The Stand

Boeing cashes in on tax breaks, cuts 11K jobs in Washington

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The following was posted Tuesday by Machinists Union District Lodge 751:

OLYMPIA (Jan. 11, 2017) — The Boeing Co. has eliminated the jobs of more than 11,000 Washington state residents since Gov. Jay Inslee and the Legislature agreed to give the company the largest corporate tax incentives in U.S. history.

That’s why Machinists Union District Lodge 751 and the Society of Professional Engineering Employees in Aerospace are continuing to push for legislation that would hold Boeing accountable for the way it’s spending its share of the $8.7 billion aerospace tax incentives package that Washington Gov. Jay Inslee signed into law in November 2013.

“The World Trade Organization found the tax incentives to be illegal under international trade law,” said IAM 751 Legislative Director Larry Brown. “We think they are ineffective and immoral. Either way, it’s time for an overhaul.”

New reports from the Washington Department of Revenue show that Boeing received more than half a billion dollars — a total of $530.8 million — in 2014 and 2015. Data on prior years isn’t available, because the disclosure of that information was actually banned until the Legislature enacted a change in 2014.

Yet while the taxpaying citizens of Washington have been paying hundreds of millions of dollars each year to Boeing, the company has been cutting its workforce.

Between November 2013, when the latest tax incentives became law, and November 2016, Boeing employment statewide fell by 10,702 people. Boeing eliminated the jobs of another 712 people in December, when it announced 777 production rate cuts.

“That’s a total of 11,414 people who are no longer working at our biggest aerospace company, but are still on the hook for paying their full share of the aerospace tax breaks,” said Brown.

Some of the job cuts are the result of cost-cutting moves announced in March 2016, which included more than 1,000 Machinists Union members who took voluntary layoffs.

But IAM 751 President Jon Holden said his union and SPEEA are particularly concerned about the number of Washington state jobs that have been lost because Boeing decided to move work to other states, where they’re required to add jobs in order to qualify for state and local tax incentives.

Missouri, Oklahoma and South Carolina all required Boeing to meet job “creation” targets — and in some cases, wage and benefit targets too — to get state and local aid. Washington is the only state that did not, Holden said.

“We have great concern about the number of jobs leaving our facilities in Puget Sound for new locations where the company is creating jobs, capacity and capability outside of Washington state,” Holden said. “We know that’s not what the governor and Legislature had in mind when they agreed to give Boeing the largest corporate tax incentives in U.S. history.”

Our state faces huge challenges coming up with enough money to fully fund public education and provide adequate care for mentally ill residents, Brown noted. The Legislature is under court order to address these issues.

“It’s just going to be that much harder to come up with the funding if we continue to cling to a system of tax breaks that rewards Boeing for moving jobs out of our state,” Brown said.

Originally formed in 1935 by hourly workers at Boeing, District Lodge 751 of the International Association of Machinists & Aerospace Workers now represents more than 31,000 working men and women at 53 employers across Washington and California. For more information, visit IAM751.org.


Meanwhile, in today’s Seattle Times — Boeing plans buyouts, layoffs for engineers in first of three cuts for 2017 — Boeing unveiled Tuesday a new round of buyouts for engineers companywide, and warned that layoff notices will follow later for engineers in Washington state. Two more rounds are likely later this year. A similar buyout offer is expected Wednesday for some production workers.

And from Reuters — Boeing, new lobby group aim to keep $8.7 billion in state tax breaksBoeing has joined a new coalition lobbying to preserve $8.7 billion in tax breaks that Washington state gave its aerospace industry in 2013. The organization launched on Tuesday, Aerospace Works for Washington, indicates growing opposition to changing the incentives, and aims to counter efforts by some state lawmakers to tie the tax breaks to employment in the state, said Maud Daudon, CEO of the Seattle Metropolitan Chamber of Commerce… Despite the passage of the tax breaks three years ago, Boeing has since eliminated 11,414 jobs in Washington, about 15 percent of its workforce in the state, according to the company’s employment data.

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