Boeing Commercial activities on other sales-taxable activities across the state, which in this case favor more wage-intensive aircraft lines. However, because the 737 and 777 have such high levels of total sales, their overall effect in terms of tax revenue remittances is much higher.

Exhibit 42. Fiscal Multipliers per Boeing Aircraft Line, Washington State, 2012

Source: Community Attributes Inc.

Long-Term Economic and Fiscal Benefits from Aerospace in Washington State

Forecasted economic activity in aerospace depends heavily on Boeing Commercial airplane orders and a continued share of that production to occur within Washington. The need for this study demonstrates that aerospace employment and economic forecasts inherently assume that concerted efforts to retain Boeing activity in Washington will continue as they have occurred in years past, and that Washington will remain as competitive nationally as in years past.

An aerospace forecast was not developed as part of this study. However, recent forecasts of aerospace employment and industry demand are applied in this section to arrive at long-term fiscal benefits to Washington State. Boeing Commercial airplane orders and statewide employment forecasts would suggest the State will receive between $450 million and $500 million in fiscal revenues per year, through 2040, for a total of $12.5 billion to $14.3 billion cumulatively during this period. A higher share in commercial airline sales would conceivably increase total State fiscal revenues to closer to $20 billion during this period.

Total State Revenues ($ millions) / $ 1 Billion Direct Sales

737 $8.19 747 $9.87 767 $12.90 777 $9.27 787 15.61

Boeing Commercial

Average $9.74

Page 64: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 54 Aerospace Impact Analysis

The range in the forecast was derived from two separate approaches, presented in the following sections.

The Boeing Company’s Long-Term Market Outlook Approach

The Boeing Company’s (2013) latest long-term commercial aircraft market outlook projects sales of 35,280 commercial aircraft of varying size classes between 2013 and 2032. Controlled for inflation, these sales are projected to sum to nearly $5 trillion (2012 dollars). Sales are based on both fleet expansion, which in turn are driven by growing global demand for air travel, and fleet replacement schedules. The largest segment by sales volume and dollar value is the single aisle class, of which the Boeing 737 has been the dominant aircraft (Exhibit 43).

Based on these estimates, the average weighted price per aircraft, across all size classes, would be $137.2 million (2012 dollars), compared with an estimated 2012 average of $89.7 million. The global commercial aircraft market, according to this outlook, would average per year approximately $242.0 billion in revenues (2012 dollars).

Exhibit 43. The Boeing Company Commercial Aircraft Demand Forecast, 2013-2032

Size Class New Airplanes Value (Billions 2012 $)

Large Widebody 760 280 Medium Widebody 3,300 1,090 Small Widebody 4,530 1,100 Single Aisle 24,670 2,290 Regional Jets 2,020 80 Total 35,280 4,840

Source: The Boeing Company.

If approximately 21% of this demand is satisfied by Boeing Commercial activities in Washington State (based on a Boeing total share of 25%),7 these sales would translate into an average of approximately $54.1 billion in direct aerospace revenues per year over this period (2012 dollars). Assuming this average holds over the entire 2013 to 2040 period (extending the Boeing forecast), the total fiscal impacts associated with these revenues—factoring both direct and multiplier effects—would total $14.3 billion, or approximately $509.0 million per year (2012 dollars). This compares with an estimated aerospace industry total fiscal impact for 2012 of $544.1 million.

7 This estimate is based on Boeing Commercial share of 25% of all new commercial aircraft sales, of which 85% would be manufactured in Washington State (the other 15% in South Carolina as facilities and capacity there expand in the future). The total is then scaled up by 5% to capture other, non-Boeing aerospace revenues in Washington State, based on Boeing Commercial’s estimated share of aerospace gross business income in Washington State in 2012.

Page 65: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 4. Measures and Impacts

Washington Aerospace Partnership November 2013 Page 55 Aerospace Impact Analysis

If Boeing is able to capture more global demand, say up to 40% of forecast global demand, then total tax revenues accruing to Washington State over this period would sum to $19.5 billion, or $697.9 million per year (Exhibit 44).

Exhibit 44. Scenarios for Boeing Commercial Share of Forecast Global Demand and Fiscal Impacts

Boeing Share of Forecast Demand

Fiscal Impacts for Washington State (millions 2012 $)

Average per Year (millions 2012 $)

25% 14,250.8 509.0 30% 16,014.3 571.9 35% 17,779.8 634.9 40% 19,541.3 697.9

Sources: Community Attributes Inc.; The Boeing Company; Washington State Office of Financial Management.

OFM Employment Forecast Approach

An alternative approach makes use of the Washington State Office of Financial Management (OFM) long-term employment forecast. Revenues and wages are estimated deductively by their historic relationship with employment levels, since the OFM forecast is only for jobs. Based on this forecast and approach, between 2013 and 2040 aerospace employment per year would range between 96,009 (projected for 2013) down to 84,760 (2040) statewide. If one assigns the 10 year averages for annual wage (in 2012 dollars) and revenue per worker ratios, based on historic data, for all forecast years, Washington State aerospace revenues per year would vary between $41.9 billion and $47.4 billion.

These totals, after estimating multiplier effects using the input-output model, would result in total business revenues over this 28 year period economy-wide of $1.7 trillion, or $61.9 billion per year, with a total jobs impact of 207,700 per year and income of $14.4 billion. Fiscal impacts associated with these impacts would total $12.5 billion, or $446.4 million per year (Exhibit 45).

Exhibit 45. Estimated Long-term Fiscal Impacts from Aerospace in Washington State, Based on OFM Employment Forecast

Total, 2013-2040 (Millions 2012 $)

Average per year (Millions 2012 $)

B&O 6,512.7 232.6 Sales Tax 4,032.2 144.0 Other 1,955.5 69.8 Total 12,500.4 446.4

Sources: Community Attributes Inc.; Washington State Office of Financial Management.

Page 66: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 5. Additional Benefits

Washington Aerospace Partnership November 2013 Page 56 Aerospace Impact Analysis

SECTION 5. ADDITIONAL BENEFITS FROM BOEING COMMERCIAL Boeing Commercial is a major driver of broad-based, cross-industry innovation within Washington State. Innovation occurs both within the company, through university projects funded by Boeing, and by former Boeing employees who start their own businesses, either in aerospace or outside of it. Below is a description of Boeing spinoff companies, Boeing-specific technology transfers, research partnerships with Washington universities and in biofuels, as well as philanthropic activities.

Boeing Spinoff Companies In September 2000, Boeing launched its business-building initiative, called the Chairman’s Innovation Initiative. The program gives employees the opportunity to come up with new business ideas for internally developed technologies. Since its inception, the initiative has fielded and studied more than eight hundred employee-pitched ideas (Fastcompany.com, 2003).

In 2001, AVChem was founded as a result of the Chairman’s Innovation Initiative. The company delivers a wide range of chemical management for customers by tracking and managing acquisition, storage, usage, and distribution of chemicals. The company is now a leading chemical services manager for the aerospace industry. AVChem is headquartered in Missouri, but operates a location in Kent, where they employ eight people (Eagle Private Capital, 2003; Aerospace Futures Alliance of Washington, 2013).

NSE Composites, located in Seattle, was founded by three composites engineers who worked for Boeing previously on the 777, 747, and 767 programs. Their experience includes design, analysis, optimization, testing, and certification of composite structures. Their client list includes many aerospace companies including Boeing, Bombardier, and Fokker, wind energy clients, as well as BMW-Oracle Racing for the America’s Cup (NSE Composites, 2013). NSE has two employees.

Intec, based in Everett, was founded by a former Boeing employee. The company has a composites manufacturing division, a custom container division, and an advanced materials testing lab. These three main business units have been involved in most major recent aerospace structure and/or material development programs. Their clients include NASA and Boeing, for their 777 program (In-Tec, 2013).

Founded in 2006 by a former Boeing employee, InVision Technology is based in Issaquah and provides technology and tooling that enables fabrication of a single piece structural component in a single-step process. Its clients represent aerospace, automotive, and other industries (InVision Technology, 2013).

Sensors in Motion was created by a former Boeing executive who was involved in Boeing Ventures (the investment arm of Boeing), as well as MessageGate and Exostar (two former Boeing spin-off companies). The firm creates high

Page 67: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 5. Additional Benefits

Washington Aerospace Partnership November 2013 Page 57 Aerospace Impact Analysis

performance gyroscopes and accelerometers for navigation, stabilization, positioning, and control. Sensors in Motion employs three people and is headquartered in Seattle.

Eospace Inc. designs and manufactures integrated circuits and components for telecommunications and aerospace applications. Founded at the Boeing High Technology Center in 1997, the company is located in Redmond (Eospace, 2013).

Boeing-Specific Technology Transfer Flex Track is a programmable, numerically controlled tool that “creates and countersinks fastener holes in a single pass.” The tool can work on highly contoured airframes, and was later deployed to work on the 787 program to assemble the plane’s wing panels and join its fuselage sections. Originally used in Boeing’s Integrated Defense Systems, the technology is now used for Boeing’s commercial programs. Flex Track is also used by Washington suppliers to aerospace, including Electroimpact in Mukilteo, and Mobile Tool Management in Seattle. Electroimpact has pioneered an offset—a wide, a multi-function, and an extra-wide version of the tool—while Mobile Tool Management has pioneered a “mini Flex Track” version.

Other examples of military technologies from Boeing that have found their way into commercial aircraft include fly-by-wire (which replaces manual flight controls with electronic), and a computerized engine controller called FADEC (Full Authority Digital Engine Controls) (Spenser, 2003).

