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<< Previous   of   Next >>   ADVERTISEMENT   Related Stories • Learn to manage virtual teams 11/25/09 • Holiday party presented by the Greater Marysville Tulalip Chamber of Commerce 11/25/09 • Master Builder's Association's Centennial Gala 11/25/09 • Snohomish County shifts Olympics marketing pitch to lure Canadians fleeing the Games 11/25/09 • Business book recommendation: "Take the Cold Out of Cold Calling" 11/25/09 • Business tip from Mike Wetzel, Chet's Cabinets 11/25/09 » More BIZINSIDER stories >   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Monday, November 2, 2009 South Carolina fit Boeing's long-term plan to cut costs By Mike Benbow, Herald Columnist On the wall above my desk is a framed copy of the Dec. 17, 2003, front page of The Herald with a huge headline proclaiming EVERETT WINS! It was our coverage of the day that the Boeing Co., after receiving $3.2 billion in tax incentives from the state of Washington, picked Everett to assemble its first new jet in a decade, then called the 7E7. After Boeing on Wednesday chose its newly purchased facility in North Charleston, S.C., over Everett for a second 787 line, some newsroom wag printed out the word LOSES in big type and taped it over WINS on my framed front page. I'm leaving it up, at least for a while. It's a reminder that sometimes you win and sometimes you lose and that either way, you can never rest on your laurels. Whenever an event happens like Everett's loss, people are quick to place blame. And there's certainly been a lot of finger-pointing going on in Washington state these days. Republicans lawmakers blame the Democrats in the Legislature and the governor, also a Democrat. The state isn't competitive, they say. We're not doing enough. Others blame the Machinists union, which was in talks with company officials aimed at convincing Boeing that they could get the production assurances they needed. I've also heard a lot of talk about how Boeing will add more political clout for itself by sending more work down South. Everybody has a theory. My idea is a little more simple. I think all that the workers in South Carolina had to do was scrap their union and agree to do the job for $14 an hour, and they had a done deal. Boeing wanted to go to South Carolina. It didn't need a lot of convincing. And South Carolina offered quite a bit, since the union workers in Everett make an average wage of about $28 an hour. Union officials point out that the people making $14 an hour don't offer the skills that their members do, and I'm sure that's the truth. But they can learn those skills. And I believe that they fit Boeing's long-term plan. What's that? I believe Boeing wants to make good jets in a variety of locations around the world using simple, low-cost procedures that to the largest extent possible take skilled workers out of the equation. The company isn't handing out copies of this plan or even admitting to it, but I think it doesn't take a brainiac to figure it out. All you have to do is to look at what Boeing, and for that matter most major corporations, have been doing in recent years. They're all looking for locations around the world that can make them a low-cost producer — if not the lowest-cost producer — of their product. Boeing's first move was to shift its corporate headquarters from Seattle to Chicago, separating it from its production center for commercial aircraft and most of its workers. Then it started increasing the number of parts made in different locations around the world. Then it developed a new plane, the 787, that didn't need so many assemblers. Instead of aluminum segments fastened with rivets, the 787 uses composite materials so that whole sections of the plane could be assembled virtually anywhere by snapping them together like Legos. Then Boeing bought a factory in an area of the country where unions aren't strong, so it that it can start snapping its planes together without having to worry about work stoppages. This isn't some sinister plan, as some people suggest. Whether we like it or not, it's the way capitalism works. As some people like to say, especially at times when they've done something that really tees you off, “It's just business.” What we're seeing at work here is really just the beginning. We didn't lose the second line because a politician made the wrong choice. We lost it because it's part of Boeing's long-term plan. That's not to say that we can't slow down the loss of our aerospace business and even add new business to the region. But there will be a cost for that, either in tax incentives, training, making the area more livable or in union agreements that lower the company's overall expenses. Forget the $3.2 billion we committed in 2003. It's gone. Boeing's next decision will be made based on what we're offering now. Don't blame the Machinists or the politicians or even Boeing itself. As a region, it's up for us to decide how important our aerospace jobs are and what we're willing to do today to keep them here. If it's not enough, Boeing will continue on the plan and go elsewhere. As much as it tees us off, it's just business. Mike Benbow: 425-339-3459; benbow@heraldnet.com. READER COMMENTS Log in or register to post new comment | Log out shareholders It's time as share holders, which most of us in WA are, to request the Board of Directors to oust McNerny, and kight. There is no trust in the management of the Boeing company, they have lied to many times to, to many people. Why would Boeing get a government contract with the way they are acting. Bs'ing the union as well as South Carolina. Typical white collar greedy crooks. !! Mark Davis | Nov 2, 2009 11:50 am | 0 replies | View all | Post reply | Request removal (No heading) "I believe Boeing wants to make good jets in a variety of locations around the world using simple, low-cost procedures that to the largest extent possible take skilled workers out of the equation." You can build a Cessna Skyhawk or DC3 with simple, low cost procedures. You cannot build a cuting edge, State of the Art FAA-certified jet liner with simple procedures. As proof, notice the 2.5+ year delay with many partner companies using inexperienced, insufficiently trained workers. "Instead of aluminum segments fastened with rivets, the 787 uses composite materials so that whole sections of the plane could be assembled virtually anywhere by snapping them together like Legos." Aluminum is easier and more forgiving to assembling than graphite. Anyone can do basic aluminum stuff in their garage. Graphite requires expensive tooling and exactingly detailed procedures, with a high scrap rate. This whole "snapping together" fantasy is a concoction of talented PR wonks who have never handled a screwdriver in their lives. chris manzuk | Nov 2, 2009 9:19 pm | 0 replies | View all | Post reply | Request removal (No heading) I believe that once the workers in SC are given the opportunity to see the inheritant dangers, exposures and long hours they will be subjected to, they will be rushing to reexamine the need for union protections. They have managed to lay blame everywhere except the one place they should have, on Jim McNErney's shoulders. He should have been shed long ago-but once again, it boils down to cheap. And when SC becomes too "unfriendly", the next move will be outside the country. Shameful. CC At the Big B | Nov 2, 2009 6:44 am | 1 replies | View all | Post reply | Request removal Showing what you all don't know While I can understand the feeling of betrayal many in your area feel towards Boeing, I am still amazed at the apparent lack of understanding in the Great Northwest about the South. To say, as a journalist, that I was appalled at the attempt of humor or a put down a supposed reporter made by saying things like identifying aircraft by Confederate mud flaps on the landing gear is an understatement. Let the stereotypes continue I suppose. But what you do not understand is that the workers in South Carolina- there will be people that move in and there are highly skilled people in the area, but most of you have never been there before to know it- will work just as hard without a union as your good people do with one for less. We have been doing it for years. Our region, for the most part, has witnessed politicians sell the care and well-being of our workers to enable companies like Boeing to locate here for more than 100 years. Our costs of living are much lower than yours and so are many of our salaries. In right to work states, the power rests with the company. The few people who have worked with union representation in the South where the union president was a retiree of the company or something like that and provided little representation for the workers walk away with very bad tests in their mouths. Republican politicians set on breaking unions will only continue to do whatever they can to keep the status quo for their big corporation friends. Sadly, one of the South's traditions is people being manipulated by politicians to vote against their own best interest. You face an uphill battle in today's economy and political environment to protect your industry. Too many people who have never enjoyed the protection of a union seem to be against them, and the fervor over the bail-outs further complicates the issue. I wish you well as you grapple with these complicated facts of life. Charla Parton | Nov 2, 2009 9:17 am | 0 replies | View all | Post reply | Request removal

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