Renton’s goose that lays the golden eggs

The Boeing Renton 737 final assembly factory can be seen in the distance in this image from Renton’s Coulon Park

Aesop’s fable gave us a warning 2,600 years ago:

“There was once a Countryman who possessed the most wonderful Goose you can imagine, for every day when he visited the nest, the Goose had laid a beautiful, glittering, golden egg.

The Countryman took the eggs to market and soon began to get rich. But it was not long before he grew impatient with the Goose because she gave him only a single golden egg a day. He was not getting rich fast enough.

Then one day, after he had finished counting his money, the idea came to him that he could get all the golden eggs at once by killing the Goose and cutting it open. But when the deed was done, not a single golden egg did he find, and his precious Goose was dead.

Those who have plenty want more and so lose all they have”

For decades Renton’s prosperity has been supercharged by the Boeing Company, which provides thousands of living-wage, union-represented, machinist and engineering jobs to Renton residents and their families. Boeing also employs pilots, scientists, supply-chain specialists, logistics professionals, managers, administrators, and many others. And they typically give their employees benefits that include health care, vacation, sick leave, parental leave, life insurance, and 401K packages.

This money comes to Renton from global sources– everywhere in the world where 737’s are sold.  The Boeing Renton factory can assemble three billion dollars worth of product per month.  This outside revenue coming into Renton fuels economic activity throughout our region, as Boeing keeps local suppliers in business, and the money they distribute in payroll flows from aerospace workers to homebuilders, retailers, restaurants, service providers, and local and state governments.  Boeing’s international revenue allows Puget Sound’s other successful large companies to flourish, like Starbucks, Costco and Amazon, as well as countless small Renton businesses like Common Ground Coffee and Cupcakes, Boon-Boona, and The Sub Shop.

Boeing’s Renton factory has frequently been cited internationally as the most productive airliner factory in the world.  It has stood the test of time, evolving and thriving as technology evolved, turning out products during wars, recessions, and other crises.  

Photo credit Seattle Times

But after the MAX crashes and the Alaska door plug blowout, Boeing’s worldwide prominence and reputation have taken a severe beating.  The story has now been extensively covered by everyone… New York Times, BBC, Seattle Times, 60-Minutes, Congress, even Boeing themselves.  Boeing’s 1999 merger with McDonnel Douglas sparked an identity crisis in their executive ranks in which a new focus on “shareholder value” overtook their historic culture of  innovation, achievement, and excellence.  Now Boeing and the FAA are working to fix things. Among their various efforts, Boeing keeps trying new CEOs, working to find one that can help them regain the safety-culture that propelled them to technical and economic prominence.  Most of their engineers and machinists never lost this culture, so it’s more a matter of elevating it back into the top ranks. It is something Boeing can do, and needs to do, with a current backlog of 6,200 airplanes, and as our nation’s only builder of air transport jets for the future.

Boeing’s reputation had sunk so low that even before a door plug blew off a 737, Seattle’s progressive newspaper “the Stranger” was already seriously suggesting that the Boeing factories should be sold to Amazon.com to serve as warehouses.  While I’ve heard this notion suggested before, I was surprised to read it in such a progressive newspaper. Only about ten percent of Amazon’s jobs are union, while the majority of Boeing Renton’s factory and engineering jobs are union. And while the average machinist will soon be earning six-figures and have full benefit packages under their newest 2024 contract, Amazon warehouse workers frequently make close to minimum wage, and are only eligible for benefit packages if working full-time in some jobs.  Replacing career union machinist and engineering jobs with Amazon warehouse work is hardly progressive.

But “the Stranger” is not alone in suggesting Boeing has a limited life span left in Renton.  Business journals like Leeham News predict Boeing may leave Renton in 2033, just eight years from now.  If this happens, the future of the Boeing property should be of serious concern to all residents of Renton.  Back in the 1990s, when a rumor broke that Boeing was considering consolidating in Everett, Renton’s Mayor Tanner spearheaded a plan to put overlay zoning on the Boeing property to turn it into a biotech research office center if Boeing moved out.  Southport office towers were part of this plan.  But pandemic-era work-from-home changed the landscape for office projects, and it’s doubtful this plan would work.

The most likely outcome would be the one predicted in “The Stranger,” a combined Amazon/Fed Ex facility that utilized the airport and the massive Boeing production hangars.  These companies would likely be high-bidders for the property.  And they would get political support from King County Port Commissioners and King County Council Members who need to free up space at Seatac and Boeing Field– moving air freight to Renton would help them immensely.

But Renton’s environment would suffer dramatically from this change.  Instead of having two brand-new empty 737 takeoffs per day, we could have day and night air cargo operations using older airplanes.  Much of downtown Renton would find itself in a noise zone, with windows rattled regularly by older jets and turboprop aircraft.  In short order, FAA would be leaning on Renton, again, to extend the runway right into the newly rebuilt Renton High School.  We would succeed in bringing the noisiest operations of Boeing Field and Seatac into the heart of Renton’s historic downtown.  There is nothing desirable about this scenario.

