Boeing-Machinist deal refreshing outcome at difficult time
For a place notorious for glacial process and lost opportunities, this breakthrough came with remarkable speed.
Special to The Seattle Times
The most remarkable aspect of the deal between Boeing and the Machinists is how two longtime antagonists negotiated in good faith and compromised for the greater good.
In an America that's more polarized than at any time since the eve of the Civil War, this is no small feat and a commanding example.
To be sure, each side had a sawed-off shotgun at its head.
Boeing faced trouble before the National Labor Relations Board for allegedly setting up the North Charleston, S.C., 787 plant in retaliation against the union. At the least, this promised more embarrassment. The company also would have been forced to invest billions and shoulder considerable risk had it decided to establish a new, out-of-state assembly for the 737 MAX.
Management, too, may have actually learned something from the outsourced disasters of the Dreamliner and its own culture of confrontation with employees. Even if the old Boeing "family" never returns, companies that value their workforces prosper.
For the Machinists, the North Charleston move should have been a near-death experience. Rightly or wrongly, the old confrontational style that many unions used against management is gone with the wind of globalization. If the union didn't find a way to give Boeing stability, it would be dooming the future of its younger members and the aerospace cluster in the Puget Sound region.
As for metropolitan Seattle and Washington, its hard to overstate the importance of an agreement that is truly a landmark.
If approved by union members, it will ensure that the next generation of the popular 737 is built here. That was the No. 1 source of local anxiety before last week's announcement. It promises to retain tens of thousands of good jobs, keep the Puget Sound area as Boeing Commercial Airplane's hub and even perhaps add work on the new Air Force tanker.
For a place notorious for glacial process and lost opportunities, this breakthrough came with remarkable speed. Boeing and union leaders worked quickly to cement a deal. On a parallel track, politicians including Gov. Chris Gregoire and business leaders acted with unity and a sense of urgency to sell the region, particularly with aerospace-training incentives.
Has a template been established for future progress in other areas? The biotech and game-development sectors need strengthening, and green technology is a potential opportunity. Finding the least destructive ways to address state revenue shortfalls is essential.
This would be a good thing. These are no ordinary times.
Predictions about a "new business cycle" should be made with great care and humility. Remember how experts were pronouncing the end of the business cycle back in the roaring '90s?
Still, a variety of factors make it likely that the old post-World War II cycle won't return anytime soon. In its place: High unemployment, big debt, slow growth or even contraction, and persistent crises as with the eurozone.
The result may look very much like a zero-sum game. And as every smart local leader knows: Everybody wants our economic assets.
Last week, North Carolina outbid Ohio to grab the corporate headquarters of Chiquita from Cincinnati and relocate it to Charlotte. The Southern banking capital is suffering an unemployment rate of more than 10 percent. In addition, the North Carolina textile, apparel and furniture industries have been devastated by the offshoring of jobs.
At one time, it was unusual for a major corporate headquarters to relocate. That may change, and states may be willing to spend heavily to win them. It already happened to Seattle in 2001 with the loss of Boeing's headquarters to Chicago. Although only about 250 jobs or so were actually lost, it was a huge psychological blow.
The Boeing headquarters' loss, along with South Carolina aggressively using incentives to win the 787 line that should have gone here under better circumstances may have lit the fire under business leaders and Gregoire to say, "never again."
If so, better late than never.
In a near zero-sum climate, few new major employers are being created, nationally or locally. The excitement is over plays such as Groupon or Facebook, which may produce quick wealth for those fortunate enough to get in on the initial public offering, but provide few jobs. Industry consolidation continues. Wall Street is more interested in funding trading gambles than providing capital to create jobs and productive businesses.
Seattle is hardly safe from the consequences.
Even before the Great Recession, nothing emerged in Seattle to replace Immunex, with 1,600 employees, after it was sold to Amgen in 2002. Nothing replaced Washington Mutual, which was the nation's biggest bank failure, and a calamity for thousands of workers and a constellation of small-business vendors since 2008.
The promise of creating a green-tech cluster here is real and should be pursued. But economic head winds, lack of patient investors, falling federal research dollars and lack of a national strategy to tax greenhouse gases will make this enterprise difficult. No new clusters are making much headway anywhere.
Thus it's more important than ever to ensure that the state and region are retaining their crown jewels, among the brightest being the aerospace cluster and Boeing Commercial Airplanes.
Slow growth does not mean slow change. The time will soon come when a host of new airplane-manufacturers make the Boeing-Airbus rivalry evoke nostalgia. The Puget Sound region took a huge step last week to be ready.
You may reach Jon Talton at email@example.com.
On Twitter @jontalton.
About Jon Talton
Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest