October 2008 | Commentary | Checking In

Boeing, Boeing Gone?

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When times get tough, supply chain/logistics redeployment grows increasingly important. Part of evaluating site locations for your manufacturing and logistics facilities involves considering fundamentals such as proximity to sources and customers, and transport infrastructure.

But there is a "softer side" of site selection. As I write this, Boeing is in the midst of a strike with the International Association of Machinists that is idling production lines, postponing 787 Dreamliner back orders even further, and costing a reported $90 million in lost profits each month.

Even if the strike is settled by the time you read this, it will have long-term implications for both sides, and for the Seattle region including Everett and Renton, for Washington state, and for the U.S. economy as well, according to reports in the Seattle Post Intelligencer.

The softer side of site selection includes the temperament of the local population, press, elected officials, and community leaders toward manufacturing, transportation, and business in general.

Despite 27,000-plus workers being idled, there is little leadership or meaningful comment by elected officials, nor little outcry from the area's mainstream press to encourage a quick resolution given the wider importance of what is at stake, according to our contacts there.

Boeing is not feeling the love from Seattle, so much so that after the last labor dustup it moved its corporate headquarters from Seattle to Chicago.

There is talk in the business community about relocating some Boeing manufacturing facilities as well, in what is described as part of a supply chain redeployment that is more responsive to the airplane business today.

Is a move like that possible? Look at the automotive example. Plot on a map where the car manufacturers were located 40 years ago, and you'd find perhaps 65 percent in the U.S. Midwest.

Today? They're all around the world; and U.S. automotive growth has been in the southern states. Even for huge manufacturing enterprises, momentous shifts in sites are possible in a short time.

Are we looking at a possible aerospace rust belt in Seattle, especially as airlines cancel plane orders and the next administration starts looking for ways to pay for all the new items in the ever-expanding government shopping cart? They will likely cut defense spending, which is the other part of Boeing's business.

This edition of Inbound Logistics features articles on communities across the United States, including around Memphis, that get it. These communities, and their local leaders, understand the many choices you have when considering new locations.

Beyond offering great transport infrastructure and other hard benefits, they understand the softer side of site selection. You are bringing jobs and they know it. They would love you to locate there and they will show it.

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