Boeing Co. (BA) Labor Unions Working for Conditions on $8.7 Billion Tax Breaks

Boeing Co (NYSE:BA)’s two biggest unions are working to push a legislative bill that will create conditions for the $8.7 billion tax incentive granted to Boeing and the aerospace industry by the state of Washington back in 2013. According to union leaders, two bills are being planned to be introduced in the current legislative session. Larry Brown, a legislative director of the International Association of Machinists (IAM) District 751, told Reuters in an interview that one of the bills will require Boeing and other players in the industry to maintain a certain number of jobs  in order to avail of the tax credit, while the other will require the companies who benefit from the said tax incentive to pay a “living wage”.

Boeing (BA)The tax credits, which amounts to $8.7 billion, is a condition of Boeing Co (NYSE:BA)’s decision to relocate the production of its 777X jetliners in Washington state. However, the company have issued a series of announcements regarding the relocation of its  engineering jobs, numbering by the thousands, to regions with lower pay requirements. In a statement, Brown said that Washington did not agree to the tax break so that Boeing “could create minimum-wage manufacturing jobs, and move good-paying engineering jobs out of state.” Brown stressed that it is fair to attach conditions to the tax incentive, considering that it is the biggest in the U.S.

Boeing Co (NYSE:BA) has cut over 2,500 jobs from its Washington state operations since the tax credit was approved way back in November 2013, in some cases relocating jobs to other states to meet requirements for incentives directly linked to specific jobs, according to the Society of Professional Engineering Employees in Aerospace (SPEEA). The IAM is looking to work with SPEEA to push legislations that would specifically delineate pay and employment standards that Boeing and other industry players have to meet in order to be qualified for the tax incentives.

Early in December last year, state auditors told a Washington legislative committee that financial metrics should be included to make tax breaks effective. Boeing Co (NYSE:BA), however, resisted the idea. “Attaching arbitrary job creation numbers to an industry that is already boosting Washington’s economy is harmful and unnecessary,” Boeing spokesman Doug Alder said, as quoted by Reuters. He argued that the company has already created about 30,000 jobs in Washington state since the tax break has been approved.

This article has been written by Nonito Guntan.

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