• Expanding workforce training programs in high–demand fields.
• Increasing the number of degreed engineers graduated by state universities.
• Funding transportation and port improvements.
• Working with local governments to ensure streamlined permitting.
• Fostering better relationships between labor unions and management.
• Assessing the economic impact of the state aerospace industry to prove its importance and justify the investments.

16 transportation projects on county leaders' wish list

By Jerry Cornfield, Herald Writer

OLYMPIA -- Snohomish County is the state's third most populous and home to a bustling manufacturing industry, but community leaders are concerned it may get shortchanged when a plan to raise billions of dollars for transportation surfaces this week.

They've been lobbying hard for inclusion of hundreds of millions of dollars for projects aimed at sustaining one of the most robust county economies in Washington.

They pitched their message directly to leaders of the House and Senate transportation committees Friday at a lunch buffet in a downtown Olympia restaurant. About 75 business, labor, environmental and political leaders came from every corner of the county to take part.

"I don't think we've done a good job promoting … the importance of Snohomish County as an economic engine for our state," said Troy McClelland, president of Economic Alliance Snohomish County, which organized the event.

Snohomish County Councilman Dave Somers echoed the sentiment.

"We're here to remind people what we've got going on in Snohomish County and ask them not to forget us," Somers said.

The chief targets of their reminding were Rep. Judy Clibborn, D-Mercer Island, who runs the House transportation panel, and Sens. Tracey Eide, D-Federal Way, and Curtis King, R-Yakima, who jointly run the Senate committee.

Click here to read the full story on the Heraldnet.com

After a recessionary bump, Seattle's northern neighbor rebounds with purpose and passion.

Seattle Business Magazine  |  Tim Newcomb   |   April 2013   |  FROM THE PRINT EDITION

Snohomish County, which sweeps across the region north of Seattle from the water-kissed shores of Puget Sound to the craggy slopes of the Cascade Mountains, has seen its economy transformed in recent decades from one based on farming, logging and paper to one centered on aerospace and national defense.

Now, thanks to a burgeoning, well-heeled population, a diversifying manufacturing sector, and reenergized retail and entertainment destinations, the county is developing its own regional identity, increasingly independent of the powerful magnetic pull of Seattle and the towering presence of the Boeing Company and the U.S. Navy. To top it off, the county airport at Paine Field could soon begin offering commercial airline service, helping to attract even more new businesses to the region.

"There is a real sense of optimism,” says Troy McClelland, CEO of Economic Alliance Snohomish County, a consortium of the Everett Area Chamber of Commerce, the South Snohomish County Chamber of Commerce and the Economic Development Council of Snohomish County. "We are a vitally separate entity that’s fueling the state’s future.”

It is a far cry from how things looked just a few years ago. In the recent recession, a collapse in the housing, banking and construction sectors hit the region particularly hard, pushing unemployment to 10.6 percent in 2010. Nearly half of the county’s independent banks disappeared, including Everett’s Frontier Bank and City Bank of Lynnwood. Then, when it looked as if things couldn’t get any worse, Kimberly-Clark Corporation announced in 2011 the shuttering of its Everett paper pulp plant, a move that led to the loss of as many as 900 jobs.

But Snohomish County is rising again, with its unemployment rate now down to 6.7 percent and its banks much healthier. Total population reached about 722,000 last year, up from 606,000 in 2000. By 2025, the number of county residents is expected to surpass 900,000.

Boeing’s Everett plant remains the backbone of the Snohomish County economy, and its presence has played a strong role in the county’s recent recovery. More than half of the 11,000 direct and indirect jobs the aerospace giant created in Washington state in 2011 were in Snohomish County. And the company continues to create at least 5,000 direct aerospace jobs a year, according to Snohomish County Executive Aaron Reardon. Strong sales of the Boeing 777 keep assembly lines humming, and expectations are high for increased production of the 787 Dreamliner in Everett, irrespective of its nagging assembly and safety issues. Also, Everett expects to reap a substantial number of the 11,000 jobs that are anticipated from Boeing’s success in winning an Air Force contract to supply a new-generation air tanker.

"The fact that our state is such an enormous player [in aerospace] is good news,” says McClelland. Those high-paying manufacturing jobs, he adds, have helped boost median personal income in the county to $62,000, up by $10,000 in the past decade and among the strongest increases in the United States.

Similarly, Naval Station Everett has been a mainstay of the local economy for a generation, with about 6,000 sailors and civilians assigned to commands there and creating a sprawling growth footprint among suburban communities. But the county’s economy has grown more complex and diversified in recent years, providing what County Executive Reardon calls "opportunities for personal and professional growth.”

Take manufacturing, which extends far beyond aerospace to include biotech firms like CMC Biologics and Philips, instrumentation companies like Fluke Corporation and Intermec, heavy machinery companies like Advanced Rail Concepts and exciting green startups like Microgreen Polymers.

Aerospace suppliers and analysts remain confident in Boeing’s 787

Emily Parkhurst Staff Writer- Puget Sound Business Journal

While the future of Boeing’s 787 Dreamliner remains in question and the brand new fleet sits grounded worldwide, analysts and the people who run local aerospace companies are confident that the industry-leading company that makes the jets will remain strong.

The Dreamliner is a "small but important subset of aerospace in our community,” said John Monroe, chief operating officer of the Economic Alliance of Snohomish County and a former Boeing executive.

Monroe said he can’t imagine any near-term impact on the local aerospace industry as long as the 787 program isn’t delayed too long by electrical problems that have prompted a federal investigation.

The Federal Aviation Administration grounded the planes last week — and governments worldwide followed suit — after serious problems on two planes with the new lithium-ion batteries that are a selling point for the lighter, energy-efficient jets.

Investigators have yet to identify what caused an electrical fire on one plane and a battery meltdown on another. And when the investigators do determine a cause, a possible strike by Boeing engineers could further delay any necessary repairs.

Boeing spokesman Marc Birtel said the company has formed teams of hundreds of experts who are working around the clock to resolve the issues with the Dreamliners. Boeing will not deliver any 787s until the FAA approves a fix and that fix is implemented, he said.

So far, the company has not slowed production. And airlines are holding to previously placed orders for 799 Dreamliners; 49 planes have already been delivered.

With so much of the region’s employment tied to Boeing, any updates from the company, investigators or airlines are being put under a microscope.

