When Boeing warns that something is wrong, people listen — or at least they should.
Our state’s largest manufacturer Boeing, with more than a century of history in Washington, employs more than 86,500 people and spends more than $4.6 billion a year with vendors and suppliers throughout the state.
When it comes to Washington’s business climate, Boeing is our canary in the coal mine. When it starts gasping for air, something is wrong.
Gov. Jay Inslee recognized that fact when he moved to convince Boeing to build its next-generation 777 in Washington. Inslee formed the 777X task force and called a special legislative session earlier this month to address Boeing’s concerns.
Four issues were identified, but when the special session ended, only worker training funding and tax incentives were addressed.
The unions took workers’ compensation off the table — even though the proposed changes are working in other states and actually help injured workers return to work.
Also unresolved is the Department of Ecology’s proposal for costly, burdensome water quality standards that will be literally impossible to meet because the technology required to comply doesn’t exist — and may not for decades. In the end, Inslee promised that Ecology would look into the matter. The governor also added transportation funding to the mix, but that is in limbo as well.
However, the linchpin to secure the new 777X assembly plant in Washington was a labor agreement between Boeing and the Machinists union. Boeing needs a long-term contract that includes changes to health care policies and pensions.
Even though a Seattle Machinist earns a reported $85,000 a year plus benefits, its 32,000 union Machinists voted overwhelmingly to reject the contract changes.
So where does that leave us? Boeing spokesman Doug Alder says, “Everything is back on the table.”
Following the union vote, Boeing started looking elsewhere for a place to build the 777X. At the top of that list is the Boeing facility in Long Beach, Calif., along with Utah, South Carolina, Texas, Alabama and Georgia.
Gov. Inslee hasn’t thrown in the towel yet, hoping that Boeing and the Machinists will get together again to reach a compromise. After all, the stakes are high. “This is the most significant prize in commercial aviation history,” notes Alex Pietsch, director of the state’s Office of Aerospace.
Whatever Boeing decides, it’s important to understand that the same factors pushing them out of the state are affecting all Washington employers. They are all feeling the bite of high costs, traffic congestion and stifling government regulations.
As a state, we cannot expect to attract jobs and employers when our workers’ compensation and unemployment insurance costs are among the highest in the nation. We cannot keep employers if our state’s environmental regulations are literally impossible to meet.
That fact is obvious to analysts and employers across the nation. Despite our educated workforce, good quality of living and diverse economy, the U.S. Chamber of Commerce in 2011 rated Washington as a poor environment for job growth because of our state’s heavy regulatory burden, restrictive work rules and high business costs
Following Boeing’s economic collapse in 1971, a now-infamous billboard read, “Will the last person leaving SEATTLE — Turn out the lights.” We’re not to that point, but Boeing is sending a clear message that things need to change.
It’s a sentiment echoed by other manufacturers and businesses that find themselves in a similar predicament.
If Washington doesn’t change, the next jumbo jet capitol of the world will be someplace other than Paine Field.
About the Author
Don Brunell is the president of the Association of Washington Business. Formed in 1904, the Association of Washington Business is Washington’s oldest and largest statewide business association, and includes more than 8,100 members representing 700,000 employees. AWB serves as both the state’s chamber of commerce and the manufacturing and technology association. While its membership includes major employers like Boeing, Microsoft and Weyerhaeuser, 90 percent of AWB members employ fewer than 100 people. More than half of AWB’s members employ fewer than 10. For more about AWB, visit www.awb.org.