Donald Rumsfeld once came up with a terrific tool for assessing and categorizing the sort of risks and events people try to anticipate and plan for.
There are “known knowns” — events we know are coming, and when, and in what form (the holidays, for example).
There are “known unknowns,” which are events we know will occur, but we don’t know when, in what form or their severity. We know there will be natural disasters — floods, tornadoes, hurricanes, earthquakes, wildfires, blizzards. We might even be able to make some educated but very general guesses about when or where, but the specifics are a mystery.
Then there are the “unknown unknowns” — those issues, trends and calamities that no one is talking about now but by the end of the year will have dominated headlines.
The business news stories that you’ll be reading in 2018 can be sorted in much the same way. There are some companies, industries and topics that are such reliable generators of news that it would be a shock if they didn’t produce some headlines.
The Legislature, for example, is both a “known known” — we know there’s going to be a session and what subjects it’ll be dealing with (primarily, the budget) — and a “known unknown.” With a shift in the political balance of power so that Democrats control the executive and legislative branches of government (and with our two-governor system, the officially elected one and the governor-in-waiting over in the Attorney General’s Office), this could be an expensive session for business.
The governor already has signaled he really wants his carbon tax, and legislators who were frustrated by split control might be feeling some pent-up urge for some revenue enhancements of their own. Here’s the unknown: Do Democrats feel secure enough in their control of state government to push for more taxes, spending, costs and regulation?
Here’s one rock-solid, guaranteed-certain prediction for 2018: Boeing will make news.
Almost as certain is that when it does it will be significant. Not that what Boeing does isn’t usually of importance to the region’s economy, but Boeing is feeling multiple competitive pressures, and it needs to make some decisions right quick about how it’s going to answer them.
Airbus’ affiliation with Bombardier has Boeing talking to Brazilian plane maker Embraer. The outcome could be anything from outright acquisition to a partnership to no deal at all to Boeing doing something with one of the other emerging players. Meanwhile, Boeing is juggling decisions about revival of the 767 passenger-jet program, a new middle-of-market plane and a successor to the 737, even as it deals with gearing up for the 777X, production rate increases for the 737, the issue of workforce and bringing more production work back in-house.
Maybe it won’t resolve all of those issues with big news-generating decisions, but it can’t afford, financially or competitively, to have all or most of them on the “what will Boeing do in 2019” agenda.
Just as reliable for generating news is Amazon.
We’ll get a decision on HQ2 (we’ll be bold enough to venture one prediction: It won’t be on the West Coast). Amazon will disrupt an industry or three, either through its own actual venture or rumors that it might be interested. It will try some ideas, quickly jettison those that don’t work and move on to others. Competitors will continue to react to Amazon, rather than forcing Amazon to react to or catch up with them.
The ports of Tacoma and Seattle had two major news events in 2017: the ILWU contract extension and the Port of Seattle’s rancorous parting of the ways with its chief executive officer.
The Port of Seattle named a new CEO late in the year, a move that generated little attention, perhaps because turnover in that office has become a known known (“Port executive? Take a number. Next!”). 2018 might bring the news spotlight back to the long-running issue of what facilities the two ports keep and invest in and which they unload.
On the related subject of trade, the conventional prediction would be that the table-thumping and saber-rattling of the current administration will have a dramatic effect on cargo flows. So here’s an unconventional prediction: If there’s a major trade dust-up in 2019, it will involve not goods and commodities but American tech companies like Amazon, and it will involve not Asia but Europe.
A perennial favorite, Tacoma’s economic future, will be good for some headlines in 2018, if not actual resolution.
The future of downtown, the Tideflats, the Hilltop, the middle- and working-class neighborhoods, the economic base and status as a distinct regional hub or one more Seattle suburb — those will continue to generate debate, but there’s nothing compelling the city or its decision-makers and residents to do anything more than keep arguing them. Muddling along is not just an option, it’s usually the default position.
That’s not an exhaustive list of the known-known or known-unknown business stories you’ll be reading about in these pages. If those turn out to be the only subjects we contend with, we’ll still have no shortage.
But they won’t be. Somewhere lurking out there is a story that we won’t see coming until it’s almost upon us. We don’t know what it is now, but we’ll sure know when it’s here. Watch this space. And good luck in the new year.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at email@example.com.