“The Stranger” alternatively suggests that the Boeing Renton property could be used for low-income housing, which is certainly a possibility.  I don’t think that non-profits or governmental organizations would outbid Amazon for the property, but perhaps they might.  While this could help the regional housing shortages, Renton Council and residents must be aware that even market-rate housing is a net drain on Renton’s resources, costing more to provide services to than the users of the housing pay in taxes. In contrast, Boeing is a net producer of tax revenue, giving more to the city than they use in services.  Replacing Boeing with housing would directly negatively impact the City of Renton’s budget by millions, and possibly tens of millions, of dollars per year.  Along with losing thousands of living-wage jobs, this would deliver a one-two punch to Renton’s finances, and the impact would have to be made up with higher taxes on everyone in Renton.

The scenario for this property that works out best for Renton is for Boeing to rediscover its quality and safety culture, and to continue to build jets in Renton.  And this includes the new small-medium airplane that eventually replaces the 737s and 757s that were always built in this factory.

Yes, Boeing has space in Everett where they could consolidate, and they’ve also shown a tendency to move work to South Carolina which has lower labor costs.  But Boeing has historically thrived in Renton, running the most efficient airplane factory on the planet. And as their current home, Renton ought to be working to retain them here.  If Boeing announced they were holding a contest to locate the production line for a 737 replacement, every city in America would be competing to win the factory.  And Renton is the incumbent… the one to beat.   Renton should be working NOW, doing everything reasonably possible, to remain the preferred site for Boeing’s small-medium (single-aisle) airplane manufacturing.

Unfortunately, that has not been happening lately.

Taxes:

In 2016, during a time of budget challenges in Renton, the City of Renton implemented a B&O tax for the first time.  With a three billion dollar monthly revenue stream from 737 sales, Boeing was understandably concerned that they would pay the lion’s share of the proposed tax.  Mayor Law reached an agreement with Boeing that Boeing would not fight the tax if Boeing’s share was capped at five million dollars per year, and the tax was imposed with Boeing’s acquiescence.  In 2022, the City of Renton approximately tripled Boeing’s B&O taxes, escalating their rate over three years from the pre-agreed capped five million per year to 12 million per year plus a small fraction of their annual revenues.  Renton already has one of the highest property taxes in the area, with schools getting the biggest share.

A four year step-up in Boeing’s Renton B&O taxes was implemented in 2022, and has now approximately tripled this tax (approximate because it is now based partly on confidential revenue data).

And Renton’s 2025 total property tax levy rate (including schools, county, city, hospital, library, and others) is $10.02 per thousand in assessed valuation.  This is about 10% higher than Everett’s and Seattle’s rates of about $9.00, and 30 % higher than Bellevue’s rate of $7.30.

Currently the State Legislature is developing a suite of new B&O,  payroll, and property taxes they may levy on Boeing and other large employers which would be additive to Renton’s new tax increases.

Airport Facilities:

Renton Airport and Boeing traditionally have worked together to keep as much property available for general aviation as possible, while supporting Boeing production as necessary to meet world-wide demand for airliners.  Over the years Boeing has vacated leased airplane parking aprons and facilities they’re not currently using, but by mutual understanding, Renton Airport puts these properties in limited-term leases in case Boeing needs them again for airplane production. But new airport management, and a new focus on having tenants pay to completely rebuild airport-owned buildings, will require new 40-year leases with non-Boeing tenants.  This will limit the options for Boeing in the future.  Furthermore, an increased focus on Business jets at Renton airport increases the likelihood that the total number of Boeing new airplane take-offs, combined with business jet take-offs and landings, will reach the threshold that requires a longer runway.

In the past decade Boeing has also seen significant rent increases for their airport leased space, and new “through-the-fence-fees” for use of the airport; these charges would be okay if they went into diligent airport maintenance, but lately airport maintenance has been lacking as pavement and markings wear out and leased buildings get ignored.

Other infrastructure:

Boeing has special high pressure water lines serviced by the Seattle Water System. If these lines are broken, factory production stops (at a cost of millions of dollars per hour).  Renton recently approved a controversial housing project that sits so close to these lines that it puts them in jeopardy in spite of Boeing’s warnings.

Sound Transit was unwilling to include either a Link Light rail station or Bus Rapid Transit station near Renton Boeing in previous phases, and Renton needs to keep pressing them for service in the future.  PSE has modernized much of the Eastside electrical infrastructure in Bellevue and Redmond, running transmission lines through Renton to do so, but Renton’s grid near Boeing and the Landing still has less reliable equipment.  Renton should be pushing them for continuous upgrades.

To close the barn door on this:

Renton’s goose that lays golden eggs may be going through a moulting season, but that’s no reason to kill it.  Renton’s Economic Development Department, Airport Management, and Renton Council should be actively  working to ensure Boeing’s next single-aisle airplane gets built here.