Will Washington State lose the 787 production?
With Boeing’s purchase of the Vought Aircraft Industries plant in South Carolina has started speculation and posturing that Boeing may put the second production line for the 787 Dreamliner somewhere other than Everett, WA.
Boeing purchased the plant primarily to solve problems they are having with getting the 787 manufacturing problems solved, but it would be an obvious move to consider manufacturing the whole plane there as well.
Aerospace analyst Scott Hamilton with Leeham Co., said Boeing is considering four possible locations: Everett, Wash., where the plane is assembled now; Charleston, S.C., where the rear fuselage sections are built; San Antonio, Texas; and Long Beach, Calif., where Boeing makes the C-17 military transport jet.
To the chagrin of Washington state, South Carolina looks to be winning the unofficial contest so far. Its governor Mark Sanford said Boeing’s purchase of Vought — a deal that includes $580 million in cash and $422 million in forgiveness of previous cash advances — is a testament to his state’s friendly business climate.
Hamilton says all the potential sites are viable but Charleston is the logical favorite, despite having a work force that would require more training. Its union membership is younger and less militant than Boeing’s main Machinists union.
“It all comes down to one thing: cost,” Hamilton said. “Cost of a strike delay, cost of disruption from strikes, productivity from unions…. If Boeing can’t get labor stability, they will look elsewhere. A corporation is going to use the tools it has on hand to get what it wants from labor or the state. That’s just the way the world works.” – MSN
With the costs to build a new plant being minor compared to the tax advantages and labor stability that would be possible by moving a second production plant outside of Washington, our population should really consider if our government and business climate is really moving in the direction people want. Even with huge tax breaks that were given to Boeing for the 787, our business climate is still apparently not competitive with other states.
Growth management has created high costs for real estate in Washington. With a less robust employment market, and the migration of large employers like Boeing (can Microsoft be far behind?) out of state, we could be in for some slow times in Washington State. But, we’ve gotten the government that has been voted for, so the public will have to change their minds on priorities before we see change.
Yesterday, there was an Associated Press article about states and local governments dumping impact fees during the recession. They’re finding impact fees are a big deterrent to construction, which is an industry that is one of the country’s largest employers.
Average 2008 fees were $1,520 in Texas; California’s average was $19,536, up 38 percent from 2004 excluding sewer and water fees, according to a 185-city survey by Duncan Associates, an Austin, Texas-based planning consultancy.
The trend to suspend or lower fees has prompted debate over whether spurring a construction resurgence is more important than forcing new businesses or residents to pay upfront for services, or if these communities are laying the groundwork for haphazard development and higher taxes for current residents. – Associated Press
According to www.impactfees.com the increase in impact fees in Washington State, on average, from 2004 to 2008 was a whopping 63%. Is the the change you were hoping for?
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I sure hope Washington doesn’t lose the 787. In this economy Washington doesn’t need to be losing more jobs.