What Boeing stands to gain from Washington beyond tax breaks

  • By Dan Catchpole and Jerry Cornfield Herald Writer
  • Saturday, February 22, 2014 7:06pm

EVERETT — Washington will never know whether its bid to land the 777X could have swayed the Boeing Co., which had threatened to build the plane elsewhere, supposedly more cheaply.

Boeing made it clear from the outset that it was an “open-and-shut case” for Washington if the Legislature extended tax credits, which it did in November, and Machinists ratified a concession-laden contract extension, which they did in January.

So the airplane will be built here, and the company’s 22-state competition to pick a location for the 777X assembly line abruptly ended. But not before Boeing had in hand all those responses to its request for proposals, including Washington’s.

State and local officials say the document is not binding but is a good list of intentions, which they still hope to stick to. So there is unfinished work.

Aside from 10 years of labor peace (and cheaper labor) and what’s been called the largest U.S. tax break ever — worth an estimated $8.7 billion over 16 years — what else does Boeing stand to gain in coming years?

The staff at the state Department of Commerce submitted a 165-page document that pitched the inherent advantages of Washington but also pledged new spending or policies to directly benefit the company.

For Everett and Snohomish County, that mostly means quickly approving permits for factory expansion.

The state government, for its part, promised to consult Boeing before rewriting rules and regulations that affect workers and the environment, and to pour millions of dollars into training for existing and potential Boeing workers.

“The whole idea was to use it as a blueprint for helping us find avenues to get the 777X built in the state of Washington and to help us move forward in ways that will keep the aerospace sector strong,” said Linda Lanham, executive director of the Aerospace Futures Alliance.

State Sen. Doug Ericksen, R-Ferndale, a member of a legislative task force focused on winning the 777X, doesn’t intend to read Washington’s proposal.

It “is not as crucial as what we do going forward in terms of improving the overall business climate,” he said.

Two big promises to Boeing in the Washington bid await follow-through and could indeed benefit all businesses.

Promises on pollution

One of the more prominent and complicated loose ends that is important to Boeing involves Washington water quality standards as measured by the amount of fish that’s safe for people to eat. If a factory puts toxins into a river, the pollutants can get into fish. If people eat the fish, they ingest the toxins.

So the more fish people eat — as expressed in a standard called the fish-consumption rate — the cleaner water has to be, which means fewer pollutants can be discharged into rivers, lakes and other bodies of water.

For years, advocates for environmental groups, American Indian tribes and fishermen have said the state’s official estimated fish-consumption rate is far below the actual rate of consumption, meaning that people are exposed to more extremely dangerous toxins — such as nitrates, arsenic and lead — than is reflected by the official fish-consumption rate and related water-quality standards.

Representatives of Boeing, other manufacturers and public waste-treatment operators have fought raising the rate, saying that the technology doesn’t exist to implement the water-quality standards that would have to be followed.

A few years ago, the state Department of Ecology considered raising the level, and industry pushed back.

Responding to their political pressure, former Gov. Chris Gregoire stepped in, delaying the rule-making process into 2014, according to documents uncovered last year by Seattle-based InvestigateWest, a nonprofit news outlet.

Boeing told Gregoire’s administration that making fish safer to eat would cost the company hundreds of millions of dollars and make future expansion in the state too expensive, according to InvestigateWest.

Washington’s bid for the 777X assured Boeing that Inslee doesn’t intend to speed up a re-evaluation of rules and won’t set fish consumption rates that hurt business.

“The governor has committed that the state will not adopt regulations that fail to meet the dual objectives of increased human health protection and a thriving economic climate for existing and new business. The Boeing Co. can be assured that cost effective, feasible compliance pathways for your existing and/or new sites will be available as part of any state-driven outcome,” Washington’s bid states.

The current rate is 6.5 grams per day. If a person eats more than that amount, he can potentially be exposed to dangerous toxins. The rate works out to be about one meal of fish a month.

“And that’s a pretty skimpy meal,” said Janette Brimmer, an attorney for Earthjustice in Seattle. She represents several environmental groups and fishermen in a lawsuit to force the U.S. Environmental Protection Agency to step in and set Washington’s fish consumption rate.

Ecology agrees that the current 6.5 grams per day is not an accurate reflection of reality and is considering raising it to anywhere from 125 grams to 225 grams a day, said Sandy Howard, a spokeswoman.

Brimmer and other critics say the state has dragged its feet, while Inslee and state officials say they don’t want to rush a complicated issue.

Many federal laws say compliance costs must be considered in rule making, but not the Clean Water Act, the federal law behind the fish consumption rates, Brimmer said.

“They always say you’re cutting into my profit, but you’re using a public waterway that people eat from and drink as part of your disposal and you don’t pay anything for it,” she said.

Investing in education

Everett and Snohomish County stand to score big if the state follows through on one of the proposal’s promises.

The state “is prepared to design and fund” a specialized training program at the Washington Aerospace Technology &Research Center at Paine Field. The program will serve current workers and new hires for at least 10 years.

Washington State University’s presence could grow much more rapidly in Everett, too.

Inslee told Boeing the state will “work to establish WSU Everett as a branch campus by 2019” with the as-yet-unfunded School of Advanced Manufacturing and Aerospace as a cornerstone.

This marks the first time the governor has publicly endorsed the community’s long-sought higher education dream.

“I think there’s reason to be optimistic about the establishment of a branch campus,” said WSU President Elson Floyd, who cautioned that a full-blown university won’t be operating that quickly.

“No doubt we would not have the complete infrastructure in place,” he said in an interview earlier this month. “It’s my hope we will be well on our way.”

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

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