WASHINGTON STATE WINNING 7E7 WORK.

Byline: Felix Sanchez Staff Writer

The Boeing Co. announced Tuesday its first new jet design in 13 years will be built in Washington, a boon to commercial aviation but a disappointment to cities in California and elsewhere that had bid for the project.

The much-anticipated announcement to begin offering the plane for sale to commercial airlines was made before a crowd of more than 3,000 Boeing workers and executives in Everett, Wash.

Applications from a half-dozen California cities and nearly two dozen states turned lopsided when the state of Washington, already home to Boeing plants that make most of its commercial planes, threw billions in tax and economic incentives in front of Boeing.

Boeing's decision bitterly disappointed local officials.

``We believe the city of Long Beach put together a very, very competitive application,'' said Assistant City Manager Reginald Harrison, who headed a Long Beach team that bid for the 7E7 Dreamliner factory.

Long Beach is home to two Boeing plane plants, for the 717 commercial passenger jet and the C-17 military cargo plane.

The 7E7 is designed to be a lighter, roomier, more fuel-efficient jet, built in three different models with passenger capacities ranging from 200 to 250 people.

Much of the plane will be assembled at locations outside of Washington, primarily in Japan and Italy. Texas will also be home to some outsourced work. The final assembly, and about 35 percent of the final work, will be done in Washington.

The decision comes two weeks after CEO Phil Condit resigned in the wake of an ethics scandal that had claimed two other top level executives, and questions of a sweetheart deal by the military in connection with a lucrative tanker leasing contract.

``It's not a real big surprise,'' said Bill Schultz, head of United Aerospace Workers Local 148, which represents Boeing blue-collar workers at Boeing's Long Beach 717 and C-17 factories.

``The state of Washington spent a lot of money. California couldn't match those kind of incentives,'' Schultz said.

The decision to begin offering the plane for sale to airlines was made after two days of deliberations by Boeing's board of directors.

It wasn't a hard decision, Schultz believes. ``If Boeing doesn't build it, it will be left in the dust by Airbus. And they still may be. For the company it was an absolutely necessity to go forward with the plane,'' he said.

The new jet won't be formally launched until mid-2004 or enter the market before 2008. Boeing would sell the jet as a replacement for the 757 and 767, with greater range to handle long-distance routes.

Boeing had not approved any all-new airplane program since the 777 in 1990. Pressure to commit to the 7E7 had grown since the aerospace giant pulled away from launching the 747X and the Sonic Cruiser in the past three years, while Airbus was pulling even in the commercial airplane market.

New CEO Harry Stonecipher strongly endorsed the building of the 7E7 on his first day in the top post after replacing Condit.

``We are 10 for 10 in bringing successful planes to market,'' he told the crowd of Boeing workers at a downtown convention center.

The state offered tax breaks of $400 million through 2009, and other incentives that could total $3.2 billion over 20 years.

Boeing's shares gained 73 cents to close at $39.93 Tuesday on the New York Stock Exchange.

The Associated Press contributed to this report.

Felix Sanchez, [phone]