"We as a community need to be as supportive as we can,” Monroe said.

The aerospace industry is responsible for approximately 30 percent of all Snohomish County wages and, Monroe said, that does not count the "multiplier effect” of the aerospace industry, which he estimates creates one additional job for every aerospace job.

More than 94 percent of Washington state’s 97,300 aerospace workers are in King and Snohomish counties, according to preliminary 2012 data from the Washington Department of Employment Security. While not all of them work for Boeing the huge company is a major customer for many of the smaller companies that supply anything from plastic airplane windows to emergency lighting to the machinery used to build the planes.

The optimism among Boeing suppliers stems in part from the fact that the Dreamliner is still early in production and because there are plenty of other planes to work on. While Boeing has stepped up production of the Dreamliner after years of delays, it also has dramatically increased the pace of assembly for the 737, stretching to meet strong demand.

Stephen Gear, president of Tacoma-based Bradken Energy Products, said the Dreamliner’s troubles should have minimal impact on his company because "the financial impact (of the Dreamliner) to Bradken is more long term than short term.”

Bradken is Boeing’s leading supplier for a specialized cast mold and dies that are used to form the titanium and composite materials in the fuselage in the Dreamliners. Because the molds have a long working life span — five to 10 years before they need to be replaced — and Bradken has already delivered $1 million worth of them to the Dreamliner program, it would be a long time before the company felt the effect of slowing Dreamliner sales.

Gear estimated that if airlines were to cancel or defer orders for the planes, it would cost Bradken about $350,000 per year at its Tacoma sites. That’s a relatively insignificant amount compared to the company’s annual sales of $80 million.

Mark Peabody, the executive vice president of Astronics, an airline accessory electrical supplier with a production line in Kirkland, said that despite Boeing’s huge presence and influence here, the aerospace industry is fairly diverse.

"For us, a very small part of our sales are to Boeing directly,” Peabody said.

Investors seem to share local aerospace leaders’ optimism. Boeing’s stock price has barely dropped 2 percent since the grounding.

But one unresolved issue looms large: Repairs to the plane’s electrical systems could be further delayed if members of the engineers union go on strike.

Negotiations between the Society of Professional Engineering Employees in Aerospace (SPEEA) and Boeing were not going well before the 787 was grounded, and talks ended Jan. 17 without an agreement.

Now, as SPEEA prepares for a vote on the contract in early February, union officials have said that if Boeing does not accept the union’s "best and final offer” — which essentially extends the existing contract for another four years — a strike is "highly possible.”

Boeing has given no indication it will budge on its own offer, which would extend the contract for existing Boeing employees but would eliminate the pension system for new employees, replacing it with a 401(k). The union described the offer as showing Boeing’s "growing disrespect for the engineers and technical workers who are essential to working issues and restoring confidence in the 787,” although the union council members, elected to represent union members in the workplace, have not yet made a recommendation on which way to vote.

Birtel said the company has a "contingency plan” should SPEEA go on strike, but he would not elaborate on the details.

Scott Hamilton, an aerospace analyst for Leeham Co. who sits on the board of the Pacific Northwest Aerospace Alliance, said the impact from a strike would depend on how long it lasts.

"A couple of days would be inconsequential,” he said. "A lengthy strike would be another matter.”

He said that while the machinists union, the International Association of Machinists and Aerospace Workers (IAM 751), is prohibited by contract from honoring picket lines, he still expects that a strike by SPEEA would generate "sympathy actions” that could slow 787 production.

For example, he said, the machinists could tag certain items in the production line so they require engineers to review them, which would mean the items could not be delivered until an engineer signed off.

It wouldn’t be the first time a strike affected the 787. In 2008, Boeing partially blamed a 58-day machinists strike for delays to Dreamliner deliveries.

Delivery of the 787 has already been delayed for years, thanks to a variety of factors, including issues with the lightweight carbon fiber body of the planes. (See timeline, page 36.)

Monroe, of the Snohomish County economic group, remains confident that Boeing will "identify the problem, and if it requires a design change, get that quickly completed, tested and certified.”

Still, he said, any struggles for Boeing are struggles for Washington:

"When things do not go as planned, we as a community feel the hurt and pain as well.”

eparkhurst@bizjournals.com | 206.876.5441

Strike would be costly for Boeing and SPEEA

With the contract vote looming, Boeing and the union are counting on being the side that knows its workers best.

By Michelle Dunlop, Herald Writer

EVERETT -- Who knows the Boeing Co.'s 22,950 engineers and technical workers better: the company or union officials?

That's an essential question to be resolved when members of the Society of Professional Engineering Employees in Aerospace vote on the company's contract.

SPEEA negotiators are urging members to reject Boeing's offer and to give them the OK to call a strike, if necessary. The union's major beef is that the offer does away with the defined pension plan for new workers. But the union's council of elected representatives decided this week that it needed extra time to understand the negotiating team's rationale.

Boeing officials hope engineers and technical workers will ratify the new deal quickly so they can focus on fixing the company's troubled 787, which was grounded by the Federal Aviation Administration last week. Engineering leaders held a webcast this week to explain the company's position.

"We'd like to see members ratify this as quickly as possible," Doug Alder, a spokesman for Boeing, said this week.

Boeing and the union won't know which one has judged the members correctly until mid-February, when SPEEA is expected to tally votes.

SPEEA had members' backing last fall when negotiators recommended they reject Boeing's first offer. Ninety-six percent of the engineers and technical workers who voted turned down Boeing's proposal. At the time, Jim McNerney, Boeing's chief executive in Chicago, expressed confidence that the contract would be resolved "within weeks."

But the union's history of predicting what union members will do isn't spotless, either. In 2000, SPEEA negotiators recommended members accept the company's final offer, calling Boeing concessions concerning weekend hours and the preservation of retiree health care a "partial success."

SPEEA's council declined to make a recommendation on that offer, and engineers and technical workers went on strike that year.

So if there is another strike, what are the economic implications? The stakes are high for Boeing and union members.

John Monroe, chief operating officer for Economic Alliance Snohomish County, was still working at Boeing during the 2000 strike. He doubts that a SPEEA strike would have a significant, long-lasting impact for the county.

"You might see a small reduction in discretionary spending," he said. But "they're still going to make house payments and buy groceries."

