The new state Aerospace Council, which Gov. Chris Gregoire asked the legislature to create, has a lot of work ahead of it to make Washington cost competitive and attractive to aerospace companies looking for a new locations or to upgrade current operations. Lawmakers, who are set to adjourn later this month, have an opportunity to address some of those cost disadvantages before them leave Olympia.
Gregoire, who testified for the legislation yesterday in the state House, wants to confine the council to the aerospace industry. Rep. Ed Orcutt (R-Kalama), a member of the House Community and Economic Development and Trade Committee told KOMO that he believes the council would not be necessary if the legislature would address competitiveness issues for all businesses in Washington. Orcutt voted to oppose the bill on those grounds.
The issue of location is not new. In the winter issue of Washington Business magazine, Boeing Commercial Airplane President Scott Carson told of a changing, more competitive world — a world where location is a choice. Translation: the company must move to where it can compete. Today, more than half of Boeing’s 163,000 jobs are outside Washington.
In testifying in support of the proposal, Boeing, AWB and the Washington Roundtable asked the Governor and legislature to fix the unemployment insurance system this session. In particular, they urged them to reject the House amendments to SB5963 which would add more cost to employers who are sole contributors to the unemployment insurance system.
The location issue came to a head last week when a study by Deloitte Consulting and commissioned by the Snohomish Economic Development Council went public. It concluded that aerospace investments are bypassing Washington in favor of Texas, Kansas, North Carolina and South Carolina. The key reasons keeping Washington from consideration include strikes, high workers compensation and unemployment insurance costs, a lack of coordinated worker training and education programs and infrastructure.
Many of these issues have been identified through the competitiveness work jointly commissioned by AWB and the Washington Roundtable starting in 1999. AWB and the Washington Roundtable partnered to form the Washington Alliance for a Competitive Economy (WashACE). WashACE now encompasses many local chambers of commerce and trade and professional organizations, all of whom, are working to attract and retain jobs in Washington's private sector.
The big question is what will the labor union response be? The Washington State Labor Council (AFL-CIO) said: "the Deloitte recommendations are nothing more than Boeing's legislative priorities. Period." So while the Boeing machinists union are part of the aerospace council, it appears the broader union organization may not participate. If that is the case it is unlikely the unions will back off the costly House unemployment provisions....and that would be an undesirable launch for the new council.
Don C. Brunell, President (DonB@awb.org)
