Boeing’s new 777X is soon to launch …somewhere.
OLYMPIA, July 28.—Another announcement by the Boeing Co. that it will be shifting jobs out of state has some lawmakers sounding the alarm that something better change, and fast – or the next announcement may involve a departure at Gate 777.
Members of the Senate Majority Caucus say this week’s announcement that 375 Everett and Bellevue engineering jobs will be shifted to Long Beach, Calif. ought to be taken as a wake-up call. It is the second such announcement in as many months – in May some 300 Tukwila jobs headed south. The senators say the Legislature and the governor paid scant attention to the aircraft manufacturer’s priorities this session, and as Boeing prepares to make production decisions for its new airliner, the 777X, the state may need to steel itself for the worst.
“Under Gov. Locke, we lost Boeing’s corporate headquarters,” said state Sen. Mike Hewitt, R-Walla Walla. “Then came Gov. Gregoire and the loss of thousands of production jobs to South Carolina. What’s Gov. Inslee’s legacy going to be on Boeing? Granted, it’s early in his tenure, but at this point it looks like he is picking up where his predecessors left off.”
It is a political argument, to be sure – the largely Republican Majority Caucus is pointing the finger at a Democratic governor and a Democratic majority in the House. Yet it is an argument based in reality. One of the least-known stories of the just-finished legislative session is that Boeing approached the Legislature with four big-picture goals. Two of them clearly were shot down by the governor’s office and the House Democratic caucus. Boeing wanted further reform to worker compensation rules and a more science-based approach to stringent new water-quality regulations. A third, a transportation package, failed for reasons that are a matter of dispute, but which might reasonably be attributed to a failure of political leadership. Some success may have been scored on the last point, education – lawmakers last session demonstrated support for state-supported science, technology, engineering and math programs. One out of four? Not such an impressive record.
Worried About Airliner
At Everett’s Paine Field in May, Gov. Jay Inslee outlines what he calls a comprehensive strategy to keep Boeing in the state of Washington. Behind him are Senate Majority Leader Rodney Tom, D-Medina, former King County executive Bob Drewel, King County Executive Dow Constantine and Lt. Gov. Brad Owen.
Certainly things are different today than decades ago, when the homegrown aircraft manufacturer was said to dominate the Legislature in a way no other company could. Boeing’s power was such that rarely did its representatives have to speak publicly, its lobbyists worked behind closed doors in the Legislature’s corner offices, and to observers in the press and anyone beyond the lines of power it seemed the company communicated mainly in winks and nods. Back in the ‘80s, when former state Sen. Ken Jacobsen, D-Seattle, and county lobbyist Jim Metcalf compiled their set of whimsical “rules” for the Legislature, they observed, “if your bill dies for no discernible reason, Boeing is against it.”
Such was the deference accorded what was then the state’s largest company. For all the grousing it sometimes caused, one had to admit that Boeing was the single biggest engine of the state economy and when it hiccupped the state economy woke up with a stomachache. The company’s decision to send a portion of 787 Dreamliner production to a new South Carolina factory came as a blow in 2009 – to this day lawmakers debate the blame the way the postwar Congress debated “who lost China?” Was it a new corporate leadership that had little connection with the state? Was it a matter of the tax incentives South Carolina was willing to offer? Was it political resistance from the Legislature to reforms aimed at improving the Washington business climate? Was it costly union contracts? Was it Gov. Gregoire’s symbolic decision to join the Machinists Union picket line during a 2008 strike, a move now regarded by many as a legendary blunder?
Whatever the reason, leaders of the largely Republican Senate majority coalition say the state has been taking Boeing for granted, and they are growing increasingly worried about that 777 announcement, due sometime in the next six months. In comments Thursday evening after Boeing announced the new shift to Long Beach, Senate Republican Leader Mark Schoesler said, “Boeing’s leaders have made it increasingly clear that if our state’s business climate doesn’t improve we can expect more headlines of this type. Between that and the other clues we have seen lately, I’ve got to believe Boeing has concluded it will run into fewer labor disputes in California. One would hope the governor knows the reason behind today’s disappointing news – if it isn’t related to labor contracts, and has to do instead with something the Legislature can address, he should convey that to those of us who are in a position to respond.”
Knocking on Aluminum
Don’t read too much into those latest announcements, says the governor’s office. Inslee is doing everything he can to keep Boeing in the state. He has lent his support to regional aerospace-industry lobbying efforts and has directed the Department of Commerce to find ways to expedite permitting for new manufacturing facilities. On Thursday, even as Boeing was announcing that aftermarket engineering work for jet modification would move to Long Beach, the governor was visiting Everett’s Paine Field to help promote an $8 million Snohomish County plan to prepare a possible industrial site at the airport. The site might be used to produce a composite wing for the 777X. During his visit to Everett, the governor told The Herald he has no clue about Boeing’s ultimate production decision: “They’re pretty good at keeping things under wraps,” he said.
