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States grovel before Boeing in bid for 777X jobs

December 6, 2013
By DAVID A. LIEB , THE ASSOCIATED PRESS

JEFFERSON CITY, Mo. - With Boeing the king of U.S. aircraft manufacturing, more than a dozen states are groveling before the throne for a share of the riches to be made from the next-generation 777 jetliner.

From coast to coast, states are rushing to impress Boeing with lavish incentive packages that offer property, labor deals and billions of dollars in tax breaks. All this in the hopes that the aerospace giant will select them to assemble the new 777X - or at least give them a wing to construct.

The competition underscores Boeing's commanding bargaining position in an economy where top-notch manufacturing jobs remain scarce and elected officials feel obligated to pursue every growth opportunity, no matter how improbable.

Article Photos

AP PHOTO
In this artist's concept provided by The Boeing Co. is the aerospace company's new family of 777X jetliners, the 777-9X, top, and 777-8X. Boeing currently has more than a dozen states in competition from coast to coast offering property, billions of dollars of tax breaks, favorable labor deals and customized employee training hoping that Boeing will choose them to assemble its new 777X jetliner.

"We have gotten a tremendous response, and it's obviously created a lot of interest and a lot of excitement," Boeing spokesman Doug Alder said.

The contest unfolded in a mere matter of weeks after a machinists' union in Washington state rejected Boeing's proposed contract for the 777X because it would have replaced their traditional pension with a defined-contribution savings plan.

The Chicago-based company said it would look elsewhere and gave states until Tuesday to submit proposals. Winners will be announced early next year.

The Boeing buzz has been loudest in Missouri, where Gov. Jay Nixon immediately convened a special legislative session to approve an incentive package valued at up to $1.7 billion over more than two decades. The plan passed the Senate with bipartisan support Wednesday and could win final approval in the House on Friday. Boeing never even had to send a lobbyist to talk to a lawmaker.

Missouri Sen. Eric Schmitt, a Republican hoping to entice Boeing to expand in his hometown of St. Louis, called the package "a transformational opportunity."

Other states are keeping the details of their offers out of the public spotlight - and away from the inquisitive eyes of their rivals- by crafting them through administrative agencies shielded by non-disclosure laws.

Last year, Alabama lured Boeing's biggest worldwide rival, Airbus, to build a $600 million assembly plant in Mobile by offering tax breaks and $158 million for bond expenses, site and road improvements, building costs and worker training.

 
 

 

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