Boeing layoffs cause ripples on Whidbey
June 25, 2008 · Updated 2:31 PM
As Boeing goes, so goes the ecomony of Puget Sound was a prevalent attitude throughout the region in the 1960s and 1970s.
Even after the first two rounds of Boeing layoffs, Whidbey Island is feeling the impact of a work slowdown at the aircraft maker. It's not as bad as the early 1970s, when a billboard near the city limits ordered the last person leaving Seattle to please, turn off the lights. But local merchants are starting to notice as some of their neighbors are laid off work.
Although Boeing bounded back and Seattle became more than a company town in the 1980s and 1990s with the growth of other industries, the events of Sept. 11 have had a devastating effect on the airline giant's business. For Island County the major impact will be felt in more restrained consumer spending brought on by a soft economy.
"It is not so much a matter of how many Island County residents work at Boeing and may be laid off, but rather the overall effects that will be reflected with layoffs from suppliers and contractors for Boeing," said Roberta Pauer, a labor market analyst for the State Employment Security Department.
She predicts the Boeing recession here is just beginning and the effects will be felt in Island County for 12 to 24 months.
"The impact of the Boeing layoffs will create a ripple effect for Island County and the other counties in the region. Less consumer spending overall will affect the bottom line of many different types of businesses."
This is already the case at some businesses. Jeff Ambrose, manager of Cenex in Freeland, said this week his business is already slowing down.
"Our sales are down for sure," he said. "We noticed a decrease in December, probably due to the layoff notices that hit before Christmas. I do expect a little improvement this spring when people are out doing things again. But it won't be as much as the year before."
The numbers of layoffs and termination notices from Boeing is increasing each month. Though it is difficult to pin down exactly how many pink slips are coming home to Whidbey Island, the impact is evident at Island Transit. Mary Bryson, a Ride Share coordinator for the public transit system, said she has taken three ride share vans back from Boeing since December. That is an unusually high number.
However, she said, the vans are already back in use with other companies. Any time a company in decline returns a van, another company on the rise is always ready to take it.
"It's almost as if there's a symbiotic relationship between them," Bryson said.
Tom Ryan, a spokesman for Boeing, said this week the terrorist attacks combined with a slowing economy before Sept. 11 has affected Boeing and business across the region.
"To date in the Puget Sound area 9,600 Boeing employees are off the company payroll since Sept. 11," he said. "That's 64 percent of the total of 15,000 laid off nationally."
Another 19,000 employees throughout the nation have received 60-day termination notices to be effective on Feb. 22 and March 22. About 11,600 of those will be in the Puget Sound area.
Ryan said the Boeing expects to reduce its workforce by mid-year nationwide by 25,000 to 30,000 employees.
The complete recovery process for us is two years away," said Ryan.
He said recovery is not based so much on how many planes are ordered as it is on how many are actually delivered.
"We don't get paid until a customer takes delivery of a plane. From the order date to delivery date is usually two to four years," Ryan said.
He explained that it is his belief that 2002 will be a recovery year for the travel industry.
"In 2003 we expect Boeing to show a profit and get more airlines orders; it will be 2004 before we actually recover and begin making deliveries."
Ryan said Boeing expects to deliver 380 planes this year and between 275 and 300 in 2003. Boeing delivered 525 in 2001.
The Boeing Company does not provide information about the actual number of Island County residents who work at Boeing.
"We receive a number of requests from local publications for the number of employees Boeing employees by county or city, but we just don't have that information. We could ask payroll to work on that, but now is not a good time.," Ryan said.
The unemployment rate in Island County is rising. In December 2001 the rate was 5.1 percent. A year before, the rate was 3.3 percent. For the same periods in Snohomish County, 2001 unemployment was 6.3 percent and 2000 unemployment was 3.5 percent. According to the state's Pauer, 1,500 people filed unemployment claims in December in Island County.
"These numbers are before the full impact of the Boeing layoffs have been felt," she said.