The 7,799 engineers who work at Boeing's plant in Everett would lose an average of $2,158 in wages per week during a strike. The Everett site has 3,885 technical workers. The average technical worker would lose about $1,478 in pay each week during a strike. Altogether, SPEEA members in Everett would be down about $22.6 million each week in lost wages.

On Thursday, Everett Mayor Ray Stephanson was hopeful that Boeing and SPEEA could resolve their differences. But he expressed concern about the possibility of a long-term interruption in production at Boeing's Everett site, where 747, 767, 777 and 787 jets are built."It would be a disservice to the community to have a long-term strike," Stephanson said. And there could be other fallout, not necessarily economic.

"I don't think it's going to help the relationship" between the union and Boeing, Monroe said.

He likened a strike to a legal separation between spouses. The couple might rekindle the relationship, but it wouldn't be easy.

Monroe is skeptical, though, about a strike spurring Boeing to move engineering work elsewhere, at least not to the extent it did when the company opened a second 787 production line in South Carolina following a Machinists union strike in 2008."

Boeing has demonstrated they can go to South Carolina and they can get quality airplanes delivered," Monroe said. "I don't think I have the same level of confidence with Boeing starting up an engineering center there and getting the same skill level we have here."

The Machinists strike in 2008 was estimated to cost Boeing $100 million each day in penalties and lost sales. A local economist estimated the strike took about $100 million per month out of the Snohomish County economy, because of the cut in paychecks.

The Machinists walked out before the housing market's collapse and stock market crash. Over the 57-day strike, Boeing's shares plummeted more than $20, from $62.89 to $42.36. The day a resolution was announced, Boeing's stock rose 15 percent in a day.

An engineers strike would have different repercussions. Machinists would continue building jets, which Boeing might not be able to deliver on time because the company needs FAA-approved engineering representatives, who are Boeing employees and SPEEA members, to sign off on deliveries. SPEEA Executive Director Ray Goforth says the company has about 1,500 of these representatives who can clear deliveries.

Meanwhile, Goforth has said that Boeing's corporate leaders have a "real delusional level of denial" when they downplay the role SPEEA members will play in resolving the company's 787 troubles.

But Monroe, the former Boeing executive, wonders whether SPEEA members' pride in the 787 might win out over loyalty to the union. Many engineers spent thousands of hours designing the Dreamliner, seeing the jet through initial development woes and into commercial service. The engineers are proud of their contributions to the program, Monroe said.

"To not be part of the solution" during a strike, he said, "I would feel very bad about that."

Michelle Dunlop: 425-339-3454; mdunlop@heraldnet.com.

Published by the HeraldNet: Thursday, January 24, 2013, 12:58 p.m.

Everett's finances faring well, mayor says in address

By Kurt Batdorf, For The Herald

EVERETT -- In his 10th State of the City address, Mayor Ray Stephanson was glad to report that the city's finances are in "remarkable shape" despite the recession that began in 2008.

Speaking to members of Economic Alliance Snohomish County on Thursday morning at the Everett Golf and Country Club, Stephanson credited the city's finance staff and the cooperation of the city's labor unions for keeping Everett's expenses in check while avoiding layoffs and involuntary furloughs

.That cooperation helped the city improve its bond rating three times to AA+, which he said is "almost unprecedented" among municipalities nationwide since the recession began. The improved rating helped the city save $10 million on a recent refinance of $72 million in municipal bonds, he said.

"The city lives under a new economic norm now," Stephanson said.

The new normal might not be so bad, though. "I do see an improving economy," the mayor said.

The community banks that survived the recession are starting to make more loans to small businesses that are starting to hire more workers.

Stephanson expects to see some industrial jobs return to the site of the former Kimberly-Clark paper mill on Everett's waterfront. The company's closure of the mill in April cost 700 jobs. Kimberly-Clark for months has been demolishing buildings on the site to clear it for redevelopment.

The mayor believes the site has a bright future since it's one of only three deep-water ports on the West Coast with development potential. He wants to see an operation that supports the aerospace sector and could improve the neighboring Port of Everett's capacity without encroaching on ship movements at Naval Station Everett.

Stephanson said he spoke with Bellingham's mayor about what that city learned in the years after the closure of the Georgia-Pacific pulp mill on its waterfront while the city weighed zoning and redevelopment options. The City Council this month retained the former mill site's industrial zoning, requiring water-dependent uses along the immediate shoreline. The mayor lauded that decision.

"I think we came to the best possible decision on this issue," Stephanson said. "We're in a positive place on the waterfront plan."

On the other side of the city, the mayor said, Everett's riverfront project development partner, OliverMcMillan of San Diego, received a letter of intent from Polygon Homes to take over all development of the mixed-use residential and retail property along the Snohomish River. He said he expects to see construction activity begin there in the next 12 to 18 months; the recession had kept the project on hold.

Regarding the downtown core, Stephanson said he signed paperwork obligating Marriott hotel developer Touchstone to complete its financing by June and begin construction of a hotel at Colby Avenue and Wall Street by October or Touchstone forfeits $500,000.

Lobsang Dargey, developer of Potala Village at the corner of Pacific and Rucker avenues, has started site preparation for the new Everett Farmers Market, hotel and apartment complex at Grand Avenue and Wall Street.

Stephanson acknowledged two of Everett's shortcomings: median family income that's $10,000 less than the state average and a shortage of residents with college degrees.

"We can't wish that away," he said, but education is the answer.

The mayor noted how well Everett Community College and Washington State University are integrating their engineering programs to feed more graduates into the local work force. The Boeing Co. is clamoring for engineers to replace those approaching retirement.

"I fully expect to see a WSU campus in Everett in our lifetimes that will rival the Pullman campus," Stephanson said.

Kurt Batdorf: 425-339-3102; kbatdorf@heraldnet.com.

Puget Sound Business Journal by Steve Wilhelm, Staff Writer
Date: Friday, November 16, 2012, 3:00am PST

John Monroe retired from Boeing in 2003 as a director of program management, but remains active in aerospace in Snohomish County, where he lives. After years of volunteering as an aerospace consultant for the former Economic Development Council of Snohomish County, he now works part-time as chief operating officer for its successor, Economic Alliance Snohomish County.

