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Friday, June 20, 2003 - Page updated at 12:00 AM

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22 states bid for 7E7; some think they're just Boeing's bait

Seattle Times chief political reporter

To make today's deadline to bid for a new Boeing jetliner factory, officials around the country had to get over their skepticism about the company's sincerity.

From the governor of Arkansas to the economic-development director of Palmdale, Calif., some worry Boeing has no intention of building outside Washington and is using them to get the sweetest Puget Sound-area deal possible.

"People have questions: Is this a negotiating position? Are they really serious?" said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

Officials in 22 states have said they would send proposals bidding for the plant to assemble Boeing's proposed next-generation 7E7.

In keeping with the overachiever role Washington has played with multibillion-dollar tax breaks and the most news conferences, the state's proposal will be hand-delivered today to Boeing's headquarters in Chicago, to its Renton plant and to its consultants in South Carolina who are overseeing the site selection.

Within Washington, skeptics have suggested Boeing has already made up its mind to put the plant elsewhere.

"Fort Worth really is the first choice of Boeing right now ... and they're saying that Boeing has already made the decision to go there," a TV reporter told Gov. Gary Locke last month.

But around the country, government officials, industry analysts and the media see almost the opposite playing out.

"One of the things that we don't know at this point is, is Boeing seriously shopping the national marketplace for a plant, or are they using this opportunity to really squeeze the state of Washington for deeper incentive than they are being offered," Arkansas Gov. Mike Huckabee was quoted as saying last month.

North Carolina Department of Commerce spokesman Tadd Boggs was quoted as saying earlier this month that state officials were "wondering if Boeing is serious about any state or just trying to get Washington to pay attention."

In Jacksonville, The Florida Times-Union wrote, "Some industry experts have speculated that Boeing executives don't really want to leave Washington state, but are simply trying to pressure government officials there with a list of deals other states are offering."

The Atlanta Journal-Constitution posed it as a question: "Is the Boeing Co.'s recent and very public national search for a site to build a multimillion-dollar jet plant an attempt by the aerospace giant to wring a sweeter deal from Washington state?"

The answer was yes, at least according to one prominent industry analyst.

Boeing officials have repeatedly said there are no favorites and certainly no foregone conclusions. They say it will be a bottom-line-driven competition: The 7E7 will be built where it can make the most money for Boeing.

Locke said top Boeing officials assured him the unusually public site-selection process is not a "sham beauty contest."

But doubts remained right up to today's deadline.

"What I hear from people, including some of our elected officials, is this: 'We're still not 100 percent convinced that Boeing is not doing this just to get Washington to cough up money,' " said Danny Roberts, economic-development director for the California desert town of Palmdale.

"To go through a lot of brain damage just to get Boeing a better deal in Washington is not something we want to do."

Palmdale did submit a proposal, though it felt rushed in meeting today's deadline.

Roberts said the city had 18 months to put together a pitch to Lockheed Martin for a Joint Strike Fighter assembly plant. By contrast, it had a month to prepare the Boeing proposal.

"It's a monumental task," Roberts said. "That led some people to believe that they really weren't serious."

The next step in the competition is for Boeing and its consultants to pare down the list of proposals submitted by today. If the Boeing board decides to move ahead with the 7E7, the company will select a site for the final assembly plant by early next year. Boeing says the plant will require 800 to 1,200 employees.

"Certainly there will be follow-up conversations with likely candidates, but we expect the proposals that come in to be as detailed as the state can make them," said Boeing spokeswoman Mary Hanson.

The $3 billion package of tax cuts for Boeing and its suppliers that Locke signed Wednesday seemed so generous from afar that officials in several states said they could not top it.

"That is a very aggressive posture on the part of the state of Washington," said Kyser of Los Angeles County.

California has put together a $250 million package that contains no new tax breaks or incentives just for Boeing.

Kyser said it's important for California cities to compete for the 7E7 plant even if they think they're a long shot.

"The idea is we go for it and show that California is serious because our reputation for business environment has been somewhat clouded by the good folks in Sacramento," Kyser said.

Hanson said yesterday there is more to winning the 7E7 plant than the bottom line.

"Boeing always looks to make good business decisions," she said. "But while a solution that puts the least financial burden on Boeing might get a great deal of interest, that is not the only criteria."

She said the company was taking a "big-picture" view in deciding what is the best site.

In Arkansas, Andy Mayberry, spokesman for the state Department of Economic Development, said the state was contacted by Boeing's consultants, McCallum Sweeney, who said the plane maker was interested in the state entering the competition.

"We have to move forward in good faith," Mayberry said.

He said that even if Arkansas does not win, its proposal will be a benefit because "it allows us an opportunity to tell the rest of the world a little bit about why Arkansas is a good place to do business."

Illinois, now home to Boeing corporate headquarters formerly in Seattle, is also responding to Boeing's request for information. But in a bit of restraint not seen in most other states, a spokeswoman says, "Our first and foremost priority has been the taxpayers."

Laura Hunter of the Illinois Department of Commerce and Economic Opportunity said officials in her state see Washington as the front-runner, in part because of the more than $3 billion in tax breaks Boeing would get if the 7E7 plant is built here.

"I think Washington really has it to lose," Hunter said.

Material from Times aerospace reporter Dominic Gates and The Associated Press is included in this report.

David Postman: 360-943-9882 or dpostman@seattletimes.com

Copyright © 2003 Seattle Times Company, All Rights Reserved.

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