A new report has confirmed something Boeing figured out some time back: For the aerospace industry, Washington has lost much of its charm.
Done by Deloitte Consulting for Snohomish County’s economic development council, the report surveys the state’s competitive assets and concludes that “its disadvantages outweigh the advantages in attracting and retaining aerospace companies.”
That conclusion is hard to argue with.
As Deloitte points out, Washington still has a lot going for it. Compared to rivals – South Carolina, North Carolina, Texas and Kansas – it has the largest force of skilled aerospace workers, the most educated labor pool, the lowest property tax and the best quality of life.
But it also has the highest cost of living, the highest construction costs, the highest labor costs, the most days lost to strikes and the most expensive workers compensation system.
Note what those disadvantages have in common: cost. Combined, they add up to a huge liability at a time when airlines are squeezed for money to buy jets with; a time when Airbus has surpassed Boeing in productivity.
The strikes – which have become almost predictable – are especially dismaying because they are avoidable. Many aerospace companies seem to plug along just fine without regular eruptions of bitter hostility between labor and management. When contracts come up for renewal, Boeing and its Machinists often act like two scorpions in a bottle.
Last year’s Machinists’ strike – which shut down plants in Washington, Portland and Wichita, Kan. – lasted 57 days and cost Boeing an estimated $6.5 billion in revenues and $1.3 billion in profits. The company’s customers were also hurt. Damage on that scale gives Washington a toxic reputation as a place to build jets.
Gov. Chris Gregoire has been quick to respond to the Deloitte study. On Thursday, she called for the creation of a Council on Aerospace that would tackle the issues identified in the report, including Boeing’s labor-management relations. Good idea. It needs approval from the Legislature, and lawmakers ought to oblige the governor.
There’s an urgent need for action. Acccording to the state Department of Community, Trade and Economic Development, the Puget Sound region has the highest concentration of aerospace companies in the world. Washington has the highest per capita number of aerospace workers. The industry constitutes almost a sixth of the state’s economy.
That means Washington stands to be hurt badly by an exodus of aerospace enterprises. The potential for such an exodus is far too high to ignore.
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