Washington state approves tax breaks for Boeing

By Liz Segrist
lsegrist@scbiznews.com
Published Nov. 11, 2013

The Washington State Legislature passed on Saturday a measure to extend nearly $9 billion in tax breaks for Boeing as part of its effort to lure the production of the 777X to Puget Sound.

The tax breaks will be good through 2040. They were passed after Gov. Jay Inslee called a special legislative session Thursday to discuss extending the tax breaks previously passed for the 787 Dreamliner, among other incentives and infrastructure improvements.

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The incentives are a crucial part of a two-pronged approach to ensure production of the 777X will be in Washington state. The other component requires the International Association of Machinists and Aerospace Workers District Lodge 751 and District Lodge W-24 members to approve a labor agreement (.pdf) with Boeing.

The union is scheduled to vote Wednesday, but it’s unclear whether it will receive approval after District 751 President Tom Wroblewski tore up the contract proposal in front of disgruntled union members last week.

The Boeing Co. has warned it could build its 777X jetliner outside of Washington if the union doesn’t agree to a proposed labor agreement.

In an emailed statement, Boeing spokeswoman Candy Eslinger said, “All of our options are still on the table, including those within Boeing and other interest we have received from outside.

“We chose to engage in Puget Sound first, but without full acceptance by the union and Legislature, we will be left with no choice but to open up the process competitively and pursue other options for locating 777X work. If this is not ratified per the scheduled union vote on Nov. 13, we will begin taking the next steps.”

Machinists union members would make several concessions under the proposed contract, which would end pension accruals for current employees and create a company-funded retirement plan.

In exchange for the 777X guarantee, Boeing proposed an eight-year labor agreement that will expire in September 2024. Additionally, within 30 days of ratification, all union members would be paid a $10,000 signing bonus, according to the labor agreement.

The 777X is expected to debut in 2020 and be Boeing’s “largest and most efficient twin-engine jet in the world,” the company said.

Reach Liz Segrist at 843-849-3119 or @lizsegrist.

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