Boeing slammed for moving jobs to Southern California, WA state for naivete

Boeing took two hits over the weekend from Seattle Times columnists for the announcement that 1,000 engineering jobs will move from the Puget Sound area to Southern California.

Columnist Danny Westneat interviewed a “lonely, ignored voice” who predicted Boeing would go ahead and move jobs despite the $8.7bn tax breaks proposed by Gov. Jay Inslee that were then before the Legislature in hearings prior to approval. (SPEEA Executive Director Ray Goforth also warned of the loopholes in the proposed legislation, but he was ignored, too.) Washington State was criticized for being snookered on jobs once again.

Satirist Ron Judd also took Boeing to task in his Sunday column.

We got our knuckles rapped by a state official because we opined our coverage that the “state” tends to sit back and relax after wins.The state official wrote:

I was disappointed to read your blog post…related to the Boeing engineering relocation. I just don’t see how you can say the State as “sat back and relaxed” after recent wins and is doing nothing to diversify the aerospace industry in Washington.

  • After the 737 MAX decision, the Washington Aerospace Partnership incorporated and is helping to fund the Office of Aerospace specifically to develop and execute a long term strategy to protect and grow aerospace jobs.
  • Since then, we developed said strategy with broad statewide support and are having great success in executing (see attached).
  • We developed an advanced strategy and were prepared for the 777X opportunity and we won
  • We have established the Washington State Space Consortium, a group of companies and other interests working in the space sector
  • We pursued, albeit unsuccessfully, designation as a FAA test site for Unmanned Systems, and are continuing to look at additional opportunities to coalesce and grow the UAS subsector
  • We pursued and won designation for WSU the FAA Center of Excellence for Alternative Jet Fuels and the environment.
  • Finally, we have had many conversations with Airbus, as well as other commercial airplane OEMs, about the possibility of investment in Washington.

The official has a point: we weren’t specific enough in our labeling of who the “officials” we were thinking of: the legislators. The executive branch and the Department of Commerce, to the extent possible within past budget constraints, have been active. But the Legislature is reactive rather than proactive and forward-thinking, and that’s who we were thinking of. Legislators are remarkably uncreative when it comes to aerospace.

On two occasions, State Sen. Mike Hewitt, an undistinguished Republican, publicly took Inslee and the aerospace director, Alex Pietsch, to task over efforts to support Boeing and Washington aerospace. Each time, we blasted Hewitt and the Republicans for carping and offering no program in return. See here, here and here. The Washington State Republicans are content to sit on the sidelines and be the Party of No or the Party of Critics rather than join together for the Greater Good in Aerospace. The Democrats in the Legislature are largely complacent on this issue.

Neither party has come forward with a series of proposals to grow Washington Aerospace. Instead, the legislation proposed tends to continue a long, long focus on workman’s compensation, labor and industry issues, right-to-work and more recently fish.

We recently were asked to present to the president of one of Washington’s community colleges and some of its trustees to outline what this college could be doing to improve its aerospace program. Aside from the fact that this indicates a lack of state direction, one of the things we learned was that there remains territorial jealousies that prevent this college from marketing its programs across the boundaries of other community colleges in the state, even if another college doesn’t offer training this college does. It’s incredible.

We’ve written several times about aerospace plans that could be pursued.

  • We need to establish a “Washington Institute of Aerospace” that is dedicated solely to aerospace education and training statewide. Right now, training is scattered among universities and community colleges that have these territorial disputes. More to the point, any aerospace programs within the universities and community colleges have to compete for funding, talent and space with other disciplines. The result is that Washington can’t meet the demand. The Los Angeles Times told us one reason given by Boeing for moving engineers to Long Beach is because it gives them access to universities’ aerospace programs in California.
  • Washington has a prime opportunity to support the Unmanned Aerial Vehicle industry, of which Boeing’s subsidiary Insitu is headquartered in Bingen in south-central Washington. UAVs have obvious law enforcement uses but also a broad range of civilian uses. Undoubtedly our readers are aware of the awful landslide in the tiny town of Oso that covered a square mile (the size of Chicago’s Midway Airport), killing a confirmed 36 with more still missing. UAVs are an inexpensive way to inspect sensitive areas. UAVs have been used by law enforcement to watch kidnappers in hostage situations. Are there civil liberty and air safety issues to consider? Of course. But what did our Legislature do? It passed a ridiculous UAV law restricting police use that was so bad that Gov. Inslee vetoed it.
  • We need to create some mechanism to provide incentives to business to create an engineering company, using all that talent Boeing has laid off, that could in-source global engineering work.
  • We could create global pilot and maintenance training schools. Boeing identifies a requirement for tens of thousands of these jobs over the next 20 years. The emerging market airlines have to send their citizens out of their countries to train because they don’t have enough resources. There is no reason why Washington can’t become a world-class training center.
  • We need to have a constitutional amendment (or even a constitutional convention) to examine the restrictions in our state constitution that put us at a disadvantage to states in the South that have more flexibility in providing corporate incentives. (If this seems contradictory to our long-held opposition to corporate welfare, it is. But as long as other states do this, Washington needs to in order to compete.) Politicians won’t even have this conversation.
  • We need to have comprehensive tax reform. We have corporate tax incentives dating back almost 100 years. Things change. But Republicans won’t consider eliminating tax breaks that no longer serve a useful purpose because of their mantra against raising taxes. Grove Norquist strikes again.
  • The Washington Aerospace Partnership needs to be reconstituted to include industry representation. Right now, it’s dominated by economic development commissions and their equivalents (who have their own territorial turfs to protect), the unions and state bureaucracy. Not one representative from industry (not even Boeing) is on the WAP. This is deplorable.

