Texas-sized competition for 7E7

The eyes of Texas are upon you all the live long day
The eyes of Texas are upon you, you cannot get away
Do not think you can escape them at night or early in the morn
The eyes of Texas are upon you 'till Gabriel blows his horn

— John Sinclair, 1903

DALLAS — Boeing dealt Texas a painful blow when it rebuffed an aggressive courtship from this business-driven city and moved its headquarters to Chicago in 2001.

But Texans are a resilient bunch, and the penchant for perseverance John Sinclair captured in song a century ago survives today.

It should come as no surprise the eyes of Texas are upon Boeing once again now that the aerospace giant is back on the prowl, this time for a location to assemble its proposed 7E7 jet.

Indeed, when the deadline to submit proposals to Boeing's 7E7 site-selection consultants arrived June 20, 17 Texas communities had entered the fray — more than three times as many as any other state.

Washington state officials view Texas as the greatest threat to woo the 7E7 program away.

The state has a strong pro-business government shaped by President George W. Bush during his years as Texas governor and expanded by Republican Gov. Rick Perry, Bush's successor.

The Texas Legislature greatly enhanced Perry's ability to recruit businesses to the state in June when it approved the Texas Enterprise Fund, a pool of $295 million the governor can use at his discretion to attract and retain corporate employers.

Texas has right-to-work laws that make it harder for unions to organize, so unions are scarcer and weaker than in the Puget Sound area, where Boeing has a long history of contentious labor relations.

The Lone Star State also boasts several major ports on the Gulf of Mexico that could handle a 24-hour-a-day flow of large 7E7 parts from foreign suppliers.

Alluring economic powerhouses Fort Worth and San Antonio are among Texas' most aggressive bidders for the 7E7 and will stack up well against all competitors.

But a little-known town on the Mexican border could stun Texas, and the rest of the country, by winning this high-stakes game of corporate "elimidate."

Harlingen

When McCallum Sweeney, Boeing's 7E7 site-selection consultants, delivered the 37-page request for proposals to the Texas Economic Development office in late June, several sources said they also relayed an intriguing request:

Be sure to include information on Harlingen, a small community in the southernmost corner of Texas.

Other cities were welcome to apply, the consultants said, but Harlingen was the only location Boeing specifically wanted to know more about.

Patrick Shaughnessy, communications director for Texas Economic Development, declined to comment and would not even confirm the state has had contact with McCallum Sweeney.

Robert Crutchfield, president of the Harlingen Chamber of Commerce, also would not confirm Boeing's interest in the city.

But he said Harlingen entered the 7E7 sweepstakes only after Texas officials sought information on the region's ability to host a Boeing plant. "We provided a statement of qualification in response to our state department of economic development's request," Crutchfield said.

Plenty of Harlingen residents were surprised by Boeing's interest in the community.

"This is not the kind of project we would normally go after," confessed one Harlingen executive, who requested anonymity. "Who wants to compete with Dallas and (Fort Worth) and San Antonio and Houston for a project like this?"

Harlingen's physical and geographic assets, and their synchronicity with Boeing's site-selection criteria, explain the company's interest. Foremost is the Port of Harlingen, which handles barge traffic to and from the Port of Brownsville, 25 miles to the south.

Boeing has named three Japanese manufacturers to its 7E7 supplier team and they could build up to 35 percent of the jet, according to published reports. So wherever the 7E7 is built, Boeing needs to have the ability to receive large shipments from Asia.

The Port of Harlingen is immediately adjacent to Valley International Airport, which has more than 600 acres of undeveloped land. Boeing's site criteria calls for 200 to 300 acres for a plant and 200 to 300 acres for suppliers.

Rail lines connect the port and the airport, but "if there was enough traffic to justify it, you could build a dedicated highway," he said.

At 8,300 feet, Valley International Airport's longest runway does not meet Boeing's need for a 10,000-foot runway to test and deliver 7E7s, but Harlingen Mayor Connie de la Garza said obtaining the land and permits to lengthen it would not be a problem.

The airport recently expanded to keep pace with briskly growing cargo shipments prompted by the North American Free Trade Agreement. Indeed, thanks largely to NAFTA, the Rio Grande Valley that encompasses Harlingen is among the fastest growing places in the U.S.

The area has a high unemployment rate of 11.9 percent that could get worse; Fruit of the Loom, the city's fourth-largest employer with nearly 800 workers, said last month it will close its Harlingen plant by the end of the year due to competition from Asian imports.

Still, city leaders said the workforce is motivated and trainable.

