Boeing is shopping for a location, threatening to leave Washington and take with it more than 80,000 jobs. Parallels are being drawn to Detroit, of course, and the “death spiral” that followed the automobile industry’s departure from that city. Alas, in both good times and bad companies are able to get localities to engage in a bidding war for the economic activity, and Boeing is responding directly to the machinist union’s unwillingness to grant heavy concessions.
Where the company will assemble its next generation of commercial airplane, the 777X — which only a few months ago looked locked-down certain to be right here — is now up for grabs, with a national scramble of states and cities bidding for Boeing’s hand with tax breaks, incentives and promises of labor congeniality.
Boeing had conditions from the beginning on the 777X: big incentives from the State of Washington and big givebacks by its largest union here, the International Association of Machinists and Aerospace Workers. The state came through, delivering in a special session of the Legislature a package worth $8.7 billion through 2040. But union members balked, voting down last month a contract extension that would have frozen their pensions. So Boeing began sending out requests for proposals to more than a dozen states and cities around the nation.
Corporate shopping for the best deal, the lowest taxes and the sweetest incentives is a multibillion-dollar enterprise in America — often with outcomes that do not fully materialize or cannot be accurately measured even for the winning contenders. An investigation by The New York Times last year found that more than $80 billion a year in incentives are given by states, cities and counties to companies that often pit local officials against one another to get the most lucrative packages.
via Possible Boeing Move Worries Washington State – NYTimes.com.