Boeing Partnerships with Washington Universities The University of Washington’s William E. Boeing Department of Aeronautics & Astronautics is the only university in the Pacific Northwest to offer an aerospace degree program. The department offers courses spanning aeronautics and space, as well as a certificate program in Aircraft Composites Structural Analysis & Design. Taught at Boeing facilities the composites program has graduated over 200 students from Boeing or its partners. Founded in 1929 as one of only seven Aeronautical Engineering departments in the country, it was renamed for William E. Boeing in 2005. In 2012 total undergraduate enrollment was 116 students; graduate enrollment was 162 students,

The Joint Center for Aerospace Technology Innovation (JCATI) was established in 2012 by the governor and legislature. JCATI was founded to support aerospace at the University of Washington and Washington State University, as well as other four-year institutions in Washington State by joint research in new technologies, by providing Washington’s public universities with research opportunities and hands-on support, and by identifying technology transfer opportunities for the state’s aerospace industry (JCATI, 2013).

Since 2000 Washington State University has received over 200 research grants from Boeing, for a total of approximately $5 million. These grants span a wide variety of programs, including STEM education, biofuels research (mentioned

Page 68: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 5. Additional Benefits

Washington Aerospace Partnership November 2013 Page 58 Aerospace Impact Analysis

below), and mentorship programs (Washington State University Office of Corporate & Foundation Relations , 2013). Additionally, the company donated a patent portfolio to the University for use in producing dried fruits which was originated at McDonnell Douglas for curing of composites for fighter aircraft (The Boeing Company, 2003).

Aviation Biofuels Washington is home to a burgeoning aerospace biofuel sector. Because of its historical position as a home to the aerospace industry, Washington has also been the location of much of the development of aviation biofuels. In the state, biofuels manufacturers can take advantage of reduced B&O tax rates. One example of these is Matrix Genetics, which was originally founded as a biotechnology company. Matrix produces renewable fuels derived from algae. In 2012, Matrix Genetics announced that Spokane-based Avista Development had invested in the company, which would enable the company to spin-off a new company dedicated to agricultural biotechnology (Matrix Genetics, 2012). Imperium Renewables is headquartered in Seattle and has a facility in Grays Harbor which has a 100 million gallon per year capacity, and is the nation’s largest accredited certified biodiesel plant (Imperium Renewables, 2013).

In 2011, the University of Washington and Washington State University each received a five-year, $40 million grant to help develop sustainable biofuels (Cohen, 2011). Washington State University has led the conversion of closed timber mills into bioenergy development centers specifically for use at Seattle -Tacoma International Airport. The ultimate goal is to build a supply chain for aviation biofuel with the goal of “increasing efficiency in everything from forestry operations to conversion processes.” The technology uses a variety of inputs for biofuel production, including forest and mill residues, construction waste, and new energy crops.

Very recently, the FAA announced the creation of a national research center in Richland. The Center of Excellence in Alternative Jet Fuels and Environment will be based at Washington State University and will receive $80 million in funding over the next decade. Additional partners in the project include the University of Washington, Boeing, and Alaska Airlines, who used a 20% mix of aviation biofuels for 75 flights in 2011 (Wilhelm, 2013).

Philanthropy Boeing remains a significant corporate philanthropy leader in Washington, as well as across other parts of the world with a Boeing presence. Though gifts to individual organizations have shifted, the company employs a corporate strategy of giving to regions according to proportion of employee footprint in the region. For the last decade, the company has directly donated between $18 and $20 million every year for the last decade. Contributions in 2010 totaled $20.5 million, including $4.8 million to health and human services, $4.2 million to education, and $2.3 million to arts and culture organizations. Major recipients of gifts include the United Way of King County, who received $3.3 million in 2010.

Page 69: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 5. Additional Benefits

Washington Aerospace Partnership November 2013 Page 59 Aerospace Impact Analysis

Notably, these totals do not include individual employee giving, which constitutes additional large contributions (Wilhelm, 2011).

Recognizing the need for STEM (science, technology, engineering, and mathematics) education for its workforce, Boeing recently made a $2 million grant to Washington STEM, an organization that invests in excellence, equity, and innovation in STEM education (Washington STEM, 2013). Boeing’s STEM focus is on the very young (Exhibit 46); in addition to their financial contributions, the company supports 285 engineers who volunteer their teaching time in 10 different Puget Sound-area school districts, focusing only on kindergarten and middle schools (Wilhelm, 2013).

Exhibit 46. Boeing Charitable Contributions in Washington State, 2012

Source: The Boeing Company.

Page 70: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 6. Aerospace Cluster Linkages

Washington Aerospace Partnership November 2013 Page 60 Aerospace Impact Analysis

SECTION 6. AEROSPACE CLUSTER LINKAGES Many companies serving Washington’s aerospace cluster supply other industries as well, such as health care, consumer electronics, sports and recreation, and other transportation applications. Esterline is a specialized manufacturing company that derives 20% of its revenues from markets other than aerospace, such as medical equipment, other transportation systems such as high-speed trains, and electronics and gaming. Additional products they make include secure communications systems, high-performance digital receivers, and specialized medical equipment.

Medical Silicon Forest serves the medical industry as an ISO13485 certified supplier of electronic sub-assemblies for the medical equipment industry. Crane Aerospace and Electronics serves the medical market by producing neural implants, cochlear implants, infant cardiac monitoring electronics, and motion control for wheelchairs, as well as other transportation systems with controls and seat recline mechanisms (Crane Aerospace and Electonics, 2013). Spacelabs Healthcare, based in Snoqualmie, first developed the wireless monitoring system used to track vital signs for NASA astronauts in the 1950s. Today, the company designs and manufacturers health care products such as patient monitoring systems, and anesthesia delivery and ventilation systems (Spacelabs Healthcare).

Maritime In addition to aerospace markets, Janicki Industries serves maritime markets through production of tools and parts, as well as other transportation markets like high-speed trains, buses, and race cars. Pacifica Engineering serves transportation, marine, and medical industries through equipment design, manufacturing, and testing.

Sports & Recreation Toray Composites America produces carbon fiber for products such as bicycles, fishing rods and reels, and ski equipment, in addition to other aerospace applications. Hexcel also produces carbon fiber; some of their uses end up in sailboats, cars, and bicycle components. Profile composites also produces carbon fiber for automotive use, kayaks, bicycle components, and car top carriers.

Wind & Solar Energy Janicki Industries provides design, production, and wind energy prototypes for the wind energy industry, including tooling and parts. NSE Composites provided structural design and analysis and modeling for Knight & Carver’s innovative wind turbine blade. Heatcon is located in Seattle and makes portable autoclaves for aerospace as well as heat blankets and repair kits for the wind energy sector. General Plastics Manufacturing Company is based in Tacoma, and provides components for aircraft flight decks, as well as structural backings for solar panels.

Page 71: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 7. Commercial Space and Military

Washington Aerospace Partnership November 2013 Page 61 Aerospace Impact Analysis

SECTION 7. COMMERCIAL SPACE AND MILITARY AEROSPACE IN WASHINGTON

Many companies in Washington’s aerospace cluster also serve military and defense sectors as suppliers (in the case of composites and other competencies) and as manufacturers (in the case of unmanned aerial vehicles and space applications). Washington’s military aerospace sector was initially developed as a result of the Boeing Company, and even today Boeing assembles its P-8A Poseidon (a modified 737-800) for the Navy in Renton, where 757 wings were once built. Below is a brief summary of Commercial Space and Defense-related activities in Washington’s aerospace cluster.

Commercial Space Commercial access to space was being developed before the end of NASA’s space shuttle program, and as the last shuttle was launched, the private space market was in its inception. Washington companies are utilizing the region’s decades of experience in aerospace, primarily developed by Boeing.

Blue Origin, located in Kent, is developing technologies to enable cheaper and more reliable access to space for researchers, or anybody who can afford it. The company is currently focused on rocket-powered vertical takeoff and landing vehicles for suborbital and orbital space. Blue Origin just signed an agreement with NASA to partner and extend technology development (including power and actuation systems, in-space propulsion, and multiplex avionics and flight mechanics) for Commercial Crew in an unfunded capacity. Blue Origin employs about 40 people (Blue Origin, 2013).

Andrews Space is located in Tukwila, employs 35 people, and is engaged in product development, space system design, systems engineering, and business analysis as a catalyst in the commercialization, exploration, and development of space. Andrews Space won a NASA contract in 2012 to compete against Boeing and Lockheed Martin to develop a reusable first-stage rocket (Wilhelm, 2012).

Bothell’s Tethers Unlimited is based in Bothell, employs 15 people, and is a pioneer in developing thin fiber connectors that can link satellites together, or help them descend from orbit without fuel. The company also makes high-performance small satellite component technologies, and clients include the U.S. Government, Boeing, Lockheed Martin, Raytheon, and Northrop Grumman (Tethers Unlimited, 2013).

Aerojet Rocketdyne is a leader in development and manufacture of aerospace propulsion, tactical weapon and armament systems. Aerojet has a location in Redmond, where they build small rocket engines used by satellites and outer space probes. The company employs 37 at that location (Aerojet Rocketdyne, 2013).

Page 72: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 7. Commercial Space and Military

Washington Aerospace Partnership November 2013 Page 62 Aerospace Impact Analysis

Defense and Unmanned Aerial Vehicles Insitu Inc. is a subsidiary of Boeing located in Bingen, Washington. Insitu builds unmanned aerial vehicles (UAV) for defense, public safety, commercial, and research and education purposes. In 2009, the company was awarded a five-year contract valued at $250 million to operate drones for U.S. intelligence, surveillance, and reconnaissance; they have also received a contract from the Canadian government to do similar work. The company employs 100 people in Washington (Dininny, 2011). Central Washington University was recently proposed for a UAV research and testing sight, which would result in the FAA naming the Pacific Northwest Unmanned Aerial Systems Flight Center as one of six U.S. testing facilities (Peterson, 2013). Many of the previously mentioned firms engaged in other arenas of aerospace also supply military and defense sectors. UTC Aerospace Systems, mentioned previously in “Air Framers and Aero Structures” is heavily involved in defense products, including unmanned aerial vehicles, military aircraft, and helicopters. BAE Systems Platform Solutions is located in Redmond, and develops, designs, produces and supports electronic systems and subsystems for military applications. Baker Manufacturing Inc. is located in Puyallup, employs 10, and manufacturers military aerospace components. In addition to serving the commercial aviation electronics market, Esterline also designs specialized lighting solutions for military flight decks.