Big question is whether the governor and Legislature can do anything to influence the outcome. Communications director David Postman observes, “Boeing doesn’t come to us and say, ‘Here are the things we want, and if you achieve those, we will build the triple-7X in your state.’ That’s not the way it works. It didn’t work that way with the Dreamliner or the 737 Max. The governor is working hard to do the things that we hear and believe are necessary, and at the same time do what we can to maintain the workforce as much as possible. But we are also award of the cyclical nature of aerospace employment, and we are also aware of the competition. We are sorry every time a Washington-state job goes away, but we are far, far ahead of any other place like South Carolina in terms of people building these airplanes. That is done here more than anyplace else, and we think that is going to continue.”
What About That Agenda?
Thing is, if the governor and the Legislature are interested in keeping Boeing here, they didn’t envince much interest in the company’s agenda last session. The two most important items appear to have been shot down by plain old power politics. Boeing’s top priority was a study of fish-consumption patterns, a central issue in a state effort to draft new water quality regulations. Under pressure from Indian tribes, the state is contemplating the adoption of an estimate of human fish consumption that would require the nation’s most stringent standards for industrial and municipal discharges. Big thing is that the standards would be beyond the capabilities of current technology; compliance is likely to cost billions, yet the scientific case has big gaps. Boeing convinced the Senate to include a study in the budget, but Inslee’s office balked when lawmakers demanded veto-proof language. So rulemaking will proceed without a scientific look at the underpinnings of the policy, and it appears the interests of tribes and a green-leaning governor carried the day.
Workers’ comp, meanwhile, is one of those lines-in-the-sand issues for labor. And so an expansion of a limited and somewhat unsuccessful settlement program launched by the 2011 Legislature hit a brick wall in the Democrat-controlled House. There was nothing quiet about it — Inslee publicly declared his opposition and let the Legislature know he would veto the bill if it crossed his desk. He denounced the settlement program as an effort to reduce worker benefits, even though the program is voluntary programs and is offered in 44 other states.
Exactly what happened with transportation isn’t so clear-cut, though it does raise a question of leadership. The Senate balked at a proposal to raise gas taxes for road construction largely because it contained money for a Columbia River bridge at Vancouver that included a controversial light-rail crossing. The governor’s office insisted it be constructed as designed. Neither the Senate nor the governor’s office demonstrated much interest in backing down — and in fact, the governor gave bridge opponents an outstanding reason to oppose the package. In a strangely played all-or-nothing gambit that in retrospect appears baffling, the governor vetoed money that could have kept the bridge project alive for a redesign in case the tax package failed. That meant the inaction on the tax package killed the bridge. Probably the most important thing is that Inslee’s legislative Democrats showed no particular enthusiasm for the battle themselves. Instead of queing up the bill at the start of a special session in which lawmakers had little to do for a month and a half, the House delayed taking a vote on the measure until the 151st day of the 153-day session. That left no time at all to dicker with the Senate, unless lawmakers had been interested in meeting through the summer.
Meanwhile, the last priority, STEM programs in education, got the Legislature’s nod — but they are relatively non-controversial, a matter of funding priorities more than anything else.
Business Climate Key Concern
Senate Majority Leader Rodney Tom, D-Medina.
Exactly what bearing that agenda will have on Boeing’s siting decision is anyone’s guess. But the state’s business climate is a top concern for the company, acknowledges spokeswoman Susan Bradley.
“Those priorities shouldn’t be a surprise to anybody,” she said. “Boeing has consistently said with regard to legislative matters that the state’s competitiveness is really something that needs addressing, and we see the four things as not exclusive to that – there are certainly other issues that would come into play. But it really is all about the state improving its business climate as a nexus for aerospace and other high-tech business.”
As for the outcome, she said the company recognizes you win some and lose some, and sometimes it takes time. “That’s just the way the legislative game goes. And as for any implications about siting decisions, we reserve the right to reassess our business, which we do all the time. That includes issues such as geographic diversity and work placement, so I don’t think people should take [the latest announcement] as a sign that the company is abandoning the state of Washington. I think what they should see, and hopefully the takeaway, even though it might be uncomfortable, is that the Boeing Co. is doing what it takes to be competitive.”
Senate Majority Leader Rodney Tom, D-Medina, says it’s time to become very, very worried. “We have to be hungry for these Boeing jobs,” he said. “We have to do everything we can to signal that these jobs are wanted here in my community, Bellevue, and everywhere else in this state. That’s what other areas are doing and it’s what we need to be doing here in Washington.”
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