Why Washington will weather Boeing’s 737 MAX crisis
In the early 1970s, mass layoffs at Boeing led to a cascading economic bust throughout the Puget Sound region. Despite the many issues Boeing faces today, one economist doesn’t see the company’s current problems leading to similarly disastrous consequences in 2020.
“Boeing without a doubt is remarkably important to our regional and state economy,” Windermere Chief Economist Matthew Gardner told KIRO Radio’s Dave Ross. “However, at the same time, what was different between now and 1973 is the diversification.”
In the 1970s, Boeing was virtually the only large-scale job producer in the region. Today, the tech sector has provided a job market that’s less dependent on any one, single company.
“I think it is that diversification which can be very protective to our economy regionally,” said Gardner. “I never like it when any one market relies on one company or one asset class.”
“Look at Detroit,” Ross noted, pointing to the Motor City’s reliance on the auto industry, and the many risks associated with that dependency.
That being so, Gardner sees the effect of Boeing’s issues with the 737 MAX as more of a national issue than a regional one.
“If Boeing does not deliver a commercial aircraft in Q1, that can reduce the U.S. GDP by over two-tenths of 1%,” he detailed. “So we’re not talking about something that just affects Washington — it can actually demonstrably slow down the U.S. economy.”
“I think that’s more troublesome,” he added.
As for when Boeing might finally put the recent 737 MAX crisis behind it, Gardner is optimistic.
“I think they’re going to get there,” Gardner predicted. “I think they will re-certify the 737 MAX probably in the next 3 to 4 months.”
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