Things haven’t exactly worked out for Boeing’s 787 global production strategy.
The Chicago-based corporation farmed out the pieces to sites around the world, and then brought them back to Everett to be fitted together. It is hard to maintain quality controls when the production and design is shopped out to companies in China, Japan, Italy, Sweden, and several other countries. But there is a coherent marketing reason for doing this. Boeing is counting on purchases from Japan Airlines and carriers from other countries that are participating in 787 development and production.
This doesn’t explain Boeing’s threat to start a second 787 assembly line in South Carolina. As far as I know, South Carolina has not succeeded in seceding from the union (they tried to do that once) and establishing South Carolina Airlines.
So maybe it is the education level of the South Carolina workforce that Boeing wants. After all, one of Boeing’s criticisms of our state is that we don’t invest enough in education. The conservative American Legislative Exchange Council issues a Report Card on American Education. Our state ranks 12th, with a high school graduation rate of 71 percent. We rank 20th in eighth grade reading and 18th in eighth grade mathematics.
Admittedly, Washington has a ways to go. But how about South Carolina? They rank 39th, with a high school graduation rate of 53 percent. Their eighth grade reading rank is 41st and they’re 28th in eighth grade mathematics. Doesn’t sound like a school system where I would want my kids to go. After all, wouldn’t you define failure when only half of kids graduate from high school?
Well, maybe South Carolina’s college education stands out. Boeing needs lots of engineers. Let’s see, 30 percent of Washington’s residents aged 25 and over have earned at least a bachelor’s degree. In South Carolina, it’s 23.5 percent.
Still scratching your head? Health status is an important factor in worker productivity. Maybe Boeing executives are counting on that. Less than 17 percent of Washington residents smoke. Almost 22 percent of people in South Carolina smoke. Cardiovascular deaths per 100,000 are 20 percent higher in South Carolina. Premature deaths are more than 55 percent higher. There are two and a half times more occupational deaths in South Carolina than in our state. Perhaps in South Carolina life is just cheaper.
We know that in South Carolina labor is cheaper. The median wage in South Carolina is $14, compared to $18 in our state. That’s an $8,000 difference in annual income for the average worker. Wages actually fell over 4 percent in South Carolina in the first eight years of this millennium, while in Washington wages rose 5 percent. And we know that you get what you pay for. No wonder that Boeing was having problems with the aft fuselages made in South Carolina. Taking over a production facility with significant quality control errors and expanding it doesn’t sound like the solution for quality control!
Boeing has been good for our state. But remember, our state has been good to Boeing. The University of Washington’s engineering program produces a stream of smart and creative people and ideas for Boeing. We have 600 aerospace related companies that Boeing looks to for sub-contracts, new work and new innovations. We have engineers and machinists who know what they are doing and have invested their lives in developing the technical knowledge to make Boeing airplanes the best in the world. We have a physical infrastructure sited with favorable tax incentives for Boeing. We have a workforce training system in place to supply a steady stream of productive workers for Boeing. These are the factors laid down over time that have enabled productivity in our state to far outpace productivity in South Carolina, by more than $13,500 per worker per year.
Boeing didn’t make profits of $2.7 billion in 2008, $4 billion in 2007, $2.2 billion in 2006, $2.6 billion in 2005, and $1.9 billion in 2004 by the genius of revolving-door executives alone. The engineers, machinists and other workers actually building the planes contributed quite a bit.
In South Carolina, where the Confederate flag still flies on the grounds of the state capitol, Boeing would be starting over with little infrastructure, no research universities with which to partner, and a poorly educated and not too healthy workforce, ground down through generations of racial divide-and-conquer politics. That’s a heavy sacrifice just to avoid allowing organized workers a voice in the workplace.
John Burbank is executive director of the Economic Opportunity Institute (www.eoionline.org ). His e-mail address is john@eoionline.org.
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