Were Washington Workers and the State Screwed by Boeing?

The State Coffers

The State Coffers

Less than a year ago, the Boeing Company was gifted $8.7 billion in tax breaks from Washington State to ensure that (at least) the triple seven (777) family of commercial aircraft continue to be manufactured in Seattle, along with the retention of machinist jobs.  Boeing has now announced it would be moving 2,000  engineering and defense contracting, jobs to Missouri and Oklahoma.

Boeing said the latest egress of jobs from Washington State was necessary for it to be competitive in the defense side of the business. Translated: “The tax credit largess and wage concessions we got last year were for ‘keeping us competitive’  flying passenger jets. We never said anything about war planes.”

So, were the workers and state double-crossed?  Boeing doesn’t think so.   The Washington politicians who sloppily cut the deal without dotting “Is” and crossing  “Ts,” think otherwise,  and act surprised. They shouldn’t be.  The deal was leaky from the start.  Many of the Boeing workers, who had deep suspicions about the deal and Boeing’s intentions, are not as shocked, but definitely mad.

The proximity between the agreement and the new announcement by the company, make it sting even more. Couldn’t they have waited a year or two?  The politicians in Missouri and Oklahoma are of course gleeful. They no doubt wanted the job shifts announced just in time to include the happy news in their junk mail to voters, before the November elections.

“Governor Faliin Created 1000 High Paying, High Tech Jobs for Oklahomans”  [Actually, many of the workers are moving here from Seattle and we’ll be paying them less than they got in Washington].   Governor Fallin won’t be using the italicized part.

And, how much more could the company be rubbing-it-in by “creating” jobs in Oklahoma City (OKC), where the new workers can also watch Kevin Durant and the OKC Thunder basketball games, if they can afford tickets.  You of course recall how the NBA and Starbucks’ Howard Schultz screwed and embarrassed Seattle a few years ago by arranging for the Supersonic basketball team’s departure to Oklahoma City. (Seattle and Olympia refused at the time to be blackmailed by the NBA into building a new arena, and also couldn’t stomach the insufferable David Stern, so they lost the Sonics).

Some of the Boeing brass in Chicago headquarters who make these decisions are doing their jobs, minimizing costs, maximizing profits, and increasing their leverage over the other Washington by securing Boeing’s presence and profile in as many states as possible.

But other Boeing Windy City executives, who resent Seattle and Washington for its “liberalism,” “elitism,” and  (generally) strong support for labor unions, are happy about all this.  As I said in an earlier post,  the impetus for the company to bully and carry out threats to shift operations to “right to work” states, has its roots in international competition and “free trade.”   And if the company can lower labor costs and receive special tax gifts,  beyond what’s needed to remain competitive, well, hey, that’s what top management is supposed to deliver to shareholders.  Right?

Ralph Nader is making the rounds with a new book, called “Unstoppable,” heralding the coming alliance (as he sees it) between “anti-corporatist” elements of the two major parties.  Both groups are repulsed by corporate welfare and distressed by the increasing power of multi-national corporations over the lives of individuals and sovereign nations.  (The Tea Party professor from the small conservative college  who defeated Eric Cantor and the former Harvard professor, Senator Elizabeth Warren, sound eerily the same on a range of issues).

What will this left-right coalition do?  Negotiate international agreements to secure uniform corporate tax policies around the world, and while they’re at it,  Picketty’s tax on wealth)?  Impose tax and labor law uniformity across the fifty states?  Restrict the mobility of capital in the U.S. and internationally?   None of these is of course remotely feasible today or soon, even if you may think these policies would be beneficial.     Maybe Nader thinks of this as a 100 year struggle.

I am perhaps not doing justice to Nader’s  thinking.  He’s surely not dumb or delusional. And he was well received in a session held by the conservative,  D.C. based think tank, the Cato Institute. So, perhaps I ought to actually read “Unstoppable,” while the Boeing engineers and families pull up stakes to meet up with Kevin Durant in Oklahoma City.

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4 thoughts on “Were Washington Workers and the State Screwed by Boeing?

  1. Russ Lehman

    Irv, thanks…I guess. While there are so many interesting issues surrounding this issue your report is, well, a bit brief and non committal. This story in fact wasn’t even as thorough as those appearing in many woefully simple-minded media outlets. I subscribe to your blog because I thought that, now that your retired, your thought and insights on many matters would now be articulated. Frankly this seems not even as “good” as that which is readily availed from traditional venues. Are you still playing the cautious bureaucrat?

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    1. Irv Lefberg Post author

      Thanks Russ..I think :). But I appreciate your candor. Am sorry to disappoint. I did think I was being pretty candid about my displeasure with the way we have dealt with Boeing, but did pull some punches, as you noticed. Nonetheless I thought it came through. Some of the information was not reported well in the other pieces I saw, including the shift of focus by aerospace industry to international arms market. Also, many followers of the blog are not going to be nearly as well informed as you about Washington related affairs, so they seem to benefit from information that’s not too much more penetrating than coverage you see. For example, not everybody knows about Boeing Chicago’s Basic dislike for the Seattle company and culture. Having said that , I also try to plant some controversial and radical seeds from time to time as food for thought. I added the Ralph Nader book info for that reason. I do believe we are going to eventually have international agreements that try to stem race to the bottom and re think how we conduct “free trade”. I didn’t come right out and advocate for that, but I’m not sure that approach is more effective then letting people come to these conclusions on their own. Could have pointed out that my friend Mr Schumacher had deep connections to Boeing, but that’s more innuendo than hard fact about how that may have influenced the deal with Boeing. Not sure it would have been much different without Schu.
      In any event, I take your criticism seriously and will think about where to go from here. I hope you continue to read. Best. Irv

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  2. Kurt Lightfoot

    Irv, in answer to your email to my personal email address. [I use Yahoo.mail for blogs and newsletters, but not for personal mail, so please don’t save/use this address for personal or professional emails.]

    This is what it looks like when I use the “Respond to this post by replying above this line”, using the “Reply” function in Yahoo.mail.

    If I reply to one of your blogs I usually use the “Comment” button at the bottom of your blog.

    Hope this feedback helps.

    Kurt

    ________________________________

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