In addition to the Navy, Boeing’s military footprint also includes the U.S. Air Force as a client. Boeing’s new aerial refueling KC-46A Tanker officially began production in June of 2013, with the loading of its first wing spar. One month later, the assembly of its first forward fuselage and cockpit followed. Boeing was awarded the $30 billion contract in 2011, with the goal of delivering 18 of the Tankers to the U.S. Air Force by 2017 (The Boeing Company, 2013).

Page 73: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 8. Findings and Conclusions

Washington Aerospace Partnership November 2013 Page 63 Aerospace Impact Analysis

SECTION 8. FINDINGS AND CONCLUSIONS

The aerospace industry, and Boeing Commercial in particular, drives economic growth in the State of Washington. To better understand the critical role of aerospace to the state, this study considered the following types of impacts:

Direct, indirect, and induced impacts and benefits of the aerospace industry to Washington State;

Impacts specific to each of Boeing Commercial’s final assemb ly lines in the Central Puget Sound region;

Fiscal impacts, including direct State tax payments by aerospace firms and additional tax remittances generated from economic activities across the state supported—via multiplier effects—by aerospace activities.

The breadth of the supply chain in Washington State; and

Additional benefits associated with aerospace and Boeing Commercial activities, including technology transfer and philanthropic activities.

The findings from this study demonstrate that the scale and reach of these impacts are large and extensive. Every direct job in aerospace is associated with an additional 1.7 jobs elsewhere in the state economy. Likewise, every $1 million in aerospace sales supports nearly five jobs across the state.

Boeing Commercial is not only a critical anchor of the aerospace industry in Washington State, but of the state economy overall. For every job at Boeing Commercial, an additional 1.9 jobs are supported across the state, and for every $1 of wages and benefits paid out, an additional $0.70 are accrued in wages by non-Boeing workers. An estimated 72,900 Boeing Commercial jobs and associated production activities supported a total of 208,800 jobs across the state in 2012—equal to approximately 9% of all non-farm private sector employment in Washington State in 2012. In other words, nearly 1 in every 11 jobs in Washington State is in some way tied to Boeing Commercial activities.

Aerospace activities not only drive economic development, but play a major role in Washington State’s budget. In 2012 alone, the industry supported more than half a billion dollars ($544.1 million) in tax State revenues through direct and multiplier effects. Tax remittances included both direct payments by aerospace firms, and taxes generated by additional economic activities across the state economy supported by aerospace. Boeing Commercial alone contributed the majority of this total, directly and via multiplier effects supporting an estimated $472.6 million in 2012.

From 2004 to 2012, Washington State invested an estimated $1.4 billion (in 2012 dollars) in tax incentives and other investments in support of the aerospace industry. Over this same period, the aerospace industry yielded, via multiplier effects, nearly $4.1 billion in tax remittances to the state—a ratio of nearly 3-to-1. Every $1 of State resources committed to aerospace over this period is associated with more than $2.90 in tax revenues.

Page 74: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Section 8. Findings and Conclusions

Washington Aerospace Partnership November 2013 Page 64 Aerospace Impact Analysis

Benefits from aerospace activities in Washington State exist through technology transfer, research, and philanthropy. The aerospace industry, and Boeing in particular, is a major source of innovation and technology transfer, both in terms of new technologies and spin-out companies. Aerospace research & development has made Washington State a leading center for aerospace innovation—a critical asset as traditional and new competitors from Europe, China, Brazil, and elsewhere across the globe continue to invest in commercial aerospace.

Page 75: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 65 Aerospace Impact Analysis

APPENDICES

Appendix A. Aerospace and Related Industry Codes

Appendix B. Largest Puget Sound Aerospace Firms, 2012

Appendix C. Company Profile by Supply Chain Component

Appendix D. Estimating Aerospace Incentives Benefits by County

Appendix E. Estimating Boeing Commercial Sales Revenues, 2012

Appendix F. Methods for Estimating Direct employment and Wages by Boeing Commercial Production Lines in Washington State

Appendix G. Washington State Input-Output Model—Technical Memo and Modifications for Analysis

Appendix H. Effective Tax Rates by Sector, 2012

Appendix I. Stakeholder and Advisee Interviews

Page 76: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 66 Aerospace Impact Analysis

APPENDIX A. AEROSPACE AND RELATED INDUSTRY CODES Prior to this analysis, the Governor’s Office of Aerospace and the Washington State Employment Security Department (ESD) collaboratively developed a list of North American Industry Classification System (NAICS) codes intended to cover the breadth and scale of the aerospace supply chain in Washington State. These codes include both direct aerospace activities and industries considered closely linked with the sector, for example, machine shops, machine tool manufacturing, air transport services, etc. Throughout this report, at the request of the Washington Aerospace Partnership, totals for employment, wages, establishments, and business revenues include both aerospace and related sectors, as detailed below:

NAICS Code Description

Aerospace Industries

336411 Aircraft Manufacturing 336412 Aircraft Engine and Engine Parts Manufacturing 336413 Other Aircraft Parts and Auxiliary Equipment Manuf. 336414 Guided Missile and Space Vehicle Manufacturing 336415 Guided Missile and Space Vehicle Propulsion Manuf. 336419 Other Guided Missile and Space Vehicle Parts Manuf. 927000 Space Research and Technology

Related Industries

325211 Plastics material and resin manufacturing 332710 Machine Shops 332813 Electroplating, anodizing, and coloring 332999 Miscellaneous fabricated metal product manufacturing 333512 Machine Tool Manufacturing 333514 Special Die and Tool Manufacturing 333517 Machine tool manufacturing 333611 Turbine and turbine generator set units 333612 Speed changer, drive, and gear manufacturing 333613 Mechanical power transmission equipment 333618 Other engine equipment manufacturing 334418 Printed Circuit Assembly (Electronic Assembly) Manufacturing 334417 Electronic Connector Manufacturing 334419 Other Electronic Component Manufacturing 334511 Search, Detection, Navigation, Guidance, and Nautical System

Manuf. 334513 Instruments and Related Products Manufacturing

Page 77: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 67 Aerospace Impact Analysis

334515 Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

334519 Other Measuring and Controlling Device Manufacturing 335311 Power, Distribution, and Specialty Transformer Manufacturing 335314 Relay and Industrial Control Manufacturing 335921 Fiber Optic Cable Manufacturing 335991 Carbon and Graphite Product Manufacturing 335999 All Other Miscellaneous Electrical Equipment and Component

Manufacturing 481111 Scheduled passenger air transportation 481112 Scheduled freight air transportation 481211 Nonscheduled air passenger chartering 481212 Nonscheduled air freight chartering 481219 Other nonscheduled air transportation 488111 Air traffic control 488119 Other airport operations 488190 Other support activities for air transport 611512 Flight Training

Sources: Washington State Governor’s Office of Aerospace; Washington State Employment Security Department.

Page 78: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 68 Aerospace Impact Analysis

APPENDIX B. LARGEST PUGET SOUND AEROSPACE FIRMS, 2012

Rank Company Employees in Puget Sound

1 The Boeing Company 81,978 2 Aviation Technical Services 1,042 3 Esterline * 4 Crane Aerospace & Electronics 900 5 Aim Group USA 740 6 Honeywell Aerospace * 7 Janicki Industries 501 8 Skills, Inc. 480 9 Aerojet 450

10 LMI Aerospace 408 11 PRV Aerospace 390 12 Electroimpact 385 13 TECT Aerospace 369 14 Goodrich Aerostructures 202 15 New Breed Logistics Inc. 195 16 Orion Aerospace 194 17 Fatigue Technology 179 18 Zodiac/ IDD Aerospace Corp. 160 19 Volant Aerospace LLC 135 20 Greenpoint Technologies 130 21 Saint-Gobain Performance Plastics--Aerospace 115 22 TTF Aerospace LLC 113 23 Northwest Aerospace Technologies Inc. 111 24 Tectura Corp. 100 25 CableCraft Motion Controls 90

*Data reported to Puget Sound Business Journal for ranking purposes but suppressed from public viewing. Source: Puget Sound Business Journal Book of Lists, 2012

Page 79: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 69 Aerospace Impact Analysis

APPENDIX C. COMPANY PROFILE BY SUPPLY CHAIN COMPONENT Company research and interviews greatly informed the content of this report. Appendix C presents profiles of many companies, grouped by primary role in the aerospace supply chain. The list is not intended to be comprehensive, but rather representative for greater understanding of aerospace activities.

Air Framers and Aero Structures Examples of Washington State companies engaged in supply, design, or assembly of air frames and air structures include:

Primus International Inc. Aerospace parts supplier Primus International Inc. is based in Bellevue, and has three divisions in Washington State, including Hard Metal Machining in Auburn (Auburn division), Actuation and Control systems in Woodinville (University Swaging division), and Aluminum and Hard Metal Machine parts in Bothell (Accra division). Primus is a division of PCC Aerostructures, and is responsible for the entry and emergency doors in the Boeing 737 and Airbus A330/40, as well as the 787 wing ribs and flap support assembly (Primus International, 2013).

Aviation Partners Inc. Blended winglets, developed by Aviation Partners Inc., a Seattle company, have helped transform an industry. Winglets improve fuel burn and help big jets to be more efficient by reducing drag. Today, winglets are on more than 3,000 private jets and Boeing commercial jetliners, mostly 737’s. The company’s split scimitar winglet is currently undergoing FAA certification testing to be included on Boeing’s 737 Next Generation models (Wilhelm, 2013).

LMI Aerospace Inc. LMI Aerospace Inc. fabricates, machines, finishes, and integrates components for large commercial, corporate, and military aircraft. The company is headquartered in Missouri but operates two facilities in Washington State. The Seattle facility employs 160 people and performs brake forming, mechanical assembly, and machining. The company’s Everett facility focuses on mechanical testing and fabrication of fixed and rotary wing aircraft parts (LMI Aerospace, Inc, 2013).

