A Boeing town feels betrayed by company

0 Comments | Deseret News (Salt Lake City), Nov 16, 2003 | by Helen Jung Associated Press

SEATTLE -- James Adams was a die-hard Boeing backer from the moment he saw B-17s during World War II. The Washington resident would promote Boeing jets to anyone who would listen and even picked airlines based on whether they flew Boeing jets.

But Adams' loyalty has been tested over the past few years. Boeing, he said, has stopped backing Washington.

It moved its headquarters in 2001 to Chicago. It has laid off tens of thousands of workers. And now, as Boeing looks elsewhere to build its proposed new 7E7 jet, weighing tax incentives and other perks proffered by competing states, Adams and others disenchanted in this Boeing Co. town are becoming Boeing Co. critics.

"I think it's a tragedy that Boeing has turned its back on a state that has essentially supported Boeing from the very, very beginning," said Adams, who has never worked for Boeing. "If you can't be an honest-to-God taxpaying business, then I have no more tolerance for them at all."

Small-business owners, flight attendants, even former Boeing employees who once pledged their loyalty have joined the ranks of the disgruntled. Their anger has come out in letters to local newspapers and e-mails to Boeing directly, objecting to the prospect that Seattle, long a part of Boeing's past and present, may not play a part in its future.

"What we're bidding for now is the prestige of building the 7E7," said Ray Freeman III, a Seattle architect whose father worked for Boeing nearly all his life. "Now we're going to pay to retain our status as Boeing's loyal children and, no, I just don't see it."

Boeing is aware of some residents' feelings of betrayal, spokesman Peter Conte said. But its decisions have been for legitimate business and strategic reasons, not a desire to break from Washington, he said.

Boeing moved its headquarters to be more accessible by all of its major divisions, including the St. Louis-based defense operations it inherited in its 1997 merger with McDonnell Douglas, Conte said. The move also gave each unit more autonomy, by not having the headquarters looming over any one unit, he added.

The economy has largely dictated the massive layoffs over the past two years, he said. Boeing may not return to its previous employment levels because of production gains and the desire to have a stable work force rather than big upward and downward swings, Conte said.

Picking a site for the 7E7 plant is part of Boeing's overall plan to build the plane as cost-efficiently as possible, Conte said.

Boeing, founded in Seattle in 1916, builds all but one of its commercial jets in Washington state. With the proposed 7E7 -- a midsize, fuel-efficient jet to enter service in 2008 -- Boeing launched a nationwide contest. Competing states are reportedly offering tax incentives and other perks in bids to land one of the few major economic development projects in years.

Boeing has long complained about the lack of competitiveness of Washington state, from its unemployment tax structure to the traffic jams that add time and costs to moving parts in and around Boeing's factories.

And Boeing still seethes over $47 million in transportation mitigation funds that the city of Everett forced the company to pay when Boeing expanded its Everett factory for the 777 jet program. By contrast, Toulouse, France-based Airbus, Boeing's biggest competitor, receives government assistance in transportation and infrastructure, Conte said.

To be sure, Boeing still has plenty of backers among residents and Washington state's political and community leadership.

Boeing's 7E7 site-selection contest, which it expects to decide later this year, has galvanized Washington state legislators. Lawmakers nearly unanimously passed a tax incentive package that would be worth $3.2 billion over 20 years for the aerospace industry if Boeing builds the 7E7 in Washington.

They also approved transportation improvements and an overhaul of workers compensation and unemployment programs at Boeing's behest.

Gov. Gary Locke, who has led much of the state's efforts to land the 7E7 project, has said the incentives are necessary to secure the 1,200 direct jobs the plant would provide and ensure the aerospace industry continues to be a significant part of Washington's future.

To many longtime residents, however, the incentives are bad policy.

"It's at a point where we have to pay blackmail to keep jobs in our state," said Greg Jacobs, an Alaska Airlines flight attendant.

"I think it's a little bit humiliating for the state," said Ned Gulbran, a former engineer and now a landscape architect in Seattle. The lower tax revenue from Boeing will mean a greater burden on small businesses, he said.

And recent news reports only add to the worries that Boeing is fading from the local scene. The Seattle Post-Intelligencer said Boeing will let Japanese companies build the wings for the 7E7, the first time it has let a partner or supplier take such a leading role in wing manufacturing. In addition, it may rely on its Washington state work force only to build the tail fin. Boeing declined to comment.