Boeing’s announcement that they will create second assembly line for the 787 in South Carolina, rather than near the location of the current one in Everett, prompts me to write.
Undoubtedly a major reason for Boeing’s move is the fact they will not encounter the problems that come with unionized workers, since their workers are not unionized in South Carolina. Another factor is that the government of South Carolina has offered Boeing a package of financial concessions. That is not unusual, as governments often provide incentives to lure companies to their area, or to keep them located in their area. Washington did just that a few years ago to insure that the original 787 assembly line would be here.
Deals to lure companies could be called bribery; demands by companies to stop their departure could be called blackmail. In either of those situations most taxpayers lose, as they must pay for the incentives, and the shareholders of the company involved are the winners.
Some of these situations are absurd. For example, in Hillsboro, Ore., Intel was given tax relief for 20 years at a time when they were making an after-tax profit of about 25 percent! Intel’s profits were embellished at the expense of low-income taxpayers. When property taxes are lowered for some, the remainder pay even more — because the government does not collect any less.
If a subsidy is truly needed by a mature company, I would suggest that the business plan causing the need for the subsidy is most likely flawed. Don’t give away taxpayers’ money.
I believe that a remedy to these bribery and blackmail situations is needed from our federal government. Local governments should not be allowed to make those kind of payments.