Triumph Group. Triumph Group is headquartered in Pennsylvania, and operates in 64 locations worldwide, including in Everett, Redmond, and Spokane. In Everett, Triumph focuses on machining of hard metals such as stainless steel and titanium. In Redmond, Triumph does systems engineering and integration. In Spokane, Triumph manufactures composite interior components (Triumph Group, 2013).

Mobile Tool Management. Mobile Tool Management is located in Mukilteo, and makes robotics for aircraft assembly lines. They provide adaptive multi-layer drilling and precision positioning systems (Flex Track), as well as spindle manufacturing. The company has worked on Boeing’s 777 program, and they employ 30 people (Lamm, 2012).

UTC Aerospace Systems. UTC Aerospace Systems is headquartered in Charlotte, NC, and is one of the world’s largest suppliers of advanced aerospace and defense products, including air management and actuation

Page 80: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 70 Aerospace Impact Analysis

systems, landing gear, propeller systems, wheels and brakes, as well as space systems. In Washington State, UTC produces nacelles, interiors, wheels and brakes, and landing gear. Most facilities are located in Everett, but one is located in Spokane as well.

Aerospace Engineering, Research and Design Examples of Washington State companies engaged in aerospace engineering, research, and design include:

Honeywell Aerospace. Honeywell Aerospace, headquarter in Phoenix, AZ with an office in Redmond, is an industry leader in project engineering. The company has partnered with Boeing to provide engineering services on aircraft such as the 787, which is outfitted with Honeywell integrated flight controls, a crew information and maintenance system, and a navigation package comprised of communications, flight management, inertial reference, and air data systems (Honeywell, 2012). Additionally, Honeywell is contracted to research and develop technologies for the next generation of high-speed, in-flight wireless connectivity on Boeing 787, 777, 737NG, and 747-8 (Honeywell, 2013).

D3 Technologies. Based in San Diego, D3 Technologies has a local office in Everett, and has supported and partnered with over 60 aerospace companies large and small since 1982. Its employees have supported almost every type of FAA Part 23 and Part 25 airplane in service today, and they have also supported systems on new aircraft, like the Boeing 787 and the Airbus 350 (D3, 2013). The company also designs tools to help aircraft manufacturers of both commercial and federal projects.

Fatigue Technology Inc. Fatigue Technology Inc. has been recognized by industry leaders like Boeing, Airbus, Lockheed Martin, and Northrop Grumman as a top supplier for both product quality and customer service. The company helped pioneer the hole cold expansion process, which significantly reduces manufacturing and maintenance flow-time and costs (Fatigue Technology, 2013).

Raisbeck Engineering Inc. Seattle engineering firm Raisbeck Engineering Inc. has partnered with Blackhawk Modifications to modify the Beechcraft King Air, increasing its cruise speed to 318 knots and improving its takeoff performance. The European Aviation Safety Agency just certified Raisbeck Engineering’s Swept Blade Turbofan Propellers for all 200-series Beechcraft King Air planes, the benefits of which include quieter operation and increased thrust. Recognizing the need for education and STEM, Raisbeck led creation of Raisbeck Aviation High School, a public high school focusing on providing a rigorous STEM education to students interested in aviation, which opened in a new facility located on the Seattle Museum of Flight’s campus in September 2013. The high school has annual enrollment of approximately 100 students, with total capacity of approximately 400 students (Raisbeck Foundation, 2013).

Barani Design. Barani Design of Seattle is a smaller, newer firm with a wide range of customer creations. The company has designed racecars, as well

Page 81: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 71 Aerospace Impact Analysis

designing the cockpit on Boeing’s 787 Dreamliner. For the 787, Barani started with work on the cockpit and later moved into designing system panels (Barani Design, 2013).

Tucson’s Universal Avionics System Corporation. Tucson’s Universal Avionics System Corporation engineers and manufactures sophisticated electronics for private jets that have better navigation and anti-collision features than are available on many commercial jets. Although the company is headquartered in Arizona, it has maintained a facility in the Redmond area for more than 20 years due to the high quality engineering talent available in the Northwest, which allows the company to keep up with increasing demand (Wilhelm, 2007). The company makes equipment for Cessna, Learjet, and Gulfstream.

Avionics and Navigational Systems Examples of Washington State companies engaged in avionics and navigational systems include:

Crane Aerospace & Electronics. Crane Aerospace & Electronics is a Lynnwood-based subsidiary of Crane Co. that employs 900 workers in the Puget Sound region, in an aircraft sensor and battery systems plant and an electronics production facility (Lamm, Crane Aerospace adds jobs amid signs of sector’s revival, 2010). Crane supplies critical systems and components to the aerospace and defense markets, including numerous parts for NASA’s Mars Rover Project (Wilhelm S. , 2012). Crane specializes in creating products and components for aircraft including proximity sensors, which tell aircraft operators the positions of landing gear and flaps, as well as experiencing strong growth in providing aftermarket upgrades to avionics systems on existing aircraft (Wilhelm S. , 2008).

Universal Avionics Systems Corp. Universal Avionics Systems Corp. is based in Tucson, AZ and maintains their Engineering Northwest Division in Redmond, WA. Universal Avionics specializes in flight management systems, synthetic vision systems, terrain awareness and warning systems, flat panel integrated displays, and communication management units for private, military and commercial aircraft. Universal Avionics has approximately 20,000 flight navigation systems installed on over 9,500 aircraft in over 150 different aircraft types in over 115 countries around the world (Universal Avionics, 2012).

Honeywell Aerospace. Honeywell Aerospace is the largest manufacturer of aircraft engines and avionics in the world. Headquartered in Phoenix, AZ, they operate a large manufacturing and design facility in Redmond, WA, where they produce avionics equipment for large jetliners, including flight data recorders and collision avoidance systems. The company employs 463 people in Redmond.

Esterline Technologies. Esterline Technologies is a Bellevue-based Tier I aerospace electronics supplier specializing in aerospace switches and controls, as well as more complex aircraft systems. The company is the fourth largest aerospace employer in Washington State. Esterline Technologies has 24

Page 82: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 72 Aerospace Impact Analysis

subsidiary companies across the nation and globe, specializing in a variety of capabilities related to avionics including interface systems, secure communications systems, high-performance digital receivers, specialized medical equipment, and other high-end industrial application for commercial and military application. Esterline Technologies focuses on three core competencies: Avionics & Controls, Sensors & Systems, and Advanced Materials, and they serve clients in Defense, and in Commercial Aerospace (Esterline, 2013).

Northwest Aerospace Technologies. Like many local engineering companies, Everett’s Northwest Aerospace Technologies (NAT) counts many domestic and international airlines, top aerospace companies, airplane leasing and finance organizations, aircraft modification centers, and avionics companies among its clients. NAT provides interior reconfiguration, avionics modifications, and cabin systems integration programs (Northwest Aerospace Technologies, Inc., 2013). The company employs 60 people, and is a subsidiary of France’s Zodiac Aerospace.

Naverus Inc. Naverus Inc., based in Kent, is a leading designer and producer of required navigation performance systems, or RNP. The technology uses a combination of avionics equipment, autopilot, and GPS systems to guide aircraft more directly into airports instead of zigzagging between land-based route points, helping reduce fuel usage. The efficiencies also can help airports safely move more aircraft through their airspace during peak traffic periods (Hughs, 2008). The company employs 38 people.

Thales. Thales is a French electronics and defense company and supplier of in-flight entertainment systems and electronics systems. The company operates an avionics repair facility and research and development center in Seattle. Thales is the Boeing supplier responsible for integrating the battery powered electrical systems on the Boeing 787 (Wilhelm S. , 2013). Thales recently announced plans to migrate a Seattle-based division to New Jersey (Radnovich, 2012).

Silicon Forest. Silicon Forest is an electronics company serving aerospace, defense, and unmanned systems. They provide full electronics contract and manufacturing services and are located in Vancouver, Washington (Silicon Forest Electronics, 2013). The company employs 115 people.

Panasonics Avionics Corporation. Panasonics Avionics Corporation, a subsidiary of Panasonic Corporation of North America, operates an office in Bothell for human resources, finance and credit, product planning and support, maintenance services, customer care, and global repair services. Panasonics Avionics is the world leader in the production of in-flight entertainment and communications systems and employs 400 people in Bothell (Panasonic Aviation, 2012).

Sagetech Industries. Sagetech Industries is located in White Salmon and manufactures and refurbishes electronics for aviation--specifically transponders that increase situational awareness regarding weather and other aircraft, as well as transponders for unmanned aircraft. Their clients include NASA, Thales Aerospace, and Northrop Grumman Aerospace Systems (Sagetech Industries, LLC, 2013). Sagetech has 45 employees.

Page 83: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 73 Aerospace Impact Analysis

IDD Aerospace. IDD Aerospace is a subsidiary of Zodiac Aerospace based in Redmond. The company develops and manufactures flight deck and control panel assemblies, as well as interior lighting solutions. Clients include civil and military aircraft customers, and the company recently won a U.S. Department of Energy Small Business Innovation Research grant to evaluate the potential for energy-efficient and cost effective Organic LED lighting panels for aircraft interiors (Business Wire, 2013). The company employs 160 people at this location.

Composites and Advanced Materials Examples of Washington State companies engaged in composites and advanced materials include:

Spokane’s Triumph Composite Systems. Spokane’s Triumph Composite Systems supplies composite interior components, ranging from commercial and cargo floor panels, to environmental control system (ECS) ducting. Triumph Composite Systems supplies The Boeing Company with about 65% of its ducting and produces 100% of OEM manufactured commercial aircraft floor panels. Triumph Composite Systems operated as a Boeing Commercial Airplanes facility from 1990 until 2003, when it was purchased by Triumph Group (Triumph Composite Systems, 2010). The company employs 463 at this location.

Toray Composites (America), Inc. Toray Composites (America), Inc. is located on the Port of Tacoma Frederickson Industrial area. The production facility runs a 24/7 schedule with a prepreg production facility in addition to a state-of-the-art Composite Materials Research Laboratory. Toray is a major supplier of carbon composites used in the Boeing 787 (Gates, 2009). The company employs 380.

