Trash talk doesn’t win games. It can feel good, rally the fans and rattle a rookie opponent. But it doesn’t put points on the board.
Last week Boeing announced that it had agreed to purchase a South Carolina plant with capacity to spare. Although Boeing officials maintain that no decision has been made regarding the second production line for the troubled 787, the announcement spurred speculation. And, it got our governor talking a little trash about folks down South.
“You can go to South Carolina and pay peanuts and you can get that in return,” said Gov. Chris Gregoire. “That’s not what Boeing’s about. Boeing’s about quality.”
If Washington is going to retain good jobs, we cannot underestimate the competition. Home team cheerleading aside, the governor’s comments could backfire by feeding outdated stereotypes and reinforcing the Northwest’s too often deserved reputation for smug complacency, potentially undermining her efforts to make the state more competitive.
South Carolina is no rookie competitor and, far from Dogpatch, Charleston recently appeared on National Geographic magazine’s list of the 50 best places to live, along with several Washington cities.
In 2008, the Charleston metro area ranked 10th on the Milken Institute’s list of best cities for job creation, behind Olympia and Tacoma, but ahead of Seattle. Inc. magazine calls it one of the best cities for doing business.
All this comes from last December’s Charleston profile in The Economist, which also highlighted the region’s high concentration of industrial engineers and rapidly growing information technology sector. In addition to BMW’s only North American assembly plant, the state’s industrial base includes Michelin, Fujifilm, 3M, ArborGen, Eastman Chemical and other internationally recognized employers.
They’re not paying peanuts. They are getting quality. With the recession pushing South Carolina’s unemployment rate over 12 percent, the state welcomes new investment. One of the few firms capable of generating its own gravitational pull, Boeing would quickly anchor a constellation of related business activity.
Interstate business climate rankings vary, reflecting the rankers’ biases. While I don’t put a lot of stock in them, it’s worth reviewing a few. On some the Evergreen State beats the Palmetto State. On others, South Carolina comes out on top. The Forbes magazine assessment that put Washington third best in the nation places South Carolina No. 29. On Forbes’ ranking of 200 metro areas for business and careers, Seattle comes in at No. 17 and Charleston No. 27. Both Site Selection and Pollina Corporate Real Estate put South Carolina among the “top ten” business states. Washington didn’t make the list.
Forget the trash talk. We’re facing real competition for real jobs. Despite the 787’s well-documented rollout hassles, the plane remains a good long-term bet. Purchasing a supplier gives Boeing increased production and quality control. And it offers the firm the option of moving the second line to a state offering lower costs and, more important, better labor relations.
Consider the findings of the Deloitte Consulting competitiveness analysis that Gregoire cited last spring as she stepped up efforts to secure the state’s aerospace cluster. Despite a highly trained workforce, the world’s highest concentration of aerospace companies, and competitive tax incentives, Washington suffered in comparisons with other states, including South Carolina. In particular, labor costs, including extraordinarily high workers’ compensation benefits and claim rates, hinder Washington’s competitiveness. Deloitte pegs Machinists’ average salary in Everett at $53,500; in Charleston, $45,500. Washington’s skilled workforce is a key regional asset, but the promise of smoother labor relations and lower costs gives Charleston the edge.
That’s why Boeing’s call for a no-strike agreement from the Machinists’ union galvanizes state leaders. It’s serious.
The governor told the Seattle Times that Boeing’s request amounts to a “huge ask.”
“There has to be something on the other side equally compelling,” she said.
The Machinists’ district president, Tom Wroblewski, told the Times, “I can’t see ever taking our (strike) power away.” The company would have to come through with something huge, he says, like “guaranteed employment.”
It may not be that complicated. No agreement, no second line here. Boeing doesn’t need permission from the governor or the union to put the line in South Carolina. If it goes, the ensuing hardship here will be enduring and dramatic.
Richard S. Davis writes on public policy, economics and politics. His e-mail address is richardsdavis@gmail.com.
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