Thursday, November 7, 2013
Present and future passengers of Boeing’s commercial jetliners should take comfort knowing that if the company is half as good at building planes as it is at playing politicians they are very safe.
Not that Boeing doesn’t have a reputation for quality and safety. But those technical skills are nothing compared with the way its leaders have scored benefits from states and nations both. Now, the Chicago-based company has extended that skill to wringing concessions out of its biggest and baddest union as well — District 751 of the International Association of Machinists.
As troubling as it is to watch — and pay for — it is also impressive how the jet maker has not just won tax breaks and policy changes, but has done so time and time again. Tuesday it announced a new deal with the Machinists that traded pension and health care concessions for a pledge to build an updated jet and its advanced carbon-fiber wings not in South Carolina but in Washington. Then, within hours, company brass watched Gov. Jay Inslee call an immediate special session to sweeten already sweet tax incentives.
Inslee also said legislators needed to quickly support increased state spending on training plus adopt a dime-a-gallon gas tax increase. Oh, and they needed to do it in a week’s time.
It was all so familiar. Just over 10 years ago, a different governor stood in a nearby room to announce his support for tax incentives plus investments in training and infrastructure to keep Boeing from moving production of a different jetliner to an as-yet-undetermined state.
That time it was Gary Locke, this time it was Inslee. That time it was what would eventually be designated the 787, this time it is a new edition of the 777. That time the deal was valued at $3.2 billion in tax breaks, this time it is $8.7 billion. But each time the concessions were said to assure that Washington would continue to be a global center of aerospace innovation.
Why do it twice? In between, Boeing demonstrated that what Locke thought was a deal to keep the 787 in Puget Sound wasn’t what he or others expected. In 2009 Boeing built a second 787 assembly line in South Carolina. So apparently the deal with Locke to build the 787 in Everett didn’t mean they intended to build all of them in Everett.
The existence of the South Carolina plant, and the eagerness of Palmetto State officials and workers to out-concede any other state, allowed Boeing to return with its hand out again and again. In 2011 it won other concessions from the Machinists, including a pledge to drop a pesky unfair labor practice charge in return for a promise to keep the 737 assembly in Renton.
And now, again with South Carolina as a club, the company’s brass is on the verge of winning more concessions from the union and the state to keep 777 production in Washington.
But here’s what makes this latest victory even more amazing — according to the pending deal with the union, production stays here if the union members ratify it even if the Legislature does nothing.
The letter of understanding says that if union rank and file ratify by Nov. 13, “the company agrees to locate the 777X wing fabrication and assembly, and the final assembly of the 777X in Puget Sound.”
So why did Inslee say the state must act as well? A frantic governor’s office Wednesday said that was how Boeing described its demands to the governor. A letter from the president of Boeing’s commercial airplane division, Ray Conner, solicited by Inslee, claims that both union and state action are needed to seal the deal. But that contradicts the binding contract language – something he can’t do unilaterally.
I find it tough to believe that Boeing misstepped, given its past skills. That leaves two other scenarios: Either Inslee was fooled into thinking legislative action was required or he decided to exploit this opportunity to win a transportation plan. Either way, Boeing stands to win even more than it demanded.