Janicki Industries. Janicki Industries is headquartered in Sedro Wooley, and operates an additional production facility in Hamilton. Janicki Industry is known for high-precision tooling, but is increasingly making innovative developments in composite fabrication materials and techniques including carbon fiber, fiberglass and metals of all types, proprietary poly resins for infusion, proprietary VARTM techniques and specialized finishes. Janicki Industries recently purchased a 50-ft. autoclave machine, one of the largest in Washington State, advancing their capabilities to cure composite structures under heat and pressure (Composites World, 2012). Janicki Industries employs over 500 people, and has grown for a company largely focused on supplying parts for the maritime sector to composites parts for aerospace including military uses as well as commercial aviation uses for Boeing and Bombardier (Gates, 2010).

Composite Solutions Corporation. Composite Solutions Corporation is a diversified aerospace and industrial composite products fabricator and assembler based in Auburn, manufacturing high strength, lightweight composite structures and components for commercial and military aircraft, helicopter and business jets The company has produced high quality composite products such as the Sikorsky Black Hawk’s gearbox fairing, the

Page 84: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 74 Aerospace Impact Analysis

lavatory module for the C-17 Globemaster, and the tail boom assembly of MD Helicopters. They employ 64 people and hold contracts with clients including Bell Helicopter, Boeing, McDonnell Douglas, Raisbeck Engineering, Airbus, Beechcraft and Sikorsky (Composite Solutions, 2012).

AIM Aerospace Inc. AIM Aerospace Inc. has 950 employees in Washington State, and has operations in Renton, Auburn, Sumner, and Tacoma. The composites product line of AIM Aerospace manufactures a wide variety of structural and non-structural composite parts, specializing in composite fabrication and assembly. The company produces wing components, winglets, tip, wing to body, and body to body fairings, light housings, escape slide packboards, and non-structural composites for multiple Boeing and Airbus aircraft, including the Boeing 747, 777, 767 Tankers and components for the Apache Helicopter and V-22 Osprey.

Yokohama Aerospace America. Yokohama Aerospace America is the American arm of Japanese firm Yokohama Rubber Company Ltd. They manufacture skin, flap and fairing panels for 737, 767 and 777 applications as well a range of additional interior panels and exterior secondary-structural panels utilizing in-house Prepreg composite fibers. Yokohama is a key manufacturer of 737 lavatory modules (Yokohama Aerospace America, Inc., 2010).

Hexcel. Hexcel manufactures composite products in their Kent facility. Products include wing trailing assemblies for the Boeing 737, 747 and 777, cockpit flight deck sidewall & ceiling panels on the 737 and 777 and wing to fuselage fillet fairing assemblies on the C-17 Globemaster. They have aerospace and defense contracts with Airbus, Boeing, Bombardier, Mitsubishi Heavy Industries, Sikorsky, Kawasaki Heavy Industries and Lockheed Martin (Composite Structures, 2012). Hexcel employs 409 people, and is the eighth largest aerospace industry employer in the Puget Sound region.

NSE Composites. Seattle based NSE Composites is involved with the design, analysis, optimization, testing, and certification of composite structures. The company developed the composite fuselage optimization software that was used for the preliminary sizing of the Boeing 787 (Business Digest, 2004).

Nova Aerospace Structures. Nova Aerospace Structures of Lynnwood, now owned by Park Electrochemical Corp, produces high quality composite parts for a variety of customers, including large diameter fiberglass tubes for the Lockheed Martin space telescope, composite radius blocks for the F/A-18 E/F, and aftermarket Cessna 182 winglets.

Tooling Washington State companies engaged in tooling include:

Electroimpact, Inc. Mukilteo’s Electroimpact, Inc. has made itself a name as one of the leading suppliers of tooling for large aerospace companies. Currently it has two multiyear contracts with Airbus for the wing of the A350 and the outer wing box. It also has contracts and partnerships with Spirit

Page 85: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 75 Aerospace Impact Analysis

Aerospace, Boeing, Kawasaki, and the AVIC I Commercial Aircraft Co in Shanghai (Wilhelm, 2009). Electroimpact’s Flex Track drilling machines boosted productivity of Boeing’s 777 production line by 40% (Electoimpact, 2013). The company has 250 employees in Mukilteo.

Pacifica Engineering. Pacifica Engineering provides design engineering, tool design, program management, and engineering and technical services to a wide range of industries including defense, aerospace, transportation, marine, and medical. The company provides design and fabrication services including welding, machining, forming, laser and paint. The company employs 59 people, and was acquired by Spanish firm MTorres in 2012. In 2013 they announced the opening of a new assembly and integration facility to be located in Everett. (Pacifica Engineering, Inc. , 2013).

D3 Technologies Inc. D3 Technologies Inc., of Everett has proved tooling services for clients such as the U.S. Navy, Boeing, Spirit Aerosystems, and Janicki Industries. The company has been responsible for tooling on such projects as the Delta IV Rocket, Lockheed Martin’s F-22 and F-35, and Boeing’s 787, 747-8 freighter and F/A-18. Their services include design and development for tooling, federal, and commercial clients. The firm has 163 employees (D3 Technologies, 2013).

Machinists, Inc. Machinists, Inc. is a precision machine shop located in Seattle that specializes in single components to complete manufacturing systems. The company had been commissioned by Boeing to create specialized tooling and have produced tooling for composite parts on the Boeing 737 upgrade and the composite mandrel tooling used for the fabrication of 787 ceiling panels. Machinists, Inc. serves transportation and maritime sectors as well as aerospace, and they employ 134 people (Machinists, Inc. , 2013).

Delta Tooling Inc. Delta Tooling Inc. is located in Tacoma. The company specializes in fabrication of graphite, fiberglass, aluminum, steel and tooling board. Clients include defense and commercial aerospace, and they employ 10 people (Delta Tooling Inc. , 2013).

Interiors Washington State companies engaged in interiors include:

Teague. Teague has a reputation as a premier interior design company and engineered the interiors of much of the Boeing fleet (737, 747, 757, 767, 777, and 787) as well as the exteriors for several international airlines. Teague has also created a camera surveillance system for the 777-300ER. For the Paris Air Show, Teague has collaborated with Boeing to show the potential for the 777-200LR, the commercial airplane with the longest range yet (Teague, 2013).

TTF Aerospace. TTF Aerospace is based in Auburn and designs and manufactures aircraft interiors, which is a large market as airlines need to make their older fleet look younger. It has also developed a cockpit door technology which has been used as a high-security door to separate

Page 86: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 76 Aerospace Impact Analysis

passengers from the cockpit, and has made more than 400 doors for carriers using Dash 8 aircraft. The company works with United, Delta, Southwest, and Virgin Atlantic and has 10 employees (Wilhelm, 2011).

Commercial Aircraft Interiors. Based in Arlington, Commercial Aircraft Interiors provides design, engineering, component repair, overhaul, and modification services, as well as new manufacturing for regional airlines, the U.S. Government, and others. Their inventory includes products from crew seats and emergency exit lights, to aisle carts, toilets, and ovens, and can be found on the Boeing (including Douglas product) and Airbus fleets (Commercial Aircraft Interiors, 2013). The company has 55 employees.

Heath Techna. Heath Techna build equipment for airplane passenger cabin, flight deck, and cargo bay including interior architectural components and custom furniture. The company was acquired by Zodiac Airline Cabin Interiors in 2013. Their products can be found on Boeing, Airbus, and regional airline fleets. They offer a full range of aircraft interiors services including overhauling, a repair station, and a spares team (Heath Techna, 2013).

Greenpoint Technologies. Greenpoint Technologies, based in Kirkland, is a Boeing Business Jet completion center, which “provides turnkey interior completions for high-net-worth individuals and Heads-of-State.” The company has an in-house VIP interiors and cabinet fabrication shop, a general manufacturing and testing facility, a machine shop, and large aircraft hangar facilities. Additionally, Greenpoint has patented a secure lift as a means to transport individuals in wheelchairs from the ground to the main deck of a Boeing 787 (Greenpoint Technologies, 2013).

Volant. Volant, based in Burlington, provides Boeing, Airbus, and others with interior parts and support services. They have capabilities to project manage, engineer, design, fabricate, integrate, source, test, and certify parts. Their clients are major domestic and international airlines, as well as leasing companies and engineering houses (Volant, 2013). Volant employs 75 people.

Maintenance, Repair, and Overhaul (MRO) Washington State companies engaged in maintenance, repair, and overhaul include:

A&R Aviation Services Inc. A&R Aviation Services Inc. is headquartered in Tumwater. The company is an FAA 145 Repair Station with capacity to overhaul and repair flight surfaces, nacelles, airframe and windows, accessories, and interiors. They employ 4 people.

North Star Aerospace, Inc. North Star Aerospace, Inc. is located in Auburn and was founded in 1992 as a woman-owned and a minority company. The firm delivers an extensive inventory of ready to ship, traceable components, and repair services on flight deck windows, hydraulics, and airframe accessories. They have 14 employees.

Allflight. Allflight is an FAA 145 Repair Station specializing in the overhaul and repair of aircraft windows and windshield assemblies, flight control

Page 87: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 77 Aerospace Impact Analysis

surfaces, structural composite components, and more. Their clients include Boeing, Lockheed, Airbus, Fokker, and DeHavilland. The company has locations in Seattle and Miami, and they employ 34 people in Washington State.

Aviation Technical Services. Aviation Technical Services (ATS) is the second largest aerospace employer in Washington State, with more than 1,000 employees. The company was founded in 1970 and has two facilities located in Everett and Moses Lake which provide airframe services, component maintenance, and engineering support services. The company just announced a long-term service agreement with JetBlue Airways to supply maintenance and modification services over a three-year period.