About why he has kept active in aerospace: Part of why I’m here is because I truly enjoy what I do … there are certain things I want out of living in Snohomish County, living in Everett. Unless you have a strong, vibrant economy...

Click here to read the full story in a downloadable pdf

Banker sees threat in new capital rules of Basel III

By Debra Smith
HBJ Freelance Writer

EVERETT — Banking reform meant to fix the practices that led to the 2008 financial meltdown could end up doing more harm than good to the Snohomish County economy — and the nation.

Bank capital rules proposed by the Federal Reserve will likely make it more difficult for local businesses and individuals to obtain credit and could even drive community banks out of business, say some financial experts.

That would stifle smaller businesses, the lifeblood of the local economy.

The new federal rules enact an international agreement known as Basel III. International financial regulators conceived Basel III to create a more resilient banking sector by strengthening global capital and liquidity rules.

Regulators want to put a stop to mega banks’ laissez-faire lending practices that led to the global financial crisis and U.S. recession in 2008. They want banks to rely more on equity than debt to fund themselves.

The international accord and the federal proposal would require banks to maintain capital equal to 7 percent of their risk-bearing assets. That’s about three times what’s required now. The rules would be phased in from 2013 to 2019.

In a comment letter to the Federal Reserve, the Independent Community Bankers of America asked regulators to exempt community banks from the proposed capital standards.

Applying the capital standards to community banks would shift the definition of regulatory capital, minimum capital requirements and risk sensitivities, representatives from the national organization wrote. The standards were "never intended to apply to a domestic community bank.”

They added that the proposals would significantly erode community bank profitability and credit availability and drive community banks out of business.

Requiring banks to have higher levels of minimum capital on hand is a positive change, said Mark Duffy, CEO and president of Mountain Pacific Bank in Everett.

He objects to the one-size-fits-all approach to calculating the risk of loans. The rules are needlessly complicated for small banks, which generally don’t offer complex investment and loan products such as collateralized debt obligations.

On some loans, the rules assign higher amounts of risk than before, which means a bank would have to hold more capital. That, in turn, limits the amount of money the bank can loan out.

For example, take a loan with a balloon feature. Mountain Pacific Bank doesn’t handle many mortgages, but when they do, they typically offer a fixed interest rate for the first five years, then adjusts the loan to current market interest rates — hence the balloon. This type of loan receives a much higher risk score under Basel III.

The new rules also change how capital assets are calculated. Some assets that are now considered part of a bank’s capital would not factor into the equation, which means small banks would be on the hook to raise even more capital they couldn’t loan.

Duffy estimates that the new requirements will decrease Mountain Pacific’s lending capacity by $11 million annually. That’s about 10 percent of the bank’s current outstanding loans.

Troy McClelland, president of Economic Alliance Snohomish County, warned in a letter to federal regulators and legislators that Basel III would likely stifle the local economy, "significantly limiting the capital available to small businesses, local developers and even our local governments.”

An analysis by EASC found that the rules could negatively affect more than 200 businesses and potentially harm 6,000 to 10,000 employees in Snohomish County. In an interview, McClelland described those as conservative numbers.

Officials from the state Department of Financial Institutions’ Division of Banks have raised similar concerns about Basel III and the fed’s proposed rules. So have more than 50 U.S. senators in a letter to federal bank regulators.

So, too, has the Conference of State Bank Supervisors, a national organization of banking regulators. In a prepared statement, that organization called the capital requirements "highly reactionary” and not in the best interests of the U.S. banking system or the national economy.

Duffy supports strengthening capital requirements of community banks. In the past four years he’s watched half of Snohomish County’s community banks disappear, eaten alive by the economic crisis.

His own bank, Mountain Pacific, got stuck with some troubled loans when the economy fell apart, causing the Federal Deposit Insurance Corp. to place a cease-and-desist order on lending. FDIC has since lifted that order, after Mountain Pacific raised $10.5 million in additional capital, increased liquidity and added to its loan-loss reserve.

The solution, Duffy said, is to let the regulators who directly oversee local banks calculate the lending risk formulas, not an international banking committee.

The Conference of State Bank Supervisors recommends strong capital standards for community banks, but insists the framework must be clear and easy to implement and sustain.

"An overly complex capital rule will only increase cost to the industry, curtail credit availability and drive industry consolidation,” according to a prepared statement from the group of banking regulators.

The law of unintended consequences fixes on polices crafted with the best intentions. Consider Wall Street reforms, legislative remedies to the risk-crazed profligacy of the 2000s, which have been an essential check on a capital culture gone berserk. The fixes borne of good intentions have mostly created positive outcomes, and that includes establishing a climate inimical to the bad old days.

A one-size reform strategy, however, can sting the little guy, imperiling the financial health of community institutions that didn't contribute to the meltdown in the first place. New regulation, first conceived in the third accord of the Basel Committee on Banking Supervision, throws the question into bold relief. Capital requirements from "Basel III" will extend to community banks -- not simply the targeted mega banks responsible for the 2008 train wreck. Community banks breathe life into small businesses, the frontline in reviving an anemic economy. And freighting community banks with even more capital requirements is a case study in what not to do.

Communities around the country, including in Snohomish County, will pay a steep price if the current Basel III regulatory framework moves forward. Troy McClelland, the President and CEO of Economic Alliance of Snohomish County, observed that Basel III will have a stifling effect on the local economy by curtailing the capital available to small businesses, local developers, and even local governments. Community banks will be shoehorned into raising capital that they won't be able to lend to area businesses. The fallout will be sobering. An analysis by the Alliance indicates that Basel III will squeeze over 200 regional businesses and potentially kill 6,000 to 10,000 jobs, just in Snohomish County.

A bipartisan group of 53 U.S. Senators signed a letter to Fed chair Ben Bernanke, along with the acting chair of the Federal Deposit Insurance Corporation, and Tom Curry, the Comptroller of the Currency. The letter underscores the unintended-consequences' rule, that dinging the good guys does violence to a sound economy. "The proposed rules could make it even harder to raise needed capital," they write. "Community banks may change their business plans as a result of the rules, thereby reducing lending and economic growth in the communities in which they serve."

The comment period for Basel III ends on Oct. 22. Citizens should phone and email Sens. Patty Murray, Maria Cantwell and other member of the Washington Congressional delegation to encourage them to weigh in, sign the letter, and contact Bernanke directly.

