Boeing exec warns about state becoming known as a "strike zone"

EVERETT — At a major Washington State aerospace industry conference here this morning, a top local Boeing executive warned that the state is becoming known as a "strike zone" and that the ongoing Machinists strike could contribute to driving assembly of Boeing's next airplane out of Washington.

"It's ironic that I'm speaking at a conference entitled 'Cleared for Take-Off' when at the moment we are grounded," said Fred Kiga, Boeing vice president for government and community relations.

Kiga first recalled the famous 1991 speech to the Seattle Chamber of Commerce by then-Boeing chief executive Frank Shrontz that the Puget Sound region could become "an aerospace rust belt in the 21st century, complete with padlocked factories, unemployment lines and urban blight."

Kiga said the state since then had made progress in improving the business climate.

"I don't think anyone would call this region an aerospace rust belt today," he said. "But we cannot afford to become known as the strike zone either. The stakes are much too high."

In 2003, Kiga was chief of staff to then Gov. Gary Locke during the successful campaign to keep assembly of the 787 in Washington.

Asked in an interview on the sidelines after his speech how worried he was that the decision on the next Boeing airplane might go the other way, Kiga responded: "I am obviously concerned."

He said that both he and Boeing commercial airplanes chief executive Scott Carson grew up in the Northwest. "We'd hate to lose a treasure like the Boeing company," Kiga said.

His speech to a conference room full of aerospace company executives and local government officials followed a keynote address by Gov. Christine Gregoire, who provided new statistics on the importance of the industry to Washington.

Gregoire said the latest data from the state's Office of Financial Management show that aerospace provides 87,000 direct jobs at an average wage of $90,000, as well as 157,000 indirect jobs.

"The strike is hurting the economy of the state," Gregoire said in a brief interview after her speech. "I am hopeful both parties can get to the table."

She said she is "in fairly frequent contact with both sides" but that there are no direct talks happening at this time.

Gregoire left the conference before Kiga spoke.

After his address, Kiga said in an interview that his remarks shouldn't be seen as a threat but as a warning of potential consequences.

"It's just ominous signs on the horizon," he said. "There are several factors that enter into where to build a new airplane. Yes, work stoppages play into that."

Both the company and the Machinists union have said that the big stumbling block preventing a settlement of the month-long strike is the IAM insistence that Boeing reduce outsourcing and provide some guarantee of future local jobs.

Kiga said the company cannot give in on that point.

"We want to maintain our competitiveness on the outsourcing issues. The company has never backed from that stance," he said. "Our guys are constantly running the numbers. They want to maintain that flexibility to decide where we site (assembly plants) and where we outsource to our suppliers."

Union officials attending the conference certainly took Kiga's remarks as more than a warning.

"He threatened us five times in that speech," said Jesse Cote, a union organizer with the IAM.

And Stan Sorscher, research director with the white-collar engineering union SPEEA, said that Kiga's focus on the Machinists strike was misplaced.

Sorscher said that Boeing has let down its customers with serious delays on the 787 and other program delays due to production problems that arose from the outsourcing the company insists is so essential.

"Now suddenly, it's the strike that has caused the customers to be unhappy," said Sorscher with heavy irony. "Boeing put itself in this position."

Dominic Gates: 206-464-2963 or dgates@seattletimes.com