Boeing’s too focused on short term, author says

The Boeing Co. has been dropping giant-sized hints again that it might want to look elsewhere to build its next new jet. It’s not the first time that T. M. Sell, a professor at Highline College, has heard similar complaints from the company.

In his 2001 book “Wings of Power,” Sell wrote about the company’s expansion in the Northwest.

In this piece, Sell outlines why a move to the South (as observers have speculated that Boeing might do) would be bad for Boeing.

Aside from the unions, Boeing pretty much gets everything it asks for in Washington state where the tax system was pretty much built to Boeing’s specifications. After the 777 misadventure, few state or local officials are going to be so dumb as to not do whatever they can to keep Boeing happy. As for the South, these low-tax, non-union, pro-business states also are the states with the lowest quality of life scores, poorer school systems, and wide disparity of wealth. In the end, that formula doesn’t make for a truly good climate in which to do business.

Sell says Boeing has embraced a short-term mindset rather than planning for the long haul. The company, Sell writes, has abandoned the “old Boeing” model in favor of the GE model, “where you can build anything anywhere — and everything but short-term profit be damned. Production is mobile; workers are irrelevant.”

You might remember that during the Machinists strike, Teal Group analyst Richard Aboulafia suggested in this piece that the strike might be the last straw with Boeing and the Puget Sound region.

IAM 751 undoubtedly has some legitimate grievances. Over the years, Boeing management has shown that it knows as much about labor relations as the producers of Predator III knew about science fiction. It doesn’t matter. This strike, following myriad others and with little hope of improved relations, will almost certainly precipitate a BCA exit. Over the next ten years, BCA will move to southern states with weaker unions and right-to-work laws that diminish union power. As the car companies realized, it’s easier to train flexible workers than it is to work with experienced but inflexible workers.

(In Aboulafia’s latest newsletter, he looks at the downturn in aerospace and predicts that jet deliveries will recover by 2014).

What do you think of Sell’s and Aboulafia’s theories on Boeing and its future in the Puget Sound region?

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