BusinessTN

The Boeing Company’s commercial airplane unit is in a slump, a trough company officials say it is unlikely to climb out of until the year 2006. Tough times on the national level have meant more of the same for local facilities such as Boeing’s Oak Ridge plant. (The plant employs about 420 people today, versus 760 before the Sept. 11 terrorist attacks.) Facing static, if not out-and-out dreary, future prospects, officials are pursuing two principal avenues for keeping and potentially growing jobs.

Like many other Boeing operations across the country, the Oak Ridge facility has turned to state and local economic development officials for help. Dusty Irwin, who works in business operations and development at Boeing Oak Ridge, insists they’re not asking for a handout. He says the company approached state officials “to understand what sort of programs the state might have to assist us in bringing new work into the East Tennessee area.”

The state department of economic development is not blind to Boeing’s problems and is looking for ways to help the Oak Ridge manufacturer of overhead and cockpit instrument pan Mary Fortuneels for commercial airplanes.

“Commissioner [Matt] Kisber is aware of what’s going on with the company,” says Dawn Rutledge Jones with the Department of Economic and Com- munity Development. “He is talking with some company executives there to determine what, if anything, the state can do to continue working with them to ensure those jobs that are there will remain there.”

The state is wise to be cautious, since state-sponsored assistance to corporations—particularly in the form of tax breaks—can have hidden pitfalls.

In Kansas, where Boeing is a major player, the state legislature passed an economic revitalization law last year to help the Wichita plant compete for a contract. Some community groups criticized that law for its lack of accountability safeguards. Jeff Kneip with Grow Kansas, a program that focuses on keeping jobs in that state, urged Kansas lawmakers in February to close loopholes in the law.

“If you’re going to take away tax dollars from a community, you need to have some sort of provision that keeps the company from downsizing and moving business elsewhere,” Kneip says.

He says Tennessee would be wise to tie job guarantees to any tax incentives offered to Boeing.

Meanwhile, Irwin brushes aside rumors that the airplane industry’s downturn has put the plant’s future at stake.

“The discussions we’re having with the state are not about any dire circumstances,” Irwin says. “They are about jobs growth for potential new work.”

While remaining tight-lipped on other opportunities, he divulges that the company is pursuing a contract with the United States Enrichment Corp. (USEC). If they are successful, it means the key to the facility’s immediate future could lie in its not-so-distant past.

From 1980 to 1985, the Boeing Oak Ridge facility was under contract with the U.S. Dept. of Energy to make centrifuge machines used for enriching uranium. A reliance on foreign enriched uranium in recent years has become a national security risk, says Irwin. So, in 2002, the Oak Ridge facility was asked to consider participating in the revival of centrifuge manufacturing and technology.

“We have been working with USEC during the past two years and now have a proposal in to them for our participation as manufacturer of those machines,” Irwin says. “If everything goes according to plan, and we don’t know why it wouldn’t—we actually built these machines 20 years ago—there’s potential to build approximately 12,000 machines.”

Irwin is hopeful the contract will be awarded by the end of May, but a spokesperson for USEC says only that she hopes to make an announcement “sometime this year.” Boeing Oak Ridge is competing against Honeywell of Torrence, Calif., for the contract. The work could be awarded to one of the companies or shared by both.

Both avenues pursued by Boeing Oak Ridge may well converge, since the state’s economic development office offers companies a variety of tax-based incentives to encourage new investment in the community.

What role state and local officials would play in helping secure the USEC contract is unclear, but the potential for the community is not. Irwin says anywhere from 150 to 300 jobs would be created, depending on how much of the work they get. That certainly would help the Oak Ridge facility feel a bit more comfortable about the future.