In his corner office high amid Chicago’s office towers, Boeing Chairman and Chief Executive Dennis Muilenburg has some words of reassurance for the Puget Sound region.

“It’s still my Boeing home,” he said of the place where he spent the first 15 years of his Boeing career.

Personally, as an ardent cyclist, he said that on trips to Boeing’s jet factories he takes every chance he gets to ride around the Pacific Northwest’s more challenging landscape in preference to Chicago’s flatlands.

As for the company’s outlook in the Puget Sound area, Muilenburg offered some short-term good news: The steep decline in Boeing jobs over the past five years is finally coming to an end, he says, and “you’re seeing us reach that more stable plateau.”

While insisting that Boeing has a solid commitment and investment here, he made clear that much remains up in the air regarding the most critical decision for its future — where and how Boeing will build its next all-new jet.

And yet he also spoke of the edge Washington state has in the competition to build at least one important piece of that next plane.

In an exclusive interview, Muilenburg ranged broadly, explaining why he’s chasing an acquisition of Brazilian jet maker Embraer and why he’ll continue to work closely with President Donald Trump.

Boeing is riding high — churning out record numbers of airplanes, leading the Dow Jones industrials with a share price that’s more than doubled in the past year, and anticipating a tax windfall worth billions of dollars from Trump’s corporate tax reduction.

Two-and-a-half years into his tenure as CEO, Muilenburg, 54, is on top of his world and ready to make aggressive business moves.

Going forward, he said, “The growth opportunity ahead of us is extraordinary.”

Although historically the troughs of Boeing busts cratered employment in the Seattle area,Muilenburg believes an expanding worldwide market for jets means the days of mass layoffs are over.

As the global middle class expands, the annual growth of air passenger traffic has recently accelerated, from a historic trend of 5?percent to above 7 percent last year.

“For the first time in our history, we have the chance to change Boeing from a highly cyclical business to a long-term, sustained-growth business,” he said.

The direction in which he takes Boeing’s anticipated growth over the next few years will have a profound impact on the industrial future of the Pacific Northwest.

Washington state and Boeing’s future

Muilenburg’s office is lined with bookcases full of Boeing airplane models, photos and memorabilia from his 32 years at the company.

In one recent photo at the Kennedy Space Center in Cape Canaveral, Florida, he sports one of the stylish, deep-blue spacesuits Boeing designed for the next generation of space travel. Beside him, similarly clad, is his 13-year-old daughter, whom he’s subtly encouraging to pursue a STEM education.

He showed off another photo of himself with a large group of Seattle-area employees, all in cycling gear and about to head out on a ride.

Muilenburg started out as an engineer in Seattle. When he succeeded Jim McNerney as CEO in 2015, management quickly improved relations with Boeing’s white-collar union, hammering out a new six-year contract in secret negotiations with the Society of Professional Engineering Employees in Aerospace (SPEEA).

“Prior to Muilenburg, management relations with SPEEA were often hostile,” said the union’s executive director, Ray Goforth. “He set a new tone.”

Boeing’s Puget Sound-area work force has shrunk by more than 21,000 jobs since the last peak in fall 2012. But Muilenburg said the decline should stop in 2018, something local Boeing managers have also told Goforth.

As it ramps up production, Boeing is unlikely to cut more machinists. And with the launch of a new airplane ahead by 2019, the company could even start staffing up again on engineers late this year.

Muilenburg insisted that “Puget Sound is part of Boeing for the future in a very strong way.”

“We started there. We still have our biggest presence there. We’ve invested more in R&D and capital than we have in any other site … The technical depth that we have there, and the engineering and manufacturing prowess, is second to none,” he said. “We are there for the long run.”

But he also reiterated the now-standard Boeing caution.

“We are in a very competitive environment,” Muilenburg added. “The cost of living, the cost structure in Seattle, is higher than most of our other sites.”

Boeing last year moved hundreds of jobs in its corporate back-office services unit from Washington state to Mesa, Arizona, simply because that’s “a good, affordable, competitive cost-structure site,” he said.

“We have extraordinary capability in Puget Sound,” Muilenburg summed up, “but that has to be balanced with our need to be competitive and affordable.”

Central to the long-term job outlook is whether this region will build Boeing’s next all-new jet, referred to informally as the 797.

That could be either the so-called New Midmarket Airplane (NMA) that’s being studied for possible launch as early as this year, or a New Small Airplane (NSA) replacement for the 737.

Whichever it is, it’s a key project that will transform the company.

Muilenburg said his commercial airplane team will introduce an innovative, highly automated manufacturing system and also a new development process that builds in opportunities for Boeing to sell follow-on services throughout the service life of the airplane.

“It’s more than an airplane,” Muilenburg said. “It’s the production system of the future, the design system of the future, it’s a new life-cycle lens on how we do product development.”

What factors will determine where the jet will be built? And what can Washington state do to win?

“Future growth in Puget Sound will depend on our ability to compete and win,” Muilenburg said. “Things that add cost to our business structure need to be addressed … It’s cost of living, it’s tax structures, it’s the regulatory environment.”

He said Washington state should also focus on workforce training so that Boeing “can get employment-ready talent coming in.”

All these factors are being considered right now, he said, as part of the business case Boeing is building for the NMA.

“We’re going to look broadly,” he said. “We have capabilities across many sites.” One plus for the Seattle region, he said, is that Boeing is now actively seeking talent outside the traditional aerospace pool.

As Boeing moves into new high-tech areas such as autonomous vehicles, artificial intelligence and additive manufacturing, Muilenburg sees it competing not just with Airbus but with companies like Amazon and Microsoft that have attracted hordes of digital talent and innovative thinkers to Seattle.

And Muilenburg indicated that this region has a key infrastructure advantage when it comes to building the 797’s wing.

He said the $1?billion Boeing spent to build the massive composite wing center in Everett is “not only for the 777X program.”

“If we do the next new airplane,” he added, “doing a composite wing that leverages that facility would make a lot of sense.”

Tribune News Service