787 Line 2 incentives: WA vs SC
Some media and a few politicians misinterpreted the study released yesterday by Washington State, as well as not having correct what South Carolina is or isn’t doing, to land production Line 2 for the 787.
The misinterpretation comes from headlines and conclusions that Washington “won’t” offer new incentives to Boeing to win Line 2. First, this ignores that new Boeing Commercial Aircraft CEO Jim Albaugh told Gov. Christine Gregoire that Boeing isn’t asking anything of the State–that the decision comes down to what accord might be reached with the IAM to remove the threat of future strikes.
(Boeing’s response to the study also overlooked the fact that Albaugh said the company wasn’t asking for anything.)
Second, the Washington State Legislature is not in session until January. This means the governor can’t offer incentives unless she were to call a special session–but what is the point if Boeing’s Albaugh says the issue is not between the State and Boeing but between Boeing and the union?
With this being the case, what was the governor to do? Since Albaugh is new to BCA and new to Washington (he was CEO of Boeing’s defense unit is St. Louis, MO) it makes sense to give him a report about Washington’s business climate vs. South Carolina, which is competing for Line 2. For Albaugh, this will all be new information. Who knows if when the time comes for a decision and some kind of agreement is reached with the IAM whether the decision might be so close that a better understanding of the business climate for Albaugh’s recommendation might or might not make the difference?
As for what South Carolina is or is not offering, media here picked up on a story written by media there quoting a legislator as saying the state is offering Boeing a deal it can’t refuse. Naturally we were curious, so we called the reporter who wrote the story and asked for details–there weren’t any in the story.
It turns out the legislator may have been talking to hear himself talk. The South Carolina Legislature, like Washington, is adjourned until January and the State can’t offer anything new until then–just like Washington. Boeing can only benefit from previously granted concessions, just like Washington, and doesn’t have anything new to consider, according to our discussion with the reporter.
Finally, we have this thought on the whole union issue. Yes, the IAM local in Charleston voted to decertify. But if Boeing puts Line 2 there, the IAM (or any other union) will be back in a year (the minimum time until a new effort is permitted) to try and reorganize the workers. No union is going to let any facility like this of any company like Boeing go forward without attempting to organize. The odds may be against it–look at all the failed attempts at organizing Delta Air Lines employees in Georgia, for example–but to assume there will never be a union at Charleston is a reach. “Never” is a long time.