Washington residents and Boeing employees living in Snohomish County can breath a sigh of relief. Announced February 24, 2011, the Boeing Company has won the United States Air Force’s tanker contract for 179 KC-46A tankers, which will replace the 400 KC-135 tankers currently in service, with 18 “combat-ready” tankers to be delivered by 2017.
Dating back nearly a decade, the Air Force tanker contract has been under tough debate with EADS North America’s Airbus A330-based KC-45 tanker and The Boeing Company’s 767 platformed KC-46A. Originally awarded to EADS, the tankers where to be building Mobile Alabama. I found it strange that when it came to national defense a contract was awarded to a foreign company even with anti-trust laws protecting foreign company’s right to compete for Defense contracts.
EADS’s solution to the cost saving offered by the Boeing company was to cut the offering price of their tankers – after Northop Grumman pulled out of the deal – because of the European subsides making profit a non factor. Good thing those anti-trust laws are in place when a aerospace company doesn’t need to compete fairly for contracts. Gesh!
Thankfully, after further review the winning bid was retracted and given to Boeing. Part of the reasoning behind Boeing winning the contract was the cost saving over time. Way to go Boeing! Personally, I am really proud to see the contact awarded to Boeing for the thousands of employees who currently work for Boeing and all the potential for new hires.
Snohomish County Unemployement Rate
According to a recent Seattle PI news article,The Air Force’s tanker contact is said to be worth 11,000 to an estimated 70 suppliers in Washington and totaling $693 million in annual economic benefits for the State. As of December 2010, Snohomish County’s unemployment rate was still a staggering 9.8% and the potential for, lets say 50% are employed in Everett, 5,500 jobs locally would mean a huge burst for the local economy. The number of employed is likely to be higher since the 767 line is manufactured in Everett.
I have many friends who are employed by The Boeing Company and they in-turn have family members employed as well. In some cases, a family’s employment spans generations. For Snohomish County, Boeing is a substantial economic force and major influence for the well being and prosperity of the people who live here. If I had my choice the corporate headquarters would have remained in Washington.
Here is a quote from Herald writer Jerry Cornfield in his article 6 keys to how Boeing won the tanker contract.
5. Need for jobs
A recession followed by a slow economic recovery is forcing President Barack Obama and Congress to cut spending and create jobs.
This decision should allow the president to breathe a bit easier as Boeing apparently offered a less costly tanker on which construction could begin sooner using American workers.
It was going to be a very thorny political issue if the contract went to Airbus and initially generated more jobs overseas than in the United States.
This week, Air Force officials will meet separately with Boeing and Airbus officials to explain exactly how the decision came about. You can bet Airbus will be scrubbing the details for any sign of such political concern entering the process.
It is not economic rocket scienctist that having more jobs locally is a great for the economy and it’s not the first time I’ve blogged about, see April 13, 2010′s post titled When will the real estate market stabilize. Also, to learn more about working for Boeing on the Air Force tank visit http://jobs-boeing.com/newgentanker.
How does Boeing’s Tanker Contract influence Snohomish County Real Estate?
More jobs means more demand for housing; whether that be owning or renting. Housing is an undeniable truth for anybody living in the County or relocating for Boeing. Lately, I have been talking with people relocating to Washington for employment with and/or transferring to Washington for Boeing and with the awarding of the tanker contract that is likely to increase. In February’s market snapshot the available listing inventory was down across the entire County and coupled with influx of new jobs this could potentially accelerate the demand for affordable housing.
Am I saying prices will start climbing due to Boeing tanker contact? No, but what I am saying is that real estate prices haven’t been this good since 2003 and buying now could impact a family’s or person’s long term wealth. In a recent post, Buy a Home if You Make $15 Hour with Zero Money Down, I break down how affordable owning is right now and if you have good credit the time to act is now.
Boeing Tanker Contract Timeline
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