No one suggests a laissez-faire approach to community banks. Regulation is demanded, and entities such as the Washington State Department of Financial Institutions (which is likewise opposed to the Basel III framework) do a superior job.

Only in dreams do we see accidents unfold in slow motion. Unless we act, Basel III is an accident that will morph into a colossal error, for Snohomish County and for the country.

Click here to read the article on heraldnet.com

(LYNNWOOD) ...Economic Alliance [Snohomish County] brought business and education leaders together on September 13th at Edmonds Community College to discuss the importance of STEM (Science, Technology, Engineering and Math) education in Washington State.

Edmonds Community College President Jean Hernandez emphasized STEM education as a way to grow a local workforce and stay competitive in aerospace.  Hernandez was followed by the Executive Director of Washington Alliance for Better Schools (WABS), Emily Yim. Yim told the audience the mission of STEM education is, "Preparing our Children for the 21st century.” WABS brings school superintendents together with business leaders in a collaborative process to focus on STEM education in the Puget Sound area.

Mark Lewis from Washington STEM said the goal of his organization, which is funded by the Washington Business Roundtable, is to help the public understand the importance of STEM education. "The education pipeline is not working yet,” he explained, saying we are currently, "over-producing an under-prepared work force."  Graduates need "technical skills and knowledge,” to be ready for 21st century jobs, according to Lewis.

Washington STEM emphasizes education, pre-K to college, to develop STEM talent.  They have a variety of grants available to help schools and support programs outside the school system. Washington STEM awards classroom grants of $2,000 to $20,000 to "advance a new generation of innovators," Lewis said. Larger grants of $25,000 to $200,000 are designed to "advance programs that work."

They are also working on developing an inquiry-based  curriculum, using real-world  challenges.  This approach would emphasize effective collaboration and teamwork to solve problems, which is very different from the traditional style of education. "STEM involves real-world issues and it requires kids to struggle for answers,” Lewis said. "I think we take the struggle out of the education system, and that's a disservice to our kids."

Lewis acknowledged the challenges and barriers to STEM education in the classroom, saying, "Teachers do not have the time in the regular school day to do STEM projects.” He added, "Businesses have the same issues, as they struggle to get the job done with limited resources, but the two must come together to develop the workforce.” Lewis explained there is a perception that STEM education is only for high performers.  He said, "STEM is all about the questions, not the answers.  It should lead to inquiry and curiosity,” adding, "STEM is for everybody.” Lewis encouraged industry to get involved with youth by volunteering their time through mentorships and community partnerships.

Click here to read the whole story on Mountain Loop Express

Report on Paine Field commercial flights released

Herald Staff

Economic leaders push for focus on STEM education

A state leader in the push for STEM education says we're overproducing an underprepared workforce.

By Kurt Batdorf, The Herald Business Journal

LYNNWOOD -- It seems like you can't enter a conference room these says without hearing the latest buzzword making the rounds in education and industry circles: STEM.

Economic Alliance Snohomish County attracted a few dozen education and industry heavyweights to Edmonds Community College on Thursday to discuss what STEM -- science, technology, engineering and math -- means for the county's employers, especially those in high tech.

"How are we going to compete as a region?" That question was posed by Shannon Affholter, EASC's executive vice president for business development, addressing the audience and panelists Amanda Goertz from the Future of Flight and Mark Lewis of Washington STEM. "Our goal is not just to have a great 'Kumbayah' moment here."

Lewis said the goal of his organization, which is funded by the Washington Business Roundtable, is to help the public understand the importance of STEM education.

"To put it bluntly, we're overproducing an underprepared workforce," he said. "We have a profound sense of urgency. We're trying to articulate what STEM is and what it means to the community."

Washington STEM awards classroom grants of $2,000 to $20,000 to "advance a new generation of innovators," Lewis said. Larger grants of $25,000 to $200,000 are designed to "advance programs that work."

The STEM movement isn't limited to Washington state. Lewis said Washington STEM is working with similar organizations in North Carolina, Oregon, New York, Texas and Ohio to share best practices while working with industry experts and teachers to develop STEM curriculum.

"It's a real-world issue and it requires kids to struggle" for answers, Lewis said. "I think we take the struggle out of the education system, and that's a disservice to our kids."

Goertz said she's working with educators to see which STEM curricula work and which don't.

"I think teachers are overtaxed," she said. "They don't have time to tap into external sources" such as Washington STEM.

Internal and external factors that support the educational status quo are the biggest issues STEM faces, Lewis said.

"That's a real challenge for us," he said. "The view is it's for 'smart kids.' STEM is for everyone. We need to make it accessible."

 The Toppenish School District adopted a STEM curriculum three years ago and is seeing results. Toppenish Superintendent John Cerna said one-third of Toppenish students are migrant or transitional bilingual, and 99.8 percent of students qualify for free or reduced-price school lunches based on family income. Despite the poverty and language deficits, Toppenish High School's graduation rate is 90 percent, and 133 of 149 graduates in the class of 2012 received scholarships worth $1.7 million.

"Most of the kids live in poverty, but that can't be a reason to remain in poverty," Cerna said.

Toppenish High School started STEM in 2009 with three sections of Introduction to Engineering Design, he said. Now the school offers 27 sections of STEM classes. They're so popular that the school's 20-seat studio has more students than work stations.

Cerna said his school board is prepared to commit more resources to bring STEM to the lower grades, even though it's an expensive proposition.

"I think we've come a long way in three years," Cerna said. "Before STEM, we couldn't fill a calculus class. We went from seven kids to 76 kids."

What clicked for Toppenish kids was seeing the everyday relevancy of STEM education, Cerna said.

"Look," he said. "We have architecture and engineering all around us."

Kurt Batdorf: 425-339-3102; kbatdorf@heraldnet.com.

Ready market for county businesses

By Eric Schinfeld, Troy McClelland and John Mohr 

This summer, Russia will end its status as the largest economy in the world not yet in the World Trade Organization, opening its markets to a wide variety of increased international trade opportunities.

There's only one problem for businesses in the United States. Unless Congress passes permanent normal trade relations (PNTR) with Russia, U.S. firms will be forced to sit idly by while competitors around the world take advantage of lower Russian tariffs and reduced market barriers.

