A new Boeing assembly plant may be coming to North Charleston, South Carolina. At least that's what everyone seems to expect and hope for. Not me. I grew up in South Carolina and was recruited to Boeing right out of Clemson University. I lived in Seattle and its surrounding communities for 38 years. I worked for Boeing for six of the early years. I shall list the ways Boeing was a bad employer and bad neighbor.
Boeing was, and still is, a boom-bust corporation. There was little stable employment for locals. During booms they recruited worldwide, bringing in droves of outsiders with the special technical skills required. During busts they laid off workers drastically, often requiring the survivors to work as much as 16 hours per week overtime because the modest overtime premium was cheaper than paying benefits for a sufficient number of workers doing 40 hour weeks.
When Boeing expanded they never did so in the same place. They went where the land was cheapest. Plants sprawled along 54 miles of the I-5 corridor from Auburn, WA to Everett, WA. They frequently transferred people along that corridor and there was never compensation for moving expense. 54 miles was considered a reasonable commute even though the traffic was usually slowed to a crawl by the glut of Boeing workers commuting in opposite directions. During my tenure at Boeing I was transferred among four Puget Sound cities, Seattle, Everett, Renton, and Kent. I was laid off twice when business slumped.
Boeing finally abandoned Seattle, its place of origin, and moved its corporate headquarters to the Midwest. This left varying reactions of shock and abandonment among the sentimentalists, to expletives of good riddance to a bad neighbor from many others.
Now Boeing might put a new 787 assembly line in North Charleston because South Carolina is so very business friendly. Indeed South Carolina solicits big corporations to come here with almost a blind religious fervor. The October 28, 2009 Charleston Post and Courier (P&C) lists these proposed goodies for Boeing:
Sales-tax break for construction materials.
Unspecified goodies similar to what was offered to Google's data storage facility
Tax exemption for aviation fuel used in test flights and transporting airplane parts
We don't know exactly what all the goodies are. The P&C says the revenue impact study released by the state board of Economic advisors was short of details but "Lewis Gossett, president of the S. C. Manufacturers Alliance said the 'state will certainly come out ahead'". Yeah, right!
South Carolinians need to wake up and be wary of this corporate giant. Otherwise our leaders will give away the store in their giddy glee. Who do we think makes up the revenue when we give all the tax breaks to business? We ordinary tax payers make it up of course. We pay the tax and we enjoy the urban sprawl and traffic jams. In South Carolina we pay both a hefty sales tax and a state income tax, and still endure underfunded schools and other public services. In Washington State they have no state income tax. They don't need one because business pays more of its fair share. Schools are better funded. This is one of the most important factors to produce higher skilled and better educated citizens and to retain and attract businesses that provide employment for higher skilled and better educated employees.
ADDENDUM OF OCT 29, 2009: Well they did it. This morning's P&C says "North Charleston won the fiercely fought battle for the 787…" Won! Ha! "Bought" is a better word. Our lawmakers paid $450 million in incentives. Boeing has to create 3,800 jobs here. The other thing we "get" is Boeing has to invest $750 million here within 7 years. Hmm, lets see, we invest $450 million and we get $750 million in seven years. That's like investing the $450 million at 7.57% interest. Hey wait a minute! They don't have to pay back $750 million in seven years. They just have to locate $750 million of their own assets here. Is this a good deal for us? Apparently I'm not the only one not falling down and foaming at the mouth in ecstasy over this sweet deal. The P&C quotes economics professor, Calvin Blackwell, of the College of Charleston as saying, "Generally this is not a very good strategy for states to employ…It's a race to the bottom: who can provide the most goodies?" Blackwell is paraphrased as saying that companies play localities off one another and that another downside is that jobs created don't necessarily go to current state residents. But, state residents are the ones who shoulder the impact to the tax base. Just how many jobs will actually go to local residents? Apparently that detail wasn't in the deal. Tim Coyle, Boeing VP in Charleston said the labor force should include a "fair amount" of employees from Charleston and from other areas. Tim, please define "fair amount".
South Carolina is about as nuts for capitalism as Michael Moore is nuts against it. I'm cool with capitalism. However, the South Carolina concept of capitalism is sort of the Latin American model, i.e. we welcome the outsiders to come in and exploit us. We beg those with the capital to come here for our business tax breaks, lax rules, cheap labor and paucity of labor unions. For Boeing we really bent over, grabbed our ankles and said, "Kick me…or whatever."
