Washington Gov. Jay Inslee will announce today his plan to keep the Boeing 777X assembly here, at the Everett plant where the current 777 series is built.
Inslee previously has said the State needs to pass some additional gas taxes to improve the highway transportation infrastructure. We expect him to talk about this further.
Improving STEM (Science, Technology, Engineering and Math) education has been a goal of Inslee and before him Gov. Christine Gregoire, so we expect more of this.
Tax breaks will likely be a part of his plan. One tax in particular has to go: a 1.9% tax on goods being imported into the Port of Everett; South Carolina doesn’t have this (and, we will guess, neither does Alabama, but we don’t know if it does or doesn’t.)
More of the same.
Beyond these three general areas, we have no idea what Inslee will offer. But we know what is needed for Washington, and these are things that won’t happen.
- Washington’s State Constitution is more restrictive than that of other states when it comes to corporate largess. South Carolina, Texas and Alabama (to name three states) have more ability to provide grants and to build facilities for companies than does Washington. We need changes to the Constitution that will allow the State to be on more of an even footing with Southern states. Gov. Gregoire didn’t have the will to propose this. We would be stunned if Gov. Inslee were to do so. There certainly are policy and philosophical issues, and and proposals would be quite controversial, but the debate needs to happen. Constitutional amendments would have to pass the Legislature by super majorities and then go to the people for a vote. Given the partisan divide in the Legislature, we’d view prospects for changes to be dim. Contrast this to South Carolina, which has an open checkbook for Boeing. The various state and local governments ponied up a reported $1bn in concessions and incentives for Boeing to put 787 Line 2 there. The state just approved another $120m in incentives. You don’t think they’d do something similar for the 777X assembly line? Think again.
- Washington needs to become a Right to Work State. In 2008, when IAM 751 went on strike against Boeing, it boasted that Washington is the fourth most unionized state in the nation. Gregoire, running for re-election, appeared at a union rally (which made her real popular with Boeing [sarcasm]). Labor says Right to Work is Right to Earn Less. Maybe so (though we think that’s a highly parochial view), but the fact remains: Washington is at a competitive disadvantage to Southern States on this issue, and Boeing’s position is clear. It’s moving work out of Washington (and Kansas, another union state) to Southern Right to Work states. Labor needs to wake up. Boeing may not be able to move jobs in retaliation for labor actions, but there is nothing at all to say it can’t move jobs under other circumstances and it is doing exactly that. But a Democratic governor will never propose Washington become Right to Work and the Legislature will never approve it as long as Democrats control at least one of the two houses, which they do here. But it needs to happen.
- Like it or not, Workman’s Compensation and other State-mandated labor costs also need reform. Southern states once again are at an advantage. But as long as Labor holds captive the Governor’s Mansion (there hasn’t been a Republican governor here since the early 1980s) and the Legislature (also Democratic for at least one House for decades), reform will be next to impossible.
Long-time readers know our politics lean Democratic, but business is business and if Washington wants to keep Boeing’s business, these are things that have to be done.
We believe it would be silly for Boeing to assemble to 777X elsewhere. The tooling and skilled workforce are here. It would be costly to move the line to South Carolina.
“To build it elsewhere, “they’d have to move the entire production infrastructure and the cost would be just out of sight,” said the senior engineer, who asked for anonymity since he is not authorized to speak publicly,” wrote Dominic Gates in a May 1 article on the 777X. Well, maybe so. But remember South Carolina ponied up that $1bn for the 787 Line 2. We think they’d do it again. And Boeing is snarfing up hundreds of acres of land in Charleston. It’s not to preserve wetlands and trees, we can tell you that.
Gov. Inslee needs to be bold. He needs to be creative. He needs to be Nixon to China.
We’ll see later today.