Russia is the world's 11th largest economy, but only our nation's 31st largest export market. The good news is that things could significantly improve when Russia joins the WTO. As part of its WTO accession, Russia will reduce more than one-third of its tariffs immediately, and will continue to decrease numerous tariffs over the next three years. In addition, they will enhance intellectual property protections, improve food safety standards, open service markets and increase market access for a wide diversity of industries. Unlike a free trade agreement negotiation, the United States would not be required to give any new access to our own markets in exchange for these benefits.

This issue should be of great interest to Washington businesses, because Russia is one of our fastest growing trade partners. From 2010 to 2011, Washington exports to Russia grew approximately 80 percent, compared to a 16 percent growth in overall state exports. PNTR with Russia will dramatically increase this trend, benefiting a wide variety of Washington industries. For example, services companies will have significantly increased access to -- and protections in -- this market, while farmers will have the assurances that WTO membership requires Russia to abide by science-based animal and plant health standards.

In particular, permanent normal trade relations with Russia could greatly advantage Snohomish County. For example, commercial airplane tariffs will be cut in half, meaning that the Boeing Company and its many suppliers will have increased access to a market predicted to need 1,080 new planes valued at approximately $110 billion over the next 20 years. And Russia is one of the Port of Everett's biggest export markets, particularly with the recent announcement of FESCO Transportation Group expanding their Russian service to include rolling cargoes, and the addition of a new carrier, Sakhalin Shipping Company, between Everett and the Russian Arctic.

Yet, with each passing day, Congress has still not acted on this legislation. While we must continue efforts to ensure that Russia abides by international standards of democracy and civil society, delaying PNTR with Russia is actually counterproductive. The United States Ambassador to Russia has testified that prominent opposition figures in Russia are calling on the United States to take this step, because increased U.S.-Russian economic ties facilitates the improvements that they seek.

At its core, Congressional approval of PNTR with Russia is a matter of basic international competitiveness. And for a state like Washington, with an economy so strongly engaged in trade, it has the potential to significantly increase jobs and economic opportunities for a wide variety of our state's residents.

The Washington Council on International Trade, Economic Alliance Snohomish County and Port of Everett strongly support passage of this key trade legislation, and we're continuing to work with the Washington Congressional delegation to build support for its passage.

We urge you to join us by contacting your elected officials to share your support for permanent normal trade relations with Russia.

Eric Schinfeld is the President of the Washington Council on International Trade. Troy McClelland is the President and CEO of Economic Alliance Snohomish County. John Mohr is the Executive Director of the Port of Everett.

 
An aerospace supplier will soon be bringing more aerospace jobs to Mukilteo.

Michelle Dunlop: 425-339-3454; mdunlop@heraldnet.com.

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Snohomish Chamber Meet Will Feature Panel on Economic Development

(SNOHOMISH, WA) -- The public is invited to attend the Snohomish Chamber's "Member to Member” meeting July 17 at 11:30 a.m. at Faith Assembly Church.

The church is located at 1220 - 22nd Street Snohomish, WA 98290.

The meeting's program is a panel presentation called "Regional, County and City Economic Strategic Planning - Does it all Mesh?”

Featured Speakers include Chris Scott, Director of Economic Development, Puget Sound Regional Council.

Scott will discuss the updated regional economic strategy.

Also on the panel will be Troy McClelland, President & CEO of Economic Alliance Snohomish County present who will speak on the county’s strategy for economic growth as well as Debbie Emge, Economic Development Director for the City of Snohomish who will discuss the local economic development work plan for Snohomish.

The Member to Member Meeting Cost is $15 for Snohomish Chamber Members and $18 for non-members and general public. Please RSVP by July 16 manager@cityofsnohomish.com or call the Snohomish Chamber manager at 425-344-8533.

Click here to read the story on the Sky Valley Chronicle

Everett welcomes USS Nimitz
Written by Elizabeth Griffin

Recently, a group of more than 200 business and community leaders officially welcomed the aircraft carrier USS Nimitz to Everett.

USS Nimitz is a supercarrier in the United States Navy. Named for World War II Pacific Fleet Commander Chester W. Nimitz, the Navy’s last fleet admiral, it is first in its class of 10 nuclear-powered aircraft carriers.

USS Nimitz was commissioned in June 1975. It has called three ports home prior to Everett: Naval Station Norfolk (1975–1987), Puget Sound Naval Shipyard (1987–2001) and Naval Base San Diego (2001–2010). Returning for maintenance at the Puget Sound Naval Shipyard in December 2010, the Navy announced Everett as the ship’s new homeport. It arrived in Everett in March 2012.

Secretary of the Navy Ray Mabus said the decision to base the Nimitz in Everett ensures long-term strategic dispersal of aircraft carriers on the West Coast and saves the Navy more than $100 million due to the reduced cost of moving to Everett and lower housing costs than in San Diego.

"Many factors were considered here, including the quality of life for our sailors and their families, and the considerable cost savings to the American taxpayers,” said Mabus in a press release from the Navy. "Maintaining a carrier in Everett will ensure … operational readiness of our fleet, which is critical to our national security.”

According to Lt. Cmdr. Karin Burzynski, the ship has a robust schedule in front of it. "When we return [from training] in August, we’ll be in port for a few weeks, then get under way again … to conduct workups and certification operations in preparation for a regular deployment, which is scheduled for early next year,” she said.

Kyle Simpson works with the Air Department V1 on the ship. He said life on board is like living in a big floating city. "You’ve got everything you need to live on a day-to-day basis. It’s pretty much my home, with small racks and tight quarters,” said the native Californian.

Simpson and other single, junior sailors on USS Nimitz will live on base in the bachelor housing quarters when the ship is in Everett. Married sailors who have families nearby will live in the community, according to Burzynski.

The crew is glad to be in the region. "Everett is not like any other place,” Burzynski said. "Getting orders to the Pacific Northwest is a fantastic opportunity to explore a different environment and lifestyle with lots of healthy options, food and outdoor activities. And the mountains are gorgeous.”

With limited military housing in the Everett area, many families have opted to rent or buy.  

Naval Station Everett pumps $463 million into the local economy. "That’s 5 percent of the local economy,” said Troy McClelland, president and CEO of Economic Alliance Snohomish County. "Although most of that is salaries, goods and services for the ship, a lot of it is the money sailors are spending at local businesses, car dealerships, and in the housing market.”

