BOEING’S SUITS may have flown Seattle’s coop, but they’re not done with us. The aerospace giant is a corporate-welfare pig extraordinaire, which we didn’t object to very much when it was our corporate-welfare pig. Now, however, the now-Chicago-based company is exercising some of the new clout it has by virtue of having shed its old identity and cut its local roots. As a roving corporate global giant, it is free to stalk the earth in search of profits and friendly regimes that can help the company outsource jobs and slash costs. Then it can turn around and demand protectionist benefits such as subsidies and political favors from the federal government and the states, many of which will go the extra mile to save jobs and keep the company happy.
If you’re one of those people whose blood boils upon hearing that Halliburton is getting fat contracts, or if you rage about welfare cheats stealing your tax dollars, then get ready to stroke out over Boeing.
You may have heard our congressional delegation celebrating the week before last about the Pentagon’s approval of a $16 billion deal to lease 100 Boeing KC-767 tankers. “This is the day we have been working for,” crowed Democratic Sen. Maria Cantwell, who is happy about jobs. The deal will keep Everett’s 767 production humming and could lead to the eventual replacement of all military tankers with 767s, a huge potential payoff for the company.
BUT THE DEAL has been found deeply flawed and much more expensive than realistic alternatives such as modernizing the military’s current tankers or buying the new tankers from the get-go. (Any car shopper knows it’s cheaper to buy than lease.) And the lease arrangement seems specifically designed to put extra cash in Boeing’s pocket. Though Boeing agreed to trim the lease price by $2 billion, the total cost to taxpayers, according to the General Accounting Office, could be in the $20 billion to $30 billion range over six years. If true, taxpayers could pay between $12 billion and $22 billion more than necessary to keep tankers flying. That’s a lot of winged pork.
Critics of the deal have included Office of Management and Budget Director Mitch Daniels, assorted watchdog groups, government budget analysts, and conservatives like columnist Robert Novak, who wrote that in announcing the deal the Pentagon had “declared victory for Boeing over the U.S. taxpayers.” The most vocal opponent in Congress has been the independent-minded Arizona Republican, Sen. John McCain: “In all my years in Congress, I have never seen the security and fiduciary responsibilities of the federal government quite so nakedly subordinated to the interests of the defense manufacturer. Indeed, any objective analysis of the deal would conclude that the sole purpose served by this lease is to maximize the profits of Boeing, with consequent underfunding of other defense priorities.”
CLAIMING THE MOST credit for getting Boeing the tanker contract is Illinois Republican Dennis Hastert, speaker of the House, who just happens to represent the state where Boeing’s corporate bigwigs are now ensconced. And that’s important because Boeing is now pitting states against one another to compete for the right to assemble the new 7E7a bidding process designed to squeeze the most giveaways from desperate state governments. Illinois is in the running. As you know, so is Washington.
I don’t know what the process will be like elsewhere, but here our fearful leaders are engaged in selling us out to please Boeing. It’s like Fear Factor, with contestants eating worms and rolling in spiders in order to win. Our civic leaders have done this kind of thing for years but rarely so desperately as now. Even usually moderate editorialists have gotten carried away, with The Seattle Times‘ Lance Dickie beggingin what strikes me as a mixed Freudian metaphorto “smooch the shiny backside of Boeing’s corporate fuselage.”
YET DESPITE DECADES of such smooching, Boeing wants more and is using the June deadline of its site-selection process as the gun to our heads. The company wants the state to build a new $16 million pier in Everett; it wants the third-runway boondoggle at Seattle-Tacoma International Airport speeded up; it’s demanding the state’s unemployment system be revamped to save Boeing money, even though that could slash benefits and throw thousands of seasonal workers off unemployment. And those are just some of the public demands. Much of what Boeing is really asking will be kept secret, according to a story on Sunday, June 1, by Seattle Times reporter David Postman. We won’t get to see what deals and promises have been proffered to lure the 7E7 because the documents are supposedly exempt from public disclosure.
The near panic in Washington is palpable because the sense is that if we lose the 7E7, eventually we’ll lose the rest of Boeing. This was the very kind of desperation Boeing sought to induce by shifting to a global strategy and moving its headquarters. Unfortunately, under deadline pressure, we still haven’t fully considered the ultimate costs of being even more beholden to a company that demands so much from the taxpayersespecially in an America where the struggle for public dollars is bound to get more intense. Perhaps it would be better to cut Boeing loose.
Or, we could push to nationalize them. Between subsidies and defense contracts, Boeing lives off the public dole anyway. We could either be done with their blackmailwhich will only get worseor take the controls of this flying porker ourselves.
