Holmquist : Boeing never should have been forced to look elsewhere
Senator says policies which could push new 787 line out of state represent a ‘travesty’

October 7, 2009

SPOKANE… In candid remarks this morning at the governor’s Eastern Washington aerospace summit, Sen. Janéa Holmquist took aim at the recently proposed $117 million hike in workers’ compensation taxes and other employer-deterring Olympia ideas which stand to make Washington even less competitive for aerospace jobs.

“Boeing and other employers in Washington are being wooed by locations with lower minimum wages, unemployment insurance costs and workers' compensation taxes,” said Holmquist, R-Moses Lake. “Unfortunately, while other states lower the costs of doing business, ours is rapidly moving in the wrong direction.”

Holmquist, who served on the Joint Legislative Task Force on the Aerospace Industry, offered a frank assessment of the situation that could lead to Boeing’s second 787 assembly line being located in South Carolina.

"For a number of years now, our state has pursued policies that have increasingly eroded Boeing’s bottom line, long-term financial feasibility, and its goodwill towards a state in which it has invested millions, even billions. 

“It is a travesty that Boeing has been forced into the position where it must consider an alternative to Washington,” Holmquist declared. “This should never have happened!” 

The 13^th District senator opened her remarks by holding in one hand Gov. Christine Gregoire’s glossy “business case for Washington” report, presented to Boeing late last month – which Holmquist views as unimpressive and failing to adequately address the company’s most pressing concerns, such as workers’ compensation costs, and work stoppages due to labor strikes.  

In the other hand she held a copy of the Deloitte Consulting report on Washington’s aerospace-industry competitiveness, released in April, which painted a bleak picture of how Washington stacks up against other states competing for aerospace jobs. 

“According to the Deloitte report, among the five states compared, Washington has the highest unemployment insurance costs, highest workers’ compensation costs, highest wage costs and the most work stoppages. Now we get word that (the state Department of) Labor and Industries will once again seek an increase in workers’ compensation rates, and the majority party in Olympia is declaring it’s open to tax increases,” Holmquist said.  

“I ask you, if the competitiveness of your business depended on it, which of these reports would you believe?”

Because Gregoire and Democrat lawmakers have ignored opportunities to adopt reforms that would improve Washington’s business climate, the state’s case to Boeing rests heavily on rankings compiled by outside organizations – which mean nothing to a company’s bottom line, Holmquist noted. 

“What matters is what Boeing thinks,” Holmquist said. “How many times do employers have to ring the alarm bells about the business climate before Olympia realizes there is something to it? To repeat the point made recently by Senator Mike Hewitt, who represents Senate Republicans on the governor’s aerospace council: when the Boeing decision comes down the people of Washington will want to know their state leaders did all they could to make us the home of the next 787 line. 

“We've already lost the (Boeing) headquarters to Chicago and now, potentially, the second 787 line. I do not think the status quo is good enough. We need to immediately move forward with improving our business climate to ensure we keep all of Boeing's manufacturing projects in Washington.  By modeling other states' best practices, we can implement solutions to move Washington in the right direction.” 

Holmquist, Republican leader on the Labor, Commerce and Consumer Protection Committee, laid out for the summit audience four areas where reforms will help not only Boeing and aerospace but all employers in Washington. 

• Workers’ compensation: Create a settlement option by passing Senate Bill 5465; better define "occupational disease"; establish networks of specialized medical providers; and stop diverting workers' comp funds, by passing Senate Bill 5464.
• Transportation: Pursue solutions to the regional and statewide crisis.
  
• Energy: Develop a policy that protects the environment without raising the energy cost burden on Washington industries.
  
• Taxes: Maintain and preserve existing aerospace incentives and other programs that provide a stimulus for economic growth, and streamline the reporting processes for those incentives.

“Take any talk of increases off the table,” Holmquist added. “Just as businesses have had to adapt to the challenges of globalization, so does government. Instead of setting policies to maximize tax revenues, we need to set policies that maximize the retention of jobs.”

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For more information contact Eric Campbell
at (360) 786-7503 or campbell.eric@leg.wa.gov