Workforce and Human Capital Washington State organizations and institutions engaged in workforce and human capital include:

Center of Excellence for Aerospace and Advanced Manufacturing. Aerospace and Advanced Manufacturing is one of 10 State of Washington Center of Excellence industry areas. These programs serve as coordinators between industry, educational and training institutions and other workforce development efforts to ensure Washington State has a competitive workforce in target industries. Working with K – 12 as well as higher and continuing education institutions, the Center of Excellence for Aerospace and Advanced Manufacturing coordinates to provide resources, develop curricula, and disseminate information to drive employment in aerospace and manufacturing.

Washington Aerospace Training & Research Center. Located at Paine Field in Snohomish County, the Washington Aerospace Training & Research Center (WATRC) opened in 2010 and delivers industry-driven training and provides five certificates of completion, aerospace manufacturing core skills, aerospace manufacturing assembly mechanic, aerospace electrical assembly mechanic, aerospace quality assurance, and aerospace training. A program in computer numerical control is in development. WATRC curricula completion counts towards credits at Edmond Community College.

Aerospace Joint Apprenticeship Committee (AJAC). In 2008 the Aerospace Joint Apprenticeship Committee was funded by the Washington State Legislature as a statewide nonprofit to provide on-the-job training experience with college-level classroom instruction, allowing workers to earn a living wage while they work towards occupational objectives. Apprenticeships are offered for Machinists, Aircraft Mechanic Air Framers, Precision Metal Fabricators, and Tool and Die Makers. This program works collaboratively with industry, educational institutions, and workforce development organizations to ensure that apprentices are pursuing in-demand positions that align with employer needs.

Air Washington. Air Washington is a consortium of eleven Washington State community and technical colleges. These institutions received a $20 million U.S. Department of Labor grant to strengthen Washington State’s

Page 88: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 78 Aerospace Impact Analysis

aerospace industry through workforce training. By fall of 2014, Air Washington campuses will train more than 2,600 workers in advanced manufacturing and composites, electronics and avionics, aircraft assembly, and aircraft maintenance.

Edmonds Community College and Everett Community College. Edmonds Community College and Everett Community College have partnered with the University of Washington to develop programs for certificates and associate degrees in Material Science Technology and Aerospace Manufacturing to maintain and further improve the local workforce. Classes introduce students to materials science and focus on composite materials, engineering design and manufacturing of structures. The programs have been recognized and awarded grants by the National Science Foundation (Edmonds CC gets training grant, 2006). These programs work collaboratively with employers, workforce development organizations, and higher education institutions to prepare students careers in the in-demand advanced manufacturing sector (Office of the Press Secretary, 2012).

Page 89: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 79 Aerospace Impact Analysis

APPENDIX D. ESTIMATING AEROSPACE INCENTIVES BENEFITS BY COUNTY

The Washington State Department of Revenue (DOR) each year collects detailed information by facility for all firms that make use of aerospace tax incentives in Washington State. Data are made available online by facility with detailed tabulations for employment and by occupation.

Because DOR collects data on a statewide basis, no data is made available on the distribution of incentives by county. However, in this study for the purposes of estimating this distribution, total incentives by dollar value for the 2011 calendar year (latest data available) are divided by total employment among all facilities making use of the credits. Tax incentives by value are then allocated based on the number of employees in a tax incentive-using facility in each county, and then summed to arrive at county-level estimates.

Page 90: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 80 Aerospace Impact Analysis

APPENDIX E. ESTIMATING BOEING COMMERCIAL SALES REVENUES, 2012

To arrive at estimates of Boeing Commercial sales in 2012 from aircraft assembled in Washington State, the following data was required: 1) number of deliveries per aircraft family; and 2) average cost per aircraft. While Boeing Commercial publishes delivery data, it does not publish actual sales data per aircraft; prices reflect average negotiated sale prices per client, which are in turn driven by a set of (often undisclosed) considerations. These considerations may include the size of a given order, the credit worthiness of the customer, and/or customized offerings, among many other factors.

However, while Boeing does not publish the average cost per aircraft, it does publish gross commercial sales, the list price per model, and deliveries. To arrive at an average actual price per aircraft model, deliveries per line were first multiplied by the list price per model as published on Boeing Commercial’s website. This approach assumes that, while list prices change per year and do not capture negotiated discounts based on the factors discussed above, the relative differences between prices should largely be the same from year to the next ( for example, the approximate percentage difference in price between a 747 and 737 should hold each year).

The sum total of sales was controlled to Boeing Commercial reported revenues, company-wide, in 2012, which can be found in The Boeing Company’s publicly disclosed financial statements. For example, the latest Boeing Commercial list price for a 777F is $295.7 million. With 19 reported deliveries in 2012, preliminary gross sales based on this price sum to $5.6 billion, equal to 6.4% of all aircraft sales based on this initial calculation. Next, this percentage share (6.4%) was multiplied by Boeing Commercial sales in 2012 of $49 billion, resulting in an estimated sales total for the 777F of more than $3.1 billion. Divided by 19 deliveries results in an average sale price for a 777F delivered in 2012 of $165.5 million.

Final estimates were expressed in average prices per aircraft family, which are based on a weighted average of sales of all variations of each model (for example, the weighted average sale price of a 777 based on sales of the 777F, 777-200ER, 777-200LR, and 777-300ER).

While the differences with published list prices in 2013 seem large, estimated prices per model are largely consistent with industry-accepted average discounts, based on the estimated year of price negotiation. For instance, the 2012 average price of a 737 in this study was $49.8 million. With an estimated backlog of 5.5 years, this price would have been negotiated sometime in 2008 or 2007, when the list price for 737 was approximately $67.5 million (unweighted average, based on a list price range of between $50 and $85 million). The estimated price in this report thus reflects a discount of 26%, in line with an industry-accepted average discount.

Page 91: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 81 Aerospace Impact Analysis

APPENDIX F. METHODS FOR ESTIMATING DIRECT EMPLOYMENT AND WAGES BY BOEING COMMERCIAL PRODUCTION LINES IN WASHINGTON STATE

In order to estimate employment and wages by production line, Community Attributes Inc. first worked with industry sources to gather payroll employment data by assigned production line. Data were reported by occupation activity, and often times with an explicit association with a discreet aircraft program, for example, 787 Quality Control. All data was reported with breakouts according to the following categories used by The Boeing Company: 1) production & maintenance; 2) salaried non-exempt; 3) engineers; 4) salaried exempt; 5) management; 6) subsidiaries; and 7) contingent labor.

The category “production & maintenance” refers to production-line workers, represented by the International Association of Machinists (IAM). “Salaried non -exempt” refer to technical workers. These positions often require at least an undergraduate degree, but are unique engineers and scientists, with a focus more on electrical and computer-related tasks; as a non-exempt group, these workers are represented by the Society of Professional Engineers Employees in Aerospace (SPEEA). The category “engineers” includes both engineers and scientists, and constitutes the other bargaining unit within SPEEA. Other categories include “salaried exempt,” which refers to non-production positions that do not belong to a bargaining unit, management, workers who belong to a Boeing subsidiary but are brought in for program-specific task, and contingent (for example, contract) workers.

In some cases, some headcounts did not include an explicit association with an aircraft program. For instance, some engineering activities (with headcounts) were assigned to the 747, 767, and 777 programs. In these cases, employment was allocated proportionally based on deliveries. In other cases, such as the Interiors Responsibility Center, industry sources and interviews were used to determine the appropriate allocation of workers by program. Control totals were also used, with modifications, to scale up or down total headcounts to conform to estimated facility totals, using Department of Revenue data and industry sources. While the Renton and Everett facilities are largely engaged in separate aircraft production lines, in some cases modifications to facility headcounts were needed to account for some 737 activities done in the Everett facility (for example, the share of workers assigned to the Interior Responsibility Center in Everett supporting 737 orders).

The distribution of workers by occupation per production line allows for weighted differences in labor income expenditures per line, with resulting impacts on the multiplier effects of each line estimated later in this report. For instance, lines that include a higher share of its labor force in engineers will have a greater labor income/output ratio.

To estimate total wages per line, Community Attributes Inc. started with estimates provided by IAM and SPEEA for the average wage, before benefits, for

Page 92: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 82 Aerospace Impact Analysis

machinists, technical workers, and engineers & scientists. Estimates for the remaining occupations were calculated by using the above averages as control values and location-based gross wage control totals derived by multiplying facility-based headcounts by the average aerospace wage (before benefits) in Washington State. Wages were then scaled up 35% to account for benefits and additional labor-related costs.

Page 93: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 83 Aerospace Impact Analysis

APPENDIX G. WASHINGTON STATE INPUT-OUTPUT MODEL—TECHNICAL MEMO AND MODIFICATIONS FOR ANALYSIS

The primary tool for estimating the broader impacts of the aerospace industry and Boeing Commercial production lines in Washington State was the Washington State Input-Output (I-O) Model for year 2007, published in 2012. The model provides a data-rich rendering of the state economy across 52 sectors. The transactions table, which underpins the I-O model, provides estimates of intermediate purchases, sales, and final demand across all modeled sectors. The complex analysis of the model, published online by the Washington State Office of Financial Management, allows analysts to model the impacts of economic activities when output, labor, wages, and first round direct purchases/requirements are known.

In order to best utilize the I-O for Boeing Commercial production line analysis, Community Attributes Inc. reconstructed the I-O model from the transactions table, but with the following modifications: 1) a recalibrating of the labor input for the aerospace sector to account for varying degrees of labor income/output intensity per line; and 2) construction of a separate model for only direct and indirect effects to account for the extent to which impacts are linked with these effects versus those of household labor income expenditures (induced effects).

In order to apply the input-output model for multiple years of analysis, implicit price deflators were used to adjust previous year totals to 2012. Direct requirements for aerospace and Boeing Commercial were estimated by applying the calculated shares of purchases for aerospace by sector to each year of output, derived from the 2007 transactions table.

A fuller discussion of the calculations underpinning the construction of an input -output model can be found on pages 13-14 of Beyers and Lin (2012).

