Governor Makes the Business Case for Boeing

Yesterday Gov. Gregoire released the pitch she is made Friday to Boeing Commercial Airplanes CEO Jim Albaugh to convince the company to build the second 787 production line here rather than Everett.  Aubrey Cohen at SeattlePI.com reports here. This is notable.

"We think Washington provides the highest possible quality, lowest possible risk and a competitive cost structure," Bill McSherry, a special adviser to Gregoire, said in an interview Monday. He said Gregoire was not proposing any new incentives to win the second line, adding that the state has taken many steps to improve the business climate for aerospace since 2003 and would continue to talk with Boeing about the company's legislative priorities.

The Seattle Times has some Republican reaction.

"I am disappointed to learn that the state has not seen fit to offer additional financial incentives," said U.S. Rep. Dave Reichert, R-Auburn, in a statement. "The 787 being built in South Carolina would be a blow. ... We must think creatively and strategically."

And state Senate Minority Leader Mike Hewitt, R-Walla Walla, ridiculed the governor's document for citing selected surveys that rank Washington's business climate ahead of states in the South.

"While this report is beautiful and glossy and filled with rankings, is there really any substance here that Boeing hasn't already considered?" Hewitt said in a statement. "We should be taking action like we did in 2003."

The Times also includes the information on the Deloitte study released last year citing, among other competitiveness factors,  higher labor and workers' comp costs.

Media reaction was surprisingly, well, skeptical.

Joe Turner of The News Tribune writes:

tI's not exactly like closing the barn door after the horse gets out. It's more like publishing a report that says "our barn was the best barn" after the horse gets out (and leases a barn in South Carolina.)

And Brad Shannon at The Olympian writes:

Maybe I'm wrong but it sounds like a take-it-or-leave-it gambit.

See also good reports in the Puget Sound Business Journal, KPLU, and the Everett Herald. This from the Herald story is telling:

... Snohomish County Executive Aaron Reardon worries that state may put a better offer on the table than did Washington.

Like Walla Walla’s Hewitt, Reardon found the governor’s business case lacking. Instead, he would have liked to see it address issues — workers compensation, unemployment insurance and workforce training — that Boeing has raised repeatedly.

While “it appears Washington is losing the competition to South Carolina, some (lawmakers) in Olympia still seem to think that everything is fine,” Reardon said.

Boeing, like all major companies, won't be swayed by the rankings of national magazines, think tanks, or advocacy groups. What matters is the company's assessment of current and prospective business conditions, particularly labor relations, operating costs, and incentives. We'll know soon enough. A recommendation is expected by the end of October and a decision by the end of the year.