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  • Boeing 2009

As part of Boeing's ongoing dispute with the National Labor Relations Board (NLRB), new internal documents (pdf) were released today, detailing "Project Gemini," the aerospace giant's long-term strategy to move jobs out of Washington state. Right at the top of the first Project Gemini document, dated April 27, 2009, Boeing clearly states the project's strategy and purpose: "Establishing long-term manufacturing capability outside of the Puget Sound, starting with a second 787 final assembly line and progressing to the next new airplane program." And that's gotta be bad news for workers and elected officials hoping to keep in-state production of the newly announced 737 MAX.

The documents, obtained by the NLRB under subpoena, and released today by Machinists Union District Lodge 751, also reveal that the supposed "competition" for the second 787 assembly line was anything but. The various pros and cons and risks and benefits listed throughout the documents are consistently lopsided in favor of keeping the second 787 assembly line Everett, by nearly every business metric. Boeing determined that siting the second line in Everett would result in lower startup costs, faster ramp up, higher productivity, and a simplified supply chain, whereas a Charleston, South Carolina line would introduce further production delays, dilute workforce skills, and result in a "negative impact to 787 program profitability." The only consistent advantage to the Charleston site, repeated throughout the documents: "Leverage 787 final assembly placement decision by rebalancing an unbalanced an uncompetitive labor relationship."

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If Boeing's board was making a business decision, rather than a political and ideological one, the choice was obvious: A second Everett line would save the company billions of dollars and months if not years of delays, resulting in higher productivity, higher quality, and higher profits. That's Boeing's own conclusion. Boeing doesn't even significantly save on wages in non-union South Carolina—according to Machinists spokesman Bryan Corliss, entry level workers in South Caroline are paid only 30 cents an hour less than their counterparts in Everett. Add that to the fact that according to Boeing's own analysis, the Charleston line presented a "high risk to program execution," and there's an argument to make that any choice but Everett would amount to corporate malpractice.

Unless, of course, the main rationale driving Boeing's decision was never higher productivity, higher quality, and higher profits.

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At some point, years ago, Boeing's Chicago-based executives decided to move production out of Washington and into a non-union state. The Project Gemini documents outline all the many risks and costs involved, and yet Boeing proceeded anyway, because the goal was never as much to speed up production and improve profitability as it was to "create long-term change in union leverage." And despite Boeing's disingenuous claims to the contrary, it's a decision that will cost the Puget Sound region thousands of middle class jobs.

"Boeing is not creating new jobs in Charleston," said Corliss at a press conference earlier today. Boeing is currently assembling 787s on a second Everett line, but when that "surge" ends in 2014, Everett is projected to lose between 1,800 and 3,000 jobs. "They are moving jobs from here to South Carolina," insists Corliss. And the numbers back him up.

Which raises the question: Are Washington taxpayers getting their money's worth? Back in 2003 the legislature granted Boeing a $3.92 billion, 20-year tax incentive program in order to keep 787 production in the state. "Legislators never dreamed that they didn't secure all of 787 final assembly" when they negotiated the deal, said the Machinists' Connie Kelliher, who worked closely with legislators to help push through the package. Boeing benefited from $62 million in B&O tax reductions in 2010 alone, at a time when legislators are struggling to close yawning budget gaps.

So if Boeing won't keep its end of the bargain, isn't it time for legislators to ask, "Why should we?"