Debate Magazine

Coincidental Timing of These Boeing Headlines?

By Eowyn @DrEowyn
Coincidental timing of these Boeing Headlines? WA ST Legislature goes after Boeing tax breaks Lawmakers are going after the billions of dollars' worth of tax incentives they gave Boeing to secure production of the 777X in Washington. They're trying to tie certain job and wage numbers to that incentive package.

If aerospace companies are going to receive generous tax incentives, they need to pay their employees more. That's the bottom line of a bill that had its first hearing on Monday. It would require any aerospace company getting a tax incentive to basically pay all their veteran employees about $20 an hour or what is considered the state's median wage.

Jon Holden is president of the local Machinists Union, IAM 751, which supports the bill, and he told the House Labor Committee, "The IAM strongly supports this tax incentive and the use of tax incentives to encourage employers to locate here and to create and maintain good aerospace jobs [...] We must ensure, though, that those taxpayer investments are being used for just that. "

While the bill is a direct shot at Boeing, it would have a much bigger impact on the hundreds of smaller aerospace companies that provide jobs in Boeing's supply chain, like Aeroplastics in Renton.

The bill also proposes front office workers and other non-skilled employees to make the same $20 an hour.
Coincidental timing of these Boeing Headlines?

Aeroplastics general manager Mike Brown said his company wouldn't be able to handle the new requirements. According to Brown, he couldn't get $20 an hour worth of productivity out of his newest hires. A lot of his workers are hired right out of trade school and Brown said they don't have the experience to be paid the rate proposed by the Legislature.

Another bill working its way around Olympia would tie actual job numbers to incentives. Lawmakers are upset that Boeing shipped more engineering jobs out of state after passing the incentive package.

In a statement, Boeing said it has added nearly 30,000 jobs in Washington since the incentives were created in 2003. The company called the bill harmful to Washington's economy.

New facilities setting the stage for an ongoing 'Boeing effect' in South Carolina

-------------------------------- Boeing Co.'s announcement in 2009 that it would build a Dreamliner factory in North Charleston is often called a game-changing event for this area's manufacturing sector. But it has proven to be just the starting point for what some analysts say will be an aerospace-based economic cluster that could rival what the company built in Washington State.

"Boeing South Carolina is not a one-trick pony," said Saj Ahmad, chief analyst for Strategic Aero Research. "Anyone that thinks they are only going to produce the 787 and not much else is very much mistaken."

On Wednesday, Boeing will officially open its newest facility here that will design and build engine inlets for the 737-MAX - a single-aisle airplane that will be 20 percent more fuel-efficient than any competitor. The first 737-MAX delivery is scheduled for 2017 and air carriers have ordered nearly 2,500 of the model, which will be built in Renton, Wash.

The 225,000-square-foot Propulsion South Carolina facility is in Palmetto Commerce Park in North Charleston near another Boeing plant that makes overhead cabins and interior parts for the Dreamliner. Its debut precedes another Boeing project in the works - an $82 million facility that will paint 787s for customers, scheduled to open in late 2016 on a small portion of 466 acres Boeing is leasing adjacent to its Dreamliner plant alongside Charleston International Airport.

It follows the opening last year of Boeing's research and technology center, which focuses on advanced manufacturing technology and composite fuselage manufacturing.

Boeing has not said what it plans to do with the rest of its acreage, but Ahmad said it signals a long-term plan much larger than the $1 billion, 7,500-job investment the company has already announced. "You could argue that with Boeing South Carolina, we're seeing Boeing replicate the investment and expansion we saw in Washington from the post-war era that finally brought us the 707 in the true jet age," he said. "Boeing South Carolina has a 50- to 75-year plan and the billions being invested there is just a fraction of the eventual showcase we'll see decades from now."

Richard Aboulafia, an aerospace analyst with The Teal Group, is less bullish about Boeing's long-term plans in the Charleston region, saying it took the better part of a century to build what Boeing has in Washington and that there are too many variables to safely predict what will happen in 20 to 30 years. Chief among those variables is labor and whether Boeing can find a suitable yet cost-efficient workforce to expand its production in South Carolina. Another factor could be leadership changes at the company that take Boeing in an entirely new direction.

The additional acreage does accomplish one important thing, Aboulafia said: It gives Boeing options when dealing with union workers in Washington state. "It puts the union on notice that they're going to think about moving new jobs," he said.

Coincidental timing of these Boeing Headlines?

Read the rest of the article here.


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