Just a few months from the start of the 2017 legislative session, a Boeing official says the aerospace giant still has an important story to tell in Washington. Bill McSherry, vice president of government operations for Boeing Co., told The Columbian’s Editorial Board on Friday that Boeing remains the state’s largest taxpayer, largest private employer and the largest payer of tuition through a company program that paid $32 million in 2015 to send its workers to college.
“You know, I think we have not always been the most vocal tellers of our story,” said McSherry. He was accompanied by Kelly Maloney, president and CEO of the trade association Aerospace Futures Alliance of Washington, on a trip through Clark County to meet with business groups and others.
A big part of that story has involved tax incentives. In 2003, and again in 2013, the Legislature approved tax incentives that helped sway the company to keep jobs in Washington. McSherry said those tax incentives have worked, with the number of workers employed by Boeing in Washington rising from 53,000 to 75,000 since 2003. The latest aircraft produced by the company, the 777X, is produced in Washington as a condition of the $8.7 billion in tax breaks given to Boeing in 2013.
“That sounds like a really good decision that has paid off really well,” McSherry said of the tax incentives.
But the deal has drawn criticism. After getting the tax breaks, Boeing opened a new factory in South Carolina, where the company’s workforce isn’t unionized like Washington’s. The company’s workforce in Washington has also fallen from the roughly 83,000 employees it had in 2013.
Earlier this year, the Legislature considered and nixed a proposal to tie Chicago-based Boeing’s tax breaks to its number of employees in Washington. The topic could resurface in the coming months as lawmakers grapple with a state Supreme Court decision requiring the Legislature to fully fund basic education.
When McSherry was asked if he could understand why some people might be upset with the company’s decision to set up in South Carolina, he responded that the situation wasn’t handled “the best.”
McSherry stressed that about half of Boeing’s workforce is located in Washington, including about 250 employees in Clark County who commute to nearby facilities, including a plant in Gresham, Ore. He said that Boeing faces significant challenges in coming years including intense competition from foreign competitors who have heavy government support. He also expects challenges in replacing retiring workers. While Washington offers a skilled and productive workforce, he said it’s still not a “low-cost state.”
“If you look at how Washington stacks up against competitor states, even with the aerospace tax incentives, we are not a low-cost state,” he said. “The aerospace tax incentive puts Washington in the game from a cost perspective, but they do not make Washington a low-cost state.”
During the interview, Maloney said there are 1,400 aerospace companies in the state. She said they often get phone calls or emails from state governments offering incentives to move.
“The worst thing we can do is harm what we’ve already done,” McSherry said.
