Boeing wants state to boost training, trim labor costs

EVERETT

Washington’s aerospace community has a healthy “to do” list for the state Legislature this session, which began Monday, Jan. 12.

“We don’t want to step backward,” said Linda Lanham, executive director of the Aerospace Futures Alliance.

Lanham also serves on the governor’s aerospace council, which developed its list of legislative priorities in October. The council’s primary goals echo the Boeing Co.’s: reducing workers compensation and unemployment insurance burdens of aerospace businesses and increasing state-funded worker training programs.

More than 84,000 Washingtonians work in the aerospace industry, according to the Employment Security Department. At the end of December, Boeing employed 76,417 people in the state — down slightly from a high in October of 76,869.

Scott Carson, president of Boeing Commercial Airplanes, warned business and government leaders at a luncheon last November of the company’s need to reduce costs in the face of rising competition from Japan, Canada, Russia, China and Brazil. The company’s major competitor, Airbus, is based in Europe. Although the state has made progress in making Washington a more competitive place to do business, Carson said, there’s still “significant room to improve.”

The state offered more than $3 billion in tax incentives to persuade Boeing to assemble its 787 Dreamliner here. And groups such as Aerospace Futures Alliance have pushed to extend those tax breaks to aerospace-related companies excluded by the initial legislation.

Government and community leaders aren’t likely to take Boeing’s suggestions lightly. In the next decade, the company could begin work on another new jet: a replacement for the single-aisle 737, built in Renton. The Aerospace Futures Alliance estimates the 737 alone generates $3.8 billion, or 11 percent, of Washington’s exports annually.

Lanham said her group plans to work closely with a legislative task force this year to push for a statewide aerospace training program. The state funded the Employment Resource Center in Everett to help Boeing screen and train potential 787 employees. But Lanham said the state’s aerospace training efforts still fall short.

The group will pursue Boeing’s goal of reforming workers compensation and unemployment, even in a tightening economy. The state is the second highest in the nation for unemployment insurance rates and has the ninth highest workers compensation rates. Keeping Washington businesses competitive creates jobs and helps the economy, Lanham said.

Lanham also doesn’t want to see the state change the tax breaks given to aerospace companies over the last few years. While other industries shrink, some aspects of aerospace continue to grow in Washington, Lanham said. That growth could be threatened if aerospace companies are saddled with higher tax burdens.

The Boeing Machinists union, which also has an agenda for the 2009 Legislative session, wants the Legislature to take a hard look at the companies receiving those tax incentives. The Machinists supported the breaks when initially passed as a means of creating “family wage” jobs, said Larry Brown, the union’s legislative director.

But “some of these jobs are definitely not what we feel would justify the incentives,” he said.

Some of the companies receiving tax breaks still pay workers $11 to $13 hourly, forcing those employees to rely on public support via government subsidized housing, medical care or food stamp programs, Brown said.

Although a report on the tax subsidies is due to the Legislature in 2013, the Machinists union would like to see that moved up to 2010. Lawmakers should have the assessment as they begin looking at ways to encourage Boeing to build its next new aircraft in Washington, Brown said.

Michelle Dunlop writes for the Herald of Everett.