We also received an email from an engineer who said we “missed the point” about Boeing’s move: this was all about tearing down the SPEEA engineers union. We wrote back that we didn’t miss anything. We knew exactly what was going on, but we’ve written so often about Boeing Chicago’s war on unions that we saw no point in repeating this same old song. Instead, we wrote that one element that undoubtedly went into the decision was to beef up a declining Long Beach operation and Boeing’s drive to make Commercial Aviation Services a greater contributor as a profit center.

8 Comments on “Boeing slammed for moving jobs to Southern California, WA state for naivete

  1. If you were a long term Boeing investor, would you encourage Boeing concentrating all knowledge, funding and programs in one state / location, letting die existing (7 CA sites?) ones? Boeing took a lot of decisions I didn’t understand & proved wrong, but I can understand this one.

    • I agree with you on the reasonableness of moving some jobs to SoCal. It keeps a rich base viable and it’s not like Washington is losing an entire production line after Boeing got the economic benefits.

  2. The legislature needs to immediately amend the Boeing subsidy bill. Every other state that offers such subsidies (INCLUDING SOUTH CAROLINA) requires Boeing to hit certain employment targets in order to get the money. Governor Inslee adopted a different approach (at Boeing’s insistence) that merely required Boeing to build a factory in order to get the money. Now we find out that the company intends to run that factory largely with robots (bye bye IAM jobs) AND Boeing intends to outsource thousands of engineering jobs to Moscow and other states within the United States.

    The Boeing subsidies should be anchored to employment (subsidies are cut for every job that doesn’t materialize). There are even more engineering cuts coming (still unannounced). Inslee and the legislature had better stop the bleeding now or they’ll be explaining to voters why they paid Boeing to hollow out Washington’s middle class.

  3. What the State needs to do is to make Boeing accountable for the benefits received.

    But may be that would require something that nobody seems to have, courage …

  4. I think this is an over reaction to a redeployment of resources to a location that has underutilized facilities and a rich pool of engineering talent. Not everyone will transfer and many will find new assignments in Everett.

    The new 777x production line will bring an enormous number of jobs to Washington…minimizing the effect of the relocation and benefiting the State of Washington and SPEEA. If Boeing follows through on its desire to create a world class center for Composite engineering, this alone would contribute to an important source of future employment and research. ( Perhaps including research and applications for Graphene and other new materials)

    Boeing is entitled to reorganize and redeploy. The utilization of facilities and access to a source of engineering talent is part of future planning and efficient use of resources.

    These discussions always lead to claims of unfair labor practices, distorted salary structure and predatory Corporate behaviour. I believe this mantra distorts the truth and never gets to the real issues of competitiveness and comparative compensation of the industry.

    • I suspect that any entity might opt to surrender a good deal of entitled flexibility in exchange for $9B, but why bother when your situation perpetually allows you to reap billions from the government at the cost of only millions in “lobbying” expenses.

  5. Scott: What you are saying is that rather than fight evil you will take evils line and no longer challenge the evil and the lies it tells.

    There is a big difference between advocating for polices that you feel are going to make you competitive and accepting the “you tell a lie often enough it becomes the truth”

    Equally its fair to report and support contention on polices that are not competitive (not necessarily the same thing)

    We should never stop calling a liar a liar, nor should we accept the evil

    You may think evil is the wrong term, but when you pay no taxes which deprives the country of that revenue that is due putting the citizens into deeper and deeper cycles of poverty , that is indeed evil. There is no morality in that juggernaut.

    And with all the tax breaks, where does the money come form to pay for all of that?

    Do we let people starve (yes I remember Appalachia in the 60s) and children lack for medical to pump up a corporation. The end game is just that.

    Francis can take the moral high ground, he needs legions to help him change this, not accept it (and not I am not Catholic but I at least hear a voice that cares that was part of that system at one time and was forced to take a deep hard look in his heart and has brought a breath of fresh air not just to the Catholic Church but the word).

  6. And I note the follow up report that the morale is plummeted to lower depths, people are taking jobs with other companies, good people are leaving.

    You are terminated and have to apply for the “new” job at a lower salary.

    I would call it dismantling. Nothing to do with business, all to do with not just greed, but nihilistic. Amazing.

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