"The Nimitz officers, crew and families have a lot to offer the community,” Burzynski said. "You will notice the positive impact on the community with volunteer efforts, employment and friendship.”

Burzynski added that community support for the families is always reassuring for sailors who are deployed.

County Executive Aaron Reardon told the officers and crew, "We are honored to have USS Nimitz and her crew in Snohomish County. We’ve worked vigorously to get you here, so please know that the work you do is appreciated and embraced by everybody in the community.”

Click here to read the article on the Journal Newspapers Website

By Steve Wilhelm PUGET SOUND BUSINESS JOURNAL Published: Jun 15, 2012 at 5:00 AM PDT

Washington state companies are preparing for the real possibility that federal budget cuts may chop a $1.3 billion hole in the state's defense-related economy come Jan. 2.

"Just the anticipation of that has affected our business," said Kale Paulson, vice president of sales and marketing for Fatigue Technology Inc., a Tukwila company that specializes in aerospace fastening systems, half of them for military use.

The worry springs from the Budget Control Act of 2011, which allowed the debt ceiling to rise in exchange for promises of massive budget cuts to be hammered out. With the failure of Congress to come up with a negotiated package to slice $1.2 trillion over eight years, across-the-board cuts are set begin automatically on Jan. 2, a proce ss called sequestration.

The worry extends from the military and aviation sector to the Puget Sound's large maritime industry, where the overhaul of Navy vessels has been the lifeblood for several shipyards.

"It's ugly, it's very ugly... The topic of sequestration comes up at almost every single gathering," said David Jack, president of the Puget Sound Ship Repair Association. "We are concerned about it. The cuts are cuts we shouldn't have to, as an industry, be facing."

Unless, of course, Congress blinks and decides to change the law.

Many industry-related groups are hoping for just that. But Phil Finnegan, an analyst who covers defense matters for the Teal Group, outside Washington D.C., isn't too hopeful.

"There's a lot of pessimism it will be avoided," he said of sequestration. "After the (presidential) election, we will have a lame-duck Congress. The question is if there's anything that can happen before it goes into play."

The impact that Washington state faces is mixed. On the one hand, the state's economy is deeply linked to defense-related aerospace and marine manufacturing, but on the other hand, the economy is also being lifted by the strong commercial aerospace market centered on Boeing.

"It's basically a 10 percent haircut across the program, but compared to what is going on in the commercial world, it's not a big deal for Puget Sound," said Richard Aboulafia, aerospace analyst for the Teal Group.

Federal spending cuts would land hard, however, in some sectors of the state's economy.

The Air Force KC-46 tanker, a derivative of the Boeing 767, and the Navy P-8A antisubmarine aircraft, a derivative of the 737, could be trimmed back or delayed. In early March, Air Force Chief of Staff Gen. Norton Schwartz told an investors group that sequestration could lead to a reopening of the tanker contract, according to a Bloomberg news service story.

And last fall Schwartz told the House Armed Services Committee, "At a minimum, they would slash all of our investment accounts, including our top-priority programs such as the KC-46 tanker, the F-35 joint strike fighter."

Boeing expresses concern, although its representatives declined to address the specific contracts.

"At Boeing Defense, Space & Security, we have been evaluating a potentially devastating impact from sequestration. In our internal planning, we have made assumptions including the worst-case scenario and designing our cost structure to accommodate a potential $1 trillion cut resulting from sequestration," said a statement released by Dan Beck, director of external communications at the defense unit. "Clearly, it would have a deep impact on national security and the defense industrial base."

Locals focused on supporting the Northwest defense industry are trying to find a way through potential cutbacks, whether those cutbacks are imposed through sequestration or though negotiations to find a less-draconian alternative.

"There's going to be some impacts - there have to be when it's straight across the board. Does it affect Boeing and some of the big ones? I don't know how it doesn't, I'm shocked if it doesn't," said Sean Murphy, executive director of the Pacific Northwest Defense Coalition, an organization representing areas defense contractors.

Another area of concern is the impact on military bases. While the military's recent pivot toward the Pacific strengthens chances of retaining funding, some facilities, such as Everett's relatively small Navy base, could be at risk.

"We're paying very close attention to that," said Economic Alliance Snohomish County CEO and President Troy McClelland, a Navy officer. "We have a Snohomish County military affairs committee, very specifically staying in front of the issues and planning process, as it relates to how the base is operating, and if there are things we can do as a community to strengthen support."

Click here to view the story on KOMO's News Website

Published: Thursday, June 7, 2012, 12:01 a.m.

Nimitz given its official welcome
By Kurt Batdorf, Herald Business Journal

EVERETT -- Everett officially rolled out the welcome mat for the crew of the USS Nimitz during a benefit luncheon at the Edward D. Hansen Conference Center at Comcast Arena on Wednesday.

For civilians, that translates to an official top speed of 35 knots, he said.

By Kurt Batdorf, Herald Business Journal

LYNNWOOD -- The Boeing Co. is in a growth mode, but how that growth will change the jetmaker in the years ahead remains to be seen.

Kim Pastega, Boeing vice president and general manager for the 767 program in Everett, gave the keynote speech at Economic Alliance Snohomish County's annual meeting at the Lynnwood Convention Center on Wednesday.

"This is a transformational time for Boeing," she told several hundred of the county's business leaders. "There's a lot of opportunity and uncertainty."

Much of Boeing's upside potential lies in the growing Asia-Pacific and Middle East markets, while much of the uncertainty hovers around the intractable European Union debt crisis, Pastega said. Boeing also faces tighter environmental regulations, changing market demands and possible competition from regional jet makers Bombardier and Embraer, which are looking for a piece of Boeing's and Airbus' duopoly on large jets.

The high price of fuel is pushing airlines to update aging fleets with new planes that should be 15 percent to 20 percent more efficient than older ones, Pastega said. That's one reason Boeing predicts the world's airlines will need 33,500 new planes valued at up to $4 trillion in the years ahead.

While development of the 767 into the U.S. Air Force's KC-46A refueling tanker is going very well, Boeing will face strategic decisions as to how to update the popular twin-aisle 777, also built in Everett. Airbus is preparing to launch a competitive A350 and A350-1000.

