July 9, 2009 in Opinion

Boeing may be tempted to fly away for good

 

Boeing’s Dreamliner is causing nightmares in Washington state.

Boeing’s $1 billion purchase of the 787 supplier Vought Aircraft Industries in Charleston, S.C., is sure to trigger more sleepless nights for the state’s political leaders and the thousands of workers affiliated directly or indirectly with the airplane builder. And just as news of that deal broke, the congressional delegation is reporting that Boeing may open a second production line outside the state if it cannot reach a no-strike agreement with the International Association of Machinists and Aerospace Workers by fall.

Those two events may not be related, because the Vought purchase was caused more by that company’s shortcomings. Production delays left it with little income, and investors were unwilling to put up more capital. So Boeing bought the company to ensure that fuselage production would continue.

But the purchase gives Boeing a 240-acre campus on the East Coast, heightening fears that it will follow through on its ultimatum. The Machinists union has struck the company four times over the past 20 years, most recently for two months last fall, which cost Boeing an estimated $6.5 billion in revenues. This is serious business for the state, and the benefits reach beyond the Puget Sound area. Important Spokane-area businesses such as Kaiser Aluminum, Triumph Composite Systems Inc. and Goodrich Corp. have direct stakes in the outcome.

A $3.2 billion tax break package approved by the Legislature in 2003 helped the state land the current Dreamliner production line. But Boeing has made it clear that the key to grabbing the second line is an assurance that the Machinists union won’t strike. The Dreamliner is already way behind schedule. That’s frustrating to political leaders. In the near term, business climate issues, which government can affect, are a secondary concern for Boeing.

With each passing year, the old argument about the state having the most skilled work force erodes. Deloitte Consulting reported in the spring that other states are making significant educational and training efforts to narrow the skills gap. If the union insists on standing pat, it may see assembly jobs sent out of state. By the same token, Boeing cannot expect workers to give up their strongest tool for leverage without gaining some reciprocal assurances.

A lot is riding on whether the two sides can work out a reasonable compromise, but it would be a mistake to think that Boeing is bluffing. In recent years, it has demonstrated that it is willing to make bold decisions. The state’s chief advantage is a skilled labor force with a tradition of high quality work, but that asset quickly loses value if workers don’t show up.

A stubborn refusal to recognize the intense competition for aerospace jobs could result in the state’s playing the loser’s game of “what if.”

As workers in Michigan and other longtime industrial states can attest, that’s no fun for anyone.


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