Boeing Demands Welfare Before Building New Airliner


If you want to get an idea of how tight a hold defense corporations have over the government, take a look at this Seattle Times scoop (update: originally reported at the St. Louis Post-Dispatch). It reports on a secret document drawn up by Boeing and sent to 15 state governments. Boeing is dangling the prospect of establishing factories to build its new 777X commercial airliner, with the promise of creating thousands of jobs, but it is also demanding that taxpayers foot the bill for the building of the factory, the real estate, the facilities, and much more.

Here is a list of some of the demands the great welfare queen Boeing issued:

• “Site at no cost, or very low cost, to project.”

• “Facilities at no cost, or significantly reduced cost.”

• “Infrastructure improvements provided by the location.”

• Assistance in recruiting, evaluating and training employees.

• A low tax structure, with “corporate income tax, franchise tax, property tax, sales/use tax, business license/gross receipts tax, and excise taxes to be significantly reduced.”

• “Accelerated permitting for site development, facility construction, and environmental permitting.”

• Low overall cost of doing business, “including local wages, utility rates, logistics costs, real estate occupancy costs, construction costs, applicable tax structure obligations.”

• The quality, cost and productivity of the available workforce.

• Predictability of utilities pricing and government regulation.

So, Boeing walks into a bar tended by Uncle Sam and says, “Hey Sam, give me billions of dollars worth of free stuff, tax breaks, subsidized cost structures, and any other government assistance you can think of, and put it on the tab of the American people. In exchange, I’ll put some of your constituents to work – albeit at lower wages than usual.”

What a deal! While it’s great for Boeing and it helps ensure the politician’s reelection because they get to point to the uptick in employment numbers, it’s a bad deal for the taxpayer.

Despite the fact that in this case the Boeing factory will be building commercial airliners, this is the kind of raw deal Americans are served with in virtually every military contract. As I wrote about in October, rent-seeking defense corporations that have politicians wrapped around their little finger keep building expensive jets, tanks, warships, and weapons systems that the Pentagon says it doesn’t want or need. But they get built and bought anyways because politicians who understand the whole reciprocal back-scratching proverb insist upon it. It’s not necessary for national defense according even to the top military brass, but Americans get stuck with the bill anyways because the military-industrial complex has the clout to do it.

That’s the kind of safety net Republicans and Democrats don’t like to make an agenda out of.

9 thoughts on “Boeing Demands Welfare Before Building New Airliner”

  1. The government needs the tax income to pay for its wars, the defense companies can create both jobs and war machineries, so, they make deals on the payment of what is said to be the "costs of the industry" or creating new jobs, yet they get paid when they have a contract signed by the government, in another word, what is theirs is to be kept by the shareholders and investors as bankers and privet people as kings and queens, while people pays twice for these companies to creat jobs, now, don't forget the incentives governments pays them to keep the workers. The oil companies argue the very same, they have millions of workers and making billions of dollars in pure profit, yet the amount of incentives paid by government makes up for salaries paid by these companies to its workers, but by the end of the day the gasoline prices are much higher then what is the costs of producing it, here people also pay twice for these companies to operate, to have billions of dollars pure profit.

  2. This is disgusting behavior by Boing and its corporate board. Corporate America disgusts me. Carnival is also up to this with the Port of Tampa. Their mega ships won't be able to fit under the Sunshine Skyway bridge when they start using larger ships in Tampa and of course Carnival is looking to Tampa to either raise the bridge (not possible) or build Carnival a new port for its ships outside of the bridge. Same crap, different set of greedy a-holes.

  3. In the small western town where I live, two household names in the computer industry were given millions in tax breaks to locate facilities here for the promise of a few well paid jobs. Funny thing is, no one I know, and no one they know has actually landed one of the promised jobs, which appear to be mainly security guard positions filled by corporate cronies who brought in people from outside the community.

    Does Boeing need help to divvy up the massive profits they'll make? That seems to be about the only area in which they're not asking for taxpayer funded help.

  4. economic rationalism, aka voodoo economics, aka the neoliberal 'rip-off' spiral-down

    This Boeing-gambit is reversing 'user-pays,' in that the commune (local, state, country) is to provide land, infrastructure, taxes and workers, all at the lowest possible *price*. (Recall that price may be independent of value.) Because Boeing's offer is widely made, communes may compete against each other, possibly eventually arriving at prices below actual cost. Good for Boeing – if it works, but possibly ruinous for each step in the chain land-holders, communes and workers alike.

    In fact, the proof is all around 'us,' were 'we' in the US, and not much different any- and every-where else that economic rationalism rules. All over the US-dominated parts of the world, it seems, local, state and country communes are suffering from inadequate revenues (due mainly to tax-cuts, and those cuts mainly coming off the *already obscenely rich*), forcing the communes to a) cut their outputs (usually *required* services; street-repairs through welfare), b) having to borrow to make even half-hearted efforts at meeting their responsibilities, but c) exactly due to spiral-down, being forced into 'austerity' programs = deeper service-cuts, while the people continue to suffer job-exports and falling wages, leading to the people's incomes also spiralling down. Proof = ~47mio in the US on food-stamps, just at a time when the federal politicians are attempting to cut the provision of these food-stamps. A strange exception to communes having to cut expenditures is the US federal govt., which, although going steadily deeper into debt (and faster than all others), can compensate by – magic! – printing $s.

    Now Boeing has a single competitor, namely Airbus, whose wages are mainly in the EU, where economic rationalism is not *yet* as widely deployed (but see PIIGS, ex-East, et al., and others rapidly catching up – to its shame, including Switzerland) – but in any case, Boeing's costs are lower, so it can make super-profits, aka economic rent. Airbus will be forced to follow the same path, resulting in wage-losses in EU, yet another spiral-down.

    All these spirals-down reduce the people's incomes, and as the process goes forward (and down), the people will eventually be reduced to a sustenance-only existence (shades of Hobbes: "… and the life of man, solitary, poor, nasty, brutish, and short"), with little to no $s left over to buy iPads or wide-flat-TVs, say.

    Bet that'll p**s both Apple and China off!

  5. PS – Note that as a result of the US being the 'land of the free, home of the brave,' and also claiming to be the (equal 2nd)-best democracy in the world, *all* that happens (as a result of govt. actions, here vicious 'economic rationalism, aka voodoo economics, aka the neoliberal 'rip-off' spiral-down' leading directly to serfdom & poverty for the people) is the undeniable, directly attributable fault of "you, the people" (and, of course, who you voted for). Sooo, good people of the US, *you* brought this disaster down upon your own heads. The solution should be obvious. (IF that's too hard to compute THEN tip: *Never* vote for a Repug or Dummo; they are but two sides of the same coin, and bipartisan = un- & anti-democratic.)

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