Page 94: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 84 Aerospace Impact Analysis

APPENDIX H. EFFECTIVE TAX RATES BY SECTOR, 2012

Industry Sector B&O Sales Tax

Other Taxes

Crop Production 0.0023 0.0047 0.0012 Animal Production 0.0025 0.0009 0.0013 Forestry and Logging 0.0029 0.0017 0.0008 Fishing, Hunting, and Trapping 0.0010 0.0003 0.0015 Mining 0.0035 0.0059 0.0027 Electric Utilities 0.0006 0.0002 0.0328 Gas Utilities 0.0008 0.0006 0.0266 Other Utilities 0.0065 0.0010 0.0210 Highway, Street, and Bridge Construction 0.0029 0.0117 0.0017 Other Construction 0.0027 0.0188 0.0005 Food, Beverage and Tobacco Manufacturing 0.0018 0.0024 0.0009 Textiles and Apparel Mills 0.0023 0.0033 0.0001 Wood Product Manufacturing 0.0024 0.0013 0.0007 Paper Manufacturing 0.0019 0.0003 0.0006 Printing and Related Activities 0.0029 0.0142 0.0002 Petroleum and Coal Products Manufacturing 0.0023 0.0001 0.0031 Chemical Manufacturing 0.0025 0.0011 0.0007 Nonmetallic Mineral Products Manufacturing 0.0030 0.0047 0.0005 Primary Metal Manufacturing 0.0029 0.0002 0.0005 Fabricated Metals Manufacturing 0.0028 0.0018 0.0003 Machinery Manufacturing 0.0023 0.0012 0.0003 Computer and Electronic Product Manufacturing 0.0022 0.0015 0.0005 Electrical Equipment Manufacturing 0.0018 0.0006 0.0003 Aircraft and Parts Manufacturing 0.0027 0.0000 0.0005 Ship and Boat Building 0.0026 0.0023 0.0003 Other Transportation Equipment Manufacturing 0.0023 0.0019 0.0001 Furniture Product Manufacturing 0.0028 0.0075 0.0001 Other Manufacturing 0.0025 0.0017 0.0003 Wholesale 0.0030 0.0057 0.0002 Non-Store Retail 0.0021 0.0134 0.0008 Other Retail 0.0020 0.0129 0.0010 Air Transportation 0.0010 0.0012 0.0261 Water Transportation 0.0006 0.0013 0.0035

Page 95: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 85 Aerospace Impact Analysis

Truck Transportation 0.0011 0.0006 0.0042 Other Transportation/Postal Offices 0.0023 0.0023 0.0140 Support Activities for Storage, Transportation and Warehousing 0.0037 0.0039 0.0018 Software Publishers & Data Processing & related services 0.0052 0.0062 0.0005 Telecommunications 0.0054 0.0189 0.0009 Other Information 0.0070 0.0050 0.0022 52-53 0.0089 0.0056 0.0003 Legal /Accounting and Bookkeeping /Management Services 0.0119 0.0023 0.0003 Architectural, Engineering, and Computing Services 0.0068 0.0033 0.0006 Educational Services 0.0057 0.0057 0.0050 Ambulatory Health Care Services 0.0137 0.0003 0.0003 Hospitals 0.0106 0.0005 0.0016 Nursing and Residential Care Facilities, Social Assistance 0.0093 0.0025 0.0024 Arts, Recreation, and Accommodation 0.0040 0.0246 0.0004 Food Services and Drinking Places 0.0020 0.0220 0.0002 Administrative/Employment Support Services 0.0076 0.0080 0.0004 Waste Management/Other, and Agriculture Services 0.0055 0.0136 0.0021

Sources: Community Attributes Inc.; Washington State Department of Revenue.

Page 96: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Appendices

Washington Aerospace Partnership November 2013 Page 86 Aerospace Impact Analysis

APPENDIX I. STAKEHOLDER AND ADVISEE INTERVIEWS Name Title Affiliation Bill Beyers Professor Emeritus University of Washington Dave Waggoner Director Snohomish County Airport—Paine Field John Monroe COO Economic Alliance Snohomish County Troy McClelland President & CEO Economic Alliance Snohomish County Larry Brown Legislative Director IAM 751 Lisa Lefeber Public Affairs Port of Everett Lorrie Brown Economist Washington State Office of Financial Management Mary Welsh Research Analyst Washington State Joint Legislative Audit and Review

Committee Robin Toth Vice President Greater Spokane Inc. Stan Sorscher Legislative Director SPEEA Stephen Smith Economist Washington State Department of Revenue Terrie Battuello Chief of Business

Development Port of Everett

Page 97: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Bibliography

Washington Aerospace Partnership November 2013 Page 87 Aerospace Impact Analysis

BIBLIOGRAPHY Aerojet Rocketdyne. (2013). Retrieved from http://www.rocket.com/capabilities

Aerospace Futures Alliance of Washington. (2013). Washington State Aerospace Suppliers. Retrieved from http://www.afa-wa.com/directory.pdf

Aviation Week. (2012). Aviation Week Workforce Study 2012. Aviation Week.

Avionics Systems. (2012). Retrieved from Aviation Glossary: http://aviationglossary.com/avionics-system/

Barani Design. (2013). Boeing 787 Flight Deck Design.

Barber, M. (2011, October 3). Retrieved from Boeing: http://www.boeing.com/Features/2011/10/bca_production_increase_10_03_11.html

Beyers, W., & Lin, T.-w. (2012). The 2007 Washington State Input-Output Model. Olympia, WA: Washington State Office of Financial Management. Retrieved from http://www.ofm.wa.gov/economy/io/2007/I-O_2007_report.pdf

Black, T. (2013, June 14). Bloomberg. Retrieved from http://www.bloomberg.com/news/2013-06-13/boeing-seen-reaping-6-billion-a-year-on-787-output-boost.html

Blue Origin. (2013). Retrieved from http://www.blueorigin.com/media/

Boeing. (2012). Boeing Current Market Outlook, 2012-2031.

Boeing Commercial Airplanes. (2013). Current Market Outlook, 2013-2032. Seattle, WA: Boeing.

Bowermaster, D. (2004). State's 7E7 proposal offered up UW engineering students. The Seattle Times.

Business Digest. (2004, November 3). Retrieved August 22, 2012, from The Seattle Times: http://community.seattletimes.nwsource.com/archive/?date=20041103&slug=bizbriefs03

Business Wire. (2013, July 1). Universal Display and IDD Aerospace/Zodiac Lighting Solutions Awarded U.S. Department of Energy SBIR Grant. Retrieved from http://online.wsj.com/article/PR-CO-20130701-908075.html

Cohen, A. (2011, September 28). UW, WSU get $40 million for biofuel work. Retrieved from Seattlepi.com: http://blog.seattlepi.com/aerospace/2011/09/28/uw-wsu-get-40-million-for-biofuel-work/

Commercial Aircraft Interiors. (2013). Retrieved from http://www.cai.aero/products.html

Composite Solutions. (2012). About Us. Retrieved August 22, 2013, from http://www.compositesolutions.com/index.html

Page 98: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Bibliography

Washington Aerospace Partnership November 2013 Page 88 Aerospace Impact Analysis

Composite Structures. (2012). Retrieved August 22, 2013, from Hexcel: http://www.hexcel.com/products/aerospace/acompositestructures

Composites World. (2012, April 23). Retrieved August 22, 2013, from Janicki Industries takes delivery of 50-ft autoclave: http://www.compositesworld.com/news/janicki-industries-takes-delivery-of-50-ft-autoclave

Conway, R. S., & Pedersen, D. (2006). The Washington Aerospace Industry. Seattle, WA: The Puget Sound Economic Forecaster.

Cook, R. (2002, March 26). Governor signs Boeing-friendly unemployment pay bill. The Seattle Times.

Crane Aerospace and Electonics. (2013). Retrieved from http://www.craneae.com/

Crowley, W. (2003, March 05). Boeing and Early Aviation in Seattle, 1909-1919. Retrieved from Historylink.org: http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=5369

D3 Technologies. (2013).

Delta Tooling Inc. . (2013).

Dininny, S. (2011, December 14). Boeing unit Insitu to stay in Bingen. Retrieved 2013, from The Seattle Times: http://seattletimes.com/html/businesstechnology/2017017772_insitu15.html

Dubie, D. (2003, August 29). Boeing spins off messaging management company. Retrieved from http://www.networkworld.com/news/2003/0829boeing.html

Eagle Private Capital. (2003, Feb 1). AVChem, Inc. Secures Venture Capital Funding. Retrieved from http://www.eagleprivatecapital.com/02-17-03-avchem-inc-secures-venture-capital-funding.html

Economic Development Council of Snohomish County. (2009). Aerospace Industry Competitiveness Study.

Edmonds CC gets training grant. (2006, September 27). The Seattle Times.

Electoimpact. (2013).

Eospace. (2013). Retrieved from http://www.eospace.com/default.htm

Esterline. (2012). Retrieved from Esterline: http://www.esterline.com/Profile/AboutEsterline.aspx

Esterline. (2013). Esterline Website.

Page 99: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Bibliography

Washington Aerospace Partnership November 2013 Page 89 Aerospace Impact Analysis

Fastcompany.com. (2003, August 21). Apparently Google doesn't corner the market on internal start-ups.

Gates, D. (2009, December 11). Dreamliner makes history with plastic, outsourcing, design — and delays. The Seattle Times.

Gates, D. (2010, October 2). Local firms' gear will build challenger to Boeing 737. The Seattle Times.

Gates, D. (2012, July 5). Boeing packs more production into Renton 737 plant. The Seattle Times. Retrieved from http://seattletimes.com/html/businesstechnology/2018604845_boeing05.html

Gates, D. (2012, July 5). Seattle Times. Retrieved from http://seattletimes.com/html/businesstechnology/2018604845_boeing05.html

Greenpoint Technologies. (2013). Retrieved from http://www.greenpnt.com/portfolio/

Heath Techna. (n.d.). Retrieved from http://www.heath.com/About-Us.aspx

Heath Techna. (n.d.). Retrieved from http://www.heath.com/About-Us.aspx

Heath Techna. (2013). Retrieved from http://www.heath.com/About-Us.aspx

Hughs, D. (2008, December 12). RNP Procedures Are Coming to an Airport Near You. Aviation Week and Space Technology.

Imperium Renewables. (2013). Facilities. Retrieved from http://www.imperiumrenewables.com/facilities.html

In-Tec. (2013). Retrieved from http://www.in-tec.com/lab/pres.htm

InVision Technology. (2013). Retrieved from http://invision-technology.com/

JCATI. (2013). Retrieved from http://www.engr.washington.edu/jcati/index.html

Lamm, G. (2010, May 2). Crane Aerospace adds jobs amid signs of sector’s revival. Puget Sound Business Journal, p. 1.

Lamm, G. (2012, August 17). Banks looking to lend, compete to make small-business loans. Retrieved 2013, from Puget Sound Business Journal: http://www.bizjournals.com/seattle/print-edition/2012/08/17/banks-looking-to-lend-compete-to-make.html?page=all

LMI Aerospace, Inc. (2013). Retrieved from http://www.lmiaerospace.com/locations_everett.html

Machinists, Inc. . (2013).

Page 100: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Bibliography

Washington Aerospace Partnership November 2013 Page 90 Aerospace Impact Analysis

Matrix Genetics. (2012, August 29). Biotech Firm Matrix Genetics Receives Investment from Avista Development. Retrieved from http://matrixgenetics.com/biotech-firm-matrix-genetics-receives-investment-from-avista-development/

Miller, B. (2013, June 20). Puget Sound Business Journal. Retrieved from http://www.bizjournals.com/seattle/morning_call/2013/06/spanish-aerospace-firm-to-open-everett.html

Moss Adams. (2013).

NASA. (2013). NASA Scientific and Technical Information (STI) Program .

Northwest Aerospace Technologies, Inc. (2013).

NSE Composites. (2013). Retrieved from http://nsecomposites.com/customers

Office of Govenor Chris Gregoire. (2011). Gov. Gregoire announces strategy to ensure 737 MAX is built in Washington State.

Office of the Press Secretary. (2012). FACT SHEET: A Blueprint to Train Two Million Workers for High-Demand Industries through a Community College to Career Fund. Washington, D.C.: The White House.

Pacifica Engineering, Inc. . (2013).

Panasonic Aviation. (2012). About Us. Retrieved from http://www.panasonic.aero/ContactUs.aspx?&cname=BizSearchResult&fullcrit=Seattle,%20WA&zip=&city=&state=&m=20000&tag=All

Peterson, A. (2013, August 9). States are competing to be the Silicon Valley of drones. Retrieved 2013, from The Washington Post: http://www.washingtonpost.com/blogs/the-switch/wp/2013/08/19/states-are-competing-to-be-the-silicon-valley-of-drones/

Primus International. (2013). Retrieved from http://www.primusint.com/

Procelerate Technologies. (2013). Retrieved from http://www.procelerate.com/

Puget Sound Business Journal. (2006, February 28). Puget Sound Business Journal. Retrieved from http://www.bizjournals.com/seattle/stories/2006/02/27/daily11.html

Puget Sound Business Journal. (2008, May 21). Naverus opens office in China. Puget Sound Business Journal.

Puget Sound Economic Forecaster. (2013, April 2013). Historic and 10-Year Forecast. Seattle, WA.

Radnovich, C. (2012, June 16). Thales Avionics laying off 42 in Seattle as it moves division to New Jersey. Seattle Times, p. 1.

Page 101: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Bibliography

Washington Aerospace Partnership November 2013 Page 91 Aerospace Impact Analysis

Ray, S. (2013, August 19). Bloomberg.com. Retrieved from http://www.bloomberg.com/news/2013-04-19/boeing-cuts-747-8-output-rate-as-demand-drops-for-biggest-jets.html

Reuters. (2012, Oct 22). Chicago Tribune. Retrieved from http://articles.chicagotribune.com/2012-10-22/business/chi-boeing-to-speed-777-production-on-eve-of-3q-results-20121022_1_jason-gursky-carter-copeland-profitable-planes

Sagetech Industries, LLC. (2013). Retrieved from http://sagetechindustries.com/

Silicon Forest Electronics. (2013).

Spacelabs Healthcare. (n.d.). Retrieved 2013, from http://www.spacelabshealthcare.com/en/company/overview/

Spenser, J. (2003). Boeing technologies developed for commercial jetliners are now being integrated into some military products. Retrieved 2013, from Boeing Frontiers: http://www.boeing.com/news/frontiers/archive/2005/december/ts_sf10.html

Sturtevant, D., & Nguyen, L. (2009). Challenges and Opportunities for teh Washington State Aerospace Workforce.

Teague. (2013). Portfolio. Retrieved from www.teague.com

Tethers Unlimited. (2013). Retrieved from http://www.tethers.com/Capabilities.pdf

The Boeing Company. (2003, May 8). Boeing Donates Microwave Technology to Washington State University. Retrieved from http://boeing.mediaroom.com/2003-05-08-Boeing-Donates-Microwave-Technology-to-Washington-State-University

The Boeing Company. (2013). 747 Family. Retrieved from http://www.boeing.com/boeing/commercial/747family/freighter/

The Boeing Company. (2013). Improving the Quality of Life in Washington. Retrieved from http://www.boeing.com/assets/pdf/aboutus/govt_ops/state_cards/card_WA.pdf

The Boeing Company. (2013). Orders and Deliveries. WA. Retrieved from http://active.boeing.com/commercial/orders/index.cfm?content=displaystandardreport.cfm&pageid=m25066&RequestTimeout=20000

The Boeing Company. (2013, July 29). Tanker Production Takes Off. Retrieved 2013, from http://www.boeing.com/boeing/Features/2013/07/bds_wingspar_07_29_13.page

Triumph Composite Systems. (2010). About Us. Retrieved August 22, 2013, from http://www.triumphgroup.com/companies/triumph-composite-systems/about-us

Triumph Group. (2013). Retrieved from http://www.triumphgroup.com/

Page 102: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Bibliography

Washington Aerospace Partnership November 2013 Page 92 Aerospace Impact Analysis

Universal Avionics. (2012). About Universal Avionics. Retrieved 2013, from Universal Avionics: http://www.uasc.com/company/about.aspx

Volant. (2013). Retrieved from http://www.volant.aero/experience/index.html

Washington Aerospace Partnership. (2011). Aerospace Competitiveness Study. Seattle, WA.

Washington Department of Revenue. (2010, October).

Washington State Department of Revenue. (2013).

Washington State Department of Revenue. (2013).

Washington State Employment Security Department. (2013). Quarterly Census of Employment and Wages. Olympia, WA.

Washington State Employment Security Department. (2013). Quaterly Census of Employment and Wages.

Washington State Office of Financial Management. (2012). 2007 Washington State Input -Output Model.

Washington State Office of Financial Management. (2013). Long-Term Forecast, 2012-2040.

Washington State University Office of Corporate & Foundation Relations . (2013).

Washington STEM. (2013). Retrieved 2013, from http://www.washingtonstem.org/About#.UkMgeIZQGkE

Wilhelm, S. (2007, September 2). Hot business-jet market lifts Universal Avionics. Puget Sound Business Journal.

Wilhelm, S. (2008, May 18). A strong jetliner market lifts Lynnwood manufacturer . Retrieved from Puget Sound Business Journal : http://www.bizjournals.com/seattle/stories/2008/05/19/story10.html?page=all

Wilhelm, S. (2009, January 25). Aerospace contracts are plentiful at Electroimpact. Puget Sound Business Journal.

Wilhelm, S. (2011, May 20). Boeing remains local force in charitable giving. Puget Sound Business Journal. Retrieved 2013, from Puget Sound Business Journal: http://www.bizjournals.com/seattle/print-edition/2011/05/20/boeing-remains-local-force-in.html?page=all

Wilhelm, S. (2011, October 14). TTF Aerospace LLC soars as airlines need makeovers. Puget Sound Business Journal.

Page 103: Community Attributes tells data rich stories about communities › beyers › CAI_aerospace_impact_study.pdfCommunity Attributes tells data rich stories about communities that are

Bibliography

Washington Aerospace Partnership November 2013 Page 93 Aerospace Impact Analysis

Wilhelm, S. (2012, September 7). Retrieved from Puget Sound Business Journal : http://www.bizjournals.com/seattle/news/2012/09/07/spains-mtorres-buys-boeing-supplier.html

Wilhelm, S. (2012, August 13). Redmond's Crane Electronics made Curiosity rover parts. Puget Sound Business Journal, pp. 1-2.

Wilhelm, S. (2012, August 13). Redmond's Crane Electronics made Curiosity rover parts. Puget Sound Business Journal, p. 2.

Wilhelm, S. (2012, January 6). Seattle, we have liftoff — Space industry rising. Retrieved 2013, from Puget Sound Business Journal: http://www.bizjournals.com/seattle/print-edition/2012/01/06/seattle-we-have-liftoff---space.html

Wilhelm, S. (2013, May 17). Corporate Citizenship: Companies step in to boost math and science education . Retrieved 2013, from Puget Sound Business Journal: http://www.bizjournals.com/seattle/print-edition/2013/05/17/companies-step-in-to-boost-math-and.html?page=all

Wilhelm, S. (2013, September 13). FAA chooses Washington for aviation biofuels development. Retrieved from Puget Sound Business Journal: http://www.bizjournals.com/seattle/news/2013/09/13/faa-chooses-washington-for-aviation.html

Wilhelm, S. (2013, August 12). Latest in fuel efficiency: Split Scimitar winglet for 737s now in testing. Puget Sound Business Journal.

Wilhelm, S. (2013, April 22). NTSB to grill Boeing engineers over 787 batteries . Retrieved 2013, from Puget Sound Business Journal.

Willhem, S. (2006, September 16). Kent firm offers technology to help pilots navigate safely. Puget Sound Business Journal.

WISER Trade. (2013).

Yokohama Aerospace America, Inc. (2010). About Us. Retrieved August 22, 2013, from http://www.yaainc.com/company.htm