Leaning on Aerospace Means Hard Landing for Seattle : Northwest: Deep job cuts at Boeing threaten to send the Puget Sound area reeling. But not even that can dampen region’s optimism.
They said it wouldn’t happen again, too much had changed, the whole world had changed, and most of all Seattle had grown wise to the punishing consequences of trying to subsist as a company town.
So naturally it had to happen again. After riding high and sassy through the national recession, Seattle and the satellite cities around Puget Sound saw their fashionable, good-times tranquillity spoiled Thursday when the locally headquartered Boeing Co. announced that it was cutting 19,000 jobs in the area during the next 18 months.
The almost 20% cut in Boeing’s huge, 98,300-person work force in the Puget Sound region was made to accommodate a one-third reduction in output of the famed 700-series airliners. Add in all the ancillary service and support employment, and the region is expected to lose between 49,000 and 54,000 jobs by next year.
The effect will send the Puget Sound economy into rough water just as the rest of the country is coming to life. And it rattles the Northwest’s proud, futurist image of itself.
To the hardened ears of many Americans, Boeing’s reductions may ring of just another flagship U.S. company diving for the trenches.
But in greater Seattle, where Boeing is the highest-paying manufacturing company, where it accounts for half of all manufacturing jobs and one of every five jobs of all types--where the dependence on the aircraft business is greater than Detroit’s reliance on automobiles--gloom and uncertainty spare hardly anyone.
“This is a boom and bust place, and whenever we’re riding one we forget the other is coming around the corner,” shrugged Pat Strosahl, an artist and vice president of the neighborhood activist group Seattle Vision. “I expect we’re going to have to scramble for a few years, maybe five years.”
Even to veterans of aerospace ups and downs, this turnaround occurred at blinding speed.
Just a few months ago, Boeing was nonchalantly pointing to a backlog of orders that stretched into the 21st Century. Economic development issues in the region were vastly overshadowed by the problems of growth management. The unemployment rate was below the national average. And Seattle and the other Puget Sound cities cheerfully congratulated themselves for their forward-thinking, globally attuned command of their destiny.
That was then. Today, the state unemployment rate has grown to 8%, slightly higher than the national average and headed up another point at least, according to independent economists.
Instead of stability and growth, Seattle once again finds itself vulnerable.
Everyone here uses the early 1970s as the most frightful benchmark. In those years, Boeing shrank from 105,000 workers to 35,000, unemployment ran into double digits and housing prices were laughable. In those years, the migration out of the region led to a famous billboard that read: “Would the last person leaving Seattle please turn out the lights.”
Never again, civic leaders pledged. But today, any number of independent studies show that for all the talk, Seattle remains no less dependent on Boeing.
The mainstream view of local economists holds that the upturn in the national economy and President Clinton’s repeated statements of support for the aerospace industry should help keep the 1990s Boeing downturn from turning into a 1970s-style panic.
“What it means is that Seattle just lost most if not all of its growth opportunities for the next couple of years,” said Paul Sommers, research director of the University of Washington’s Northwest Policy Center.
But some have gloomier forecasts.
Virtually all the experts acknowledge that Washington faces many foreboding problems familiar to Californians: a large and growing state budget deficit, increasing friction between development and the environment, business complaints of excessive regulation, a troubled educational system, and a dependency on military spending and international trade.
“The political culture in Olympia (Washington’s capital) is writing a script for the same movie that people are now living through in California,” said John Carlson of the Washington Institute for Policy Studies, a free market think tank.
Still, some experts believe that Seattle will save itself from the fate that has bedeviled California, if for no other reason than the Northwest’s optimism.
“Seattle’s capacity for denial, its belief in this stuff that it’s a hot city, will mean this is not as much of a blow as you might think,” said David Brewster, publisher of the Seattle Weekly newspaper.
He cites the most recent Kidder, Peabody & Co. economic analysis of major metropolitan regions. During the three months of the survey--and this was before Boeing’s bad news began to build--Seattle ranked at the bottom of U.S. cities in retail sales and in help-wanted advertising. In both cases, Los Angeles was not even second worst.
Still, Brewster noted, hardly anyone in Seattle would be willing to trade places with someone in Southern California.
“It’s the psychology of Seattle, and psychology is everything in these matters.”
Times researcher Doug Conner contributed to this story.