Though 2011 was a record-setting year for 777 orders, Boeing knows its customers want a more-efficient plane. With the A350 launch, Pastega said, Boeing will have to respond with a re-engineered 777X or a new 787-10X -- or possibly both.

"The 777 doesn't have any real, direct competition now," she said. "We're thinking hard about how to improve it."

The Economic Alliance meeting also featured the presentation of civic and business awards.

Mike Popke, general sales manager of Lynnwood Honda, and his wife, Wendy Nelson-Popke, co-owner of the dealership, received the alliance's John M. Fluke Sr. Service Award. In November, the dealership donated more than 150 child-car seats to the Swedish Edmonds Birth Center. Both are active on numerous community boards and events.

One nominator said, "Mike and Wendy walk their talk when it comes to the importance of businesses giving back to their communities in Snohomish County."

Tom Gaffney, a retired managing partner with Moss Adams in Everett, received the Henry M. Jackson Citizen of the Year Award.

"Tom collaborates well with others in getting things done for the good of the community," one person said in nominating Gaffney. "He is intelligent and thoughtful in how he approaches issues and people."

The Herald Business Journal presented its inaugural Entrepreneur of the Year award to Jonathan Holbrook, founder and creative director of Tall Taurus Media in Everett.

"Jonathan is enormously involved in the community," one nominator wrote. "He gives so much of his time and his services that he inspires me and, I'm sure, many others."

Mark Duffy, founder and CEO of Mountain Pacific Bank, received the newspaper's annual Executive of the Year Award.

"Mark can be credited with saving local community banking in Snohomish County with his strong character, hard work and determination," one person wrote in Duffy's nomination. "His vision and tenacity has inspired those who work with him and attracted scores of banking customers."

Kurt Batdorf: 425-339-3102, kbatdorf@heraldnet.com.

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A "Who’s Who” list of business, government and community leaders filled the Edmonds Library Plaza Room at lunch Friday to learn more about the Economic Alliance Snohomish County and its efforts to support existing businesses and expand economic development opportunities.

Representatives of the year-old Alliance have been traveling throughout Snohomish County to educate community leaders about their mission, which President and CEO Troy McClelland described as "advocacy, development and connection.” Friday’s meeting was co-sponsored by the Port of Edmonds, the Edmonds Chamber of Commerce and Swedish/Edmonds Hospital, and is part of new Mayor Dave Earling’s commitment to ensure that Edmonds becomes "a player in the long-term economic health of Snohomish County.”

The event drew a group of more than 60 people representing many sectors of Edmonds — from the Mayor and City Councilmembers and Port Commissioners to Swedish/Edmonds CEO David Jaffe, Arista Wine Cellars owner David Arista, Edmonds Center for the Arts Executive Director Joe Mclalwain and Chamber of Commerce President Ron Clyborne.

"We have a variety of businesses in our community,” Earling said in introducing the program. "And it’s not just big businesses that are here. We have a lot of people who own their own shop and maybe have only one employee, but they’re part of our economic engine here too and we want to be able to call attention to that.”

Long-time Edmonds resident Dick Van Hollebeke, who also chairs the Edmonds Community College Board, called the Alliance "the best news I’ve heard” since moving to Edmonds 35 years ago.”There’s more enthusiasm and can-do spirit in this room than I’ve seen in a long time. It’s like Edmonds is finally waking up to its potential, and its potential is going to be formed by collaborations.”

McClelland said the Economic Alliance — created through a merger of the South Snohomish and Greater Everett Chambers of Commerce and the Snohomish County Economic Development Council –was aimed at creating a regional Snohomish County organization "that was as concerned with the south as it was concerned with the north as it was concerned with the east.”

The goal is "to have partnerships throughout the whole county” that can influence everything from lobbying efforts at the state and federal level to business recruitment, McClelland said.

He cited as an example the efforts of the Alliance to ensure that the University of Washington Bothell campus got a third building. "That’s a big deal for the South County,” McClelland said. "Thirty percent of the students at (UW) Bothell come from Snohomish County; of that 30 percent, 25 percent…are south of 128th Street. They come from Edmonds, they come from Bothell, they come from everywhere south.”

McClelland noted that the Alliance focuses both on retaining existing businesses and recruiting new companies to the area. He described a business near Mountlake Terrace that was thinking about moving its company to Texas because it couldn’t find the training resources needed for its workers. The Alliance stepped in to assist and saved 1,500 jobs from moving out of the area, McClelland said.

He also mentioned the importance of protecting the county’s base business — aerospace. "The (Boeing) 777 X line alone is estimated to throw off $700 million in wages a year, $600 (million) of it spent in or around Snohomish County,” McClelland said. Snohomish County has real competition from other states that are attracting aerospace, including South Carolina and Texas, and to remain competitive the county must ensure "that we have a business environment where a company like Boeing would want to stay.”

Earling took the opportunity to remind his captive audience of the developments already in progress or on the horizon in Edmonds. For starters, Old Milltown has a new owner and is beginning to fill up with businesses. In addition, the Port of Edmonds "is very interested in redeveloping Harbor Square, and that has gigantic potential for our community,” Earling said. "With a railroad station just across the street, we know that if the Port puts together a project and the citizens approve it, we could have a mixed-use area down there that would be a real economic driver for our community.”

The Port proposal coupled with the potential sale of Antique Mall means it’s possible for Edmonds to begin to develop "the true potential of our harbor area,” Earling said. Edmonds Green rendering from the Behar Company.

"But the discussion can’t just be about downtown Edmonds,” the mayor added, mentioning recent development at Westgate and also a new long-range concept from the Behar Company to redevelop the corner of 220th Street Southwest and Highway 99. Called Edmonds Green, the mixed-use plan is described as a transit-oriented urban village where residents and business workers "will enjoy short swift commutes, and in many cases, will be able to live within walking distance from where they work.”

The 450,000-square-foot concept includes 237 residential units and 70,000 square feet of office area.

The area of 220th and Highway 99 is a hub for commuters traveling to major employers such as Swedish/Edmonds and Premera Blue Cross in Mountlake Terrace, and Earling said that as the City of Edmonds representative on the Sound Transit Board, he was able to ensure that Sound Transit will consider the possibility of including an additional stop at 220th Street for the light rail extension north to Lynnwood.

 Click here to read the article on myedmondsnews.com