The Boeing Company (NYSE:BA) is expected to decide the location of its new $10 billion 777X jetliner factory by early next year, and wants to build it in a state that would provide land for free, or at the very least, at a big discount. The company also wants to put the plant near a large airport and a deep sea port with good access to rail and road networks, according to a newspaper report.
Boeing’s 777X jetliner project -- estimated to support 55,000 jobs once completed according to a Washington State survey -- has generated fierce competition among several U.S states, which are looking to attract fresh investments and create jobs to boost their economies and stave off the fate of bankrupt cities like Detroit.
The details come from an 11-page request for proposals stamped “Boeing proprietary,” which lists the company’s criteria for the project site and its investment and job creation plans, and sent by Boeing to invite bids from a dozen states. A copy of the document was obtained by the St. Louis Post-Dispatch, the newspaper reported on Thursday.
According to the document, Chicago-based Boeing is considering up to 15 locations, including in Missouri, South Carolina, Texas and Utah, to construct an ambitious 4.2 million-square-foot plant to build its new 777X airplane. The company expects to receive bids from interested states by Tuesday and it plans to decide on the location by early 2014 and start construction of the facility in November next year.
Boeing was earlier forced to change its plans to locate the plant in Washington, after a major labor union rejected the company's offer. However, other states are wooing the jet assembly plant and the thousands of jobs attached to it, with tax credits.
Missouri’s Senate on Thursday passed a bill that would offer up to $1.7 billion of incentives over two decades. Meanwhile Kansas, California and Alabama are also vying for the jet plant, and are reportedly working on their own Boeing packages. According to local media reports, California’s offer could add up to $7.5 billion.
So, what will Boeing do? The company is considering two options.
The first one is to build a single 4.2 million-square-foot plant costing between $7 billion to $10 billion to build the entire airplane, which is an updated version of the 777 -- Boeing's mainstay long-haul product. The second option is to construct two units at separate sites, where the first unit would cost between $2 billion to $4 billion and be used to build the 777X’s 114-foot-long carbon wing and another unit, costing between $4 billion and $6 billion, to produce the fuselage and handle the final assembly, the Post-Dispatch reported.
“The ideal site would be located immediately adjacent to a major international airport,” the document said, adding that the company wants “easy access to a major highway” and a direct rail link to the site while a seaport with the ability to handle container ships would be desirable, according to the Post-Dispatch report.
The company’s wish list also includes facilities at no cost, or at significantly reduced prices, infrastructure improvements provided by the location, full support for worker training and the “entire applicable tax structure including corporate income tax, franchise tax, property tax, sales/use tax, business license/gross receipts tax and excise taxes to be significantly reduced,” the Post-Dispatch reported.