Lockheed Martin builds more than 40 percent of the parts for its complex Atlas rockets in Harlingen. "They tell us the productivity is higher here than any other facility in the astronautics division," Crutchfield said.

Harlingen is excited about the 7E7 possibilities, but Crutchfield said the community is trying to keep its expectations realistic.

"Our goal is to create an economically diverse community that is healthy over the long haul," he said.

Mayor de la Garza was more forthright.

"We feel we have a very, very competitive bid to meet all of (Boeing's) minimum requirements," he said.

San Antonio

Framed advertisements hang like hunting trophies on the walls of Mario Hernandez's office at San Antonio's Economic Development Foundation.

"Look where Toyota Parked," reads one, celebrating Toyota's recent decision to build Tundra pickups in the city.

"Boeing my way?" reads another, commemorating Boeing's mid-1990s arrival to service KC-135 refueling tankers at a decommissioned Air Force base.

San Antonio has one of the most well organized and aggressive economic-development organizations in Texas, and Hernandez is the city's top salesman. During his 13 years as president of the EDF, a nonprofit marketing organization spun out of the chamber of commerce, he has helped the city land dozens of projects and he is now leading the hunt of the 7E7 factory.

Boeing's invitation to bids from all comers has made the 7E7 search more "wide open" than most Hernandez has worked on, but he is eager for Boeing and McCallum Sweeney to begin site visits and negotiations with a narrowed list of cities.

"That's when the games really start," Hernandez said, with an excited grin.

He believes the large runway, abundant land and current Boeing facility at KellyUSA, formerly Kelly Air Force Base, gives San Antonio a good chance of landing the facility. Rail links to the ports of Corpus Christi and Houston will negate San Antonio's lack of a deepwater port, he said.

San Antonio Mayor Ed Garza shares Hernandez's optimism.

The city's low labor rates, low cost of living and well-coordinated business and political leadership helped sway Toyota to San Antonio in February, Garza said, even though other cities offered more lucrative incentives.

The momentum and lessons learned from the Toyota victory are aiding the city's courtship of Boeing, Garza said.

They are also enabling the city to make a spirited but realistic run at Boeing.

"Some cities and some states are going to throw everything but the kitchen sink at them," Garza said. "We are going to be more cautious."

"Our focus today is Boeing," Garza added. "But if we're not on (their) short list, we're still going after economic catalysts of similar size."

Fort Worth

If familiarity counts for anything, Fort Worth should be a favorite in the 7E7 competition.

When Chairman Phil Condit led Boeing's search for a new headquarters two years ago, company executives compiled huge amounts of data on the area.

Fort Worth Alliance Airport and thousands of acres of nearby residential and business property, all developed by H. Ross Perot Jr., received particularly close scrutiny.

Though Boeing ultimately settled on Chicago for its corporate offices, the Alliance complex could be harder to resist for a state-of-the-art manufacturing plant.

Huge swaths of the 9,600-acre airport facility remain unoccupied, including plenty of room next to the runways.

Burlington Northern Santa Fe and Pacific Union railroads have massive transfer facilities at Alliance, where they take cargo from the ports of Houston, Los Angeles and Long Beach, Calif., and redirect it throughout the Midwest.

FedEx uses Alliance as a regional hub, and American Airlines maintains 767 and 777 widebody jets there.

The Perot family built the Alliance complex in the late 1980s, when the Federal Aviation Administration was looking for new airports to relieve some of the strain on nearby Dallas-Ft. Worth airport.

Perot Jr., who oversees the project, approached Lockheed, Boeing and other aerospace manufacturers at the time and asked, " 'If you were going to build another major manufacturing facility, what would you need?' " said David Pelletier, spokesman for Hillwood Associates, which markets the property.

The greater Fort Worth area also has a deep and uniquely talented pool of labor.

Lockheed Martin, which bested Boeing in the competition to build the Joint Strike Fighter, is developing the plane in Fort Worth. Like the 7E7, the JSF will sport an all-composite airframe.

Vought Aircraft Industries, a longtime Boeing supplier and the only U.S. partner so far on the 7E7, is in nearby Grand Prairie.

Despite all this, Pelletier and Farley recognize Fort Worth has an obvious flaw: It is roughly 270 miles from the nearest deepwater port in Houston.

"What is the ultimate balance of what gets flown in, and what gets shipped (by sea)?" said Farley. "That's sort of a moving target."

David Bowermaster: 206-464-2724 or dbowermaster@seattletimes.com