The announcements add up. Boeing will move its Seattle-area flight training operations to Miami. Boeing will lay off 800 machinists. Boeing will cut hundreds of white-collar jobs here, too, moving some airline engineering support to Long Beach, Calif., and some IT work to St. Louis and Charleston, S.C. Officials of both the company and the machinists union downplayed the big job announcement, saying it was not the sign of a down cycle. On the other hand, Intel’s Andy Grove famously said only the paranoid survive. And sometimes even the paranoid don’t make it. Chicago, do we have a problem?
Some of these moves may have an innocent logic. And, as I wrote recently, another headwind for workers will be the rise of a new class of sophisticated robots and automation. Still, when I was talking to Leeham Co. aviation consultant Scott Hamilton recently about another matter, he said the biggest threat to the Washington state aerospace cluster is Boeing gradually shifting work to Southern states. Boeing has bought more land adjacent to its new 787 assembly in North Charleston, S.C. And South Carolina doesn’t have those pesky unions.
We are, after all, only a branch office. It matters where the chief executive lives. What also continues to live, despite repeated and costly blunders, is a culture combining the imperial CEO, beancounters-trump-engineers, and the ghosts of McDonnell Douglas and Jack Welch. The board of directors has repeatedly failed to assert itself, capping its shameful performance by giving CEO Jim McNerney a hefty raise last year. No consequences. No accountability. Not even a sense of embarrassment. Meanwhile, this “anti-business” state has given Boeing billions in incentives/payoffs to keep work here. Unions have caved to preserve “labor peace.” It may not matter. The highest-quality aerospace cluster in the world simply may not “pencil out.” That’s the Chicago way.More