Danny Westneat reports in The Seattle Times that as the state Legislature scrambled to pass an $8.7 billion tax break for Boeing – the largest corporate tax break in U.S. history – one expert urged lawmakers to insert some type of requirement into the bill that would require Boeing keep jobs in Washington or risk losing their luxurious tax benefits, noting:
The deal is more of a handshake than a contract. It contains no guarantees our state will get more Boeing jobs. It also has no language to dissuade Boeing from moving thousands of jobs out of state, even as it allows the company to continue to reap the tax breaks.
That expert was Andy Nicholas from the Washington Budget and Policy Center. And how did that handshake turn out?
Well, last week Boeing said it was moving 1,000 Puget Sound engineering jobs to California. That’s after another announcing a plan last winter to ship much of its local research and technology division elsewhere, a loss of another 1,000 jobs.
It gets worse. Jilted by these surprise job loss announcements, worker productivity, morale and loyalty have plummeted at the aerospace giant.
Meanwhile, managers within the Commercial Airplanes division — who depend upon technical support from BR&T engineering labs — are “telling their executives how this repositioning is going to be disastrous,” according to one document.
In a weekly series of internal meetings since the beginning of the year, Boeing’s leadership has been gathering feedback from about 50 BR&T ground-level managers on how the “repositioning” is going.
The official summary notes from those meetings, reviewed by The Seattle Times, show the feedback is unrelentingly negative.
“Employees feel betrayed, upset,” said one manager in a January meeting.
“Almost on a daily basis, we continue to see morale erode away,” said another in February.
Top-talent engineers and workers with top-security clearance are flocking to new opportunities, disillusioned by Boeing’s recent actions.
When Boeing announced the BR&T shift, it said there would be no detrimental effect on its commercial-airplanes and defense units.
But the meeting notes show that questioning of the rationale for the move grew as engineers learned that Boeing Commercial Airplanes was worried about the “negative impacts” on its business if the research unit lost too many experienced employees.
The internal notes suggest that possibility is real.
“Some A-players are actively looking for jobs or are being contacted by third parties,” state the notes from a January meeting.
Each year, cities, counties and states give up $80 billion in taxpayer dollars to corporations. This isn’t all to say that tax subsidies are bad – they’re meant to be policy tools to incentivize a desired behavior or action from workers and business owners. But for tax incentives to work, there has to be some form of consequence if the beneficiaries don’t follow through on their end of the bargain.
We can craft smart tax incentives by integrating key reforms in our public policy, including: public disclosure of subsidy spending, inserting money-back guarantees in subsidy agreements and protecting public schools from losing funds to corporate subsidies.
Boeing isn’t playing by the rules – or more precisely, we haven’t set any rules for them – and as a result, millions of Washington taxpayers are subsidizing the company, with no performance guarantees for their money. It’s time for lawmakers to stand up and hold Boeing accountable.