Matt Yglesias has a great article on Boeing’s attempt to extort money from local communities for the privilege of having a Boeing plant in their community.
Boeing Will Build a Factory in Your Town If You Pay For The Factory
It’s no secret that big companies with lots of jobs to throw around try to strike good deals with state and local governments in exchange for deigning to locate there. But Boeing’s wish list for building a 777X factory is extremely ambitious. For example, they would like to build the factory in a city that will pay for the entire building of the factory, with the following three points listed as desirable:
-“Site at no cost, or very low cost, to project.”
-“Facilities at no cost, or significantly reduced cost.”
-“Infrastructure improvements provided by the location.”
When you go to the link supplied the thing that strikes you is the other requirements are such that there a not very many locations that will fit the bill leaving Boeing with less leverage than it thinks it has.
• An airport with a 9,000-foot runway capable of handling both the 777X and 747-400 jumbo freighters that could deliver parts.
• Easy highway and road access to the site for delivering parts.
• Direct access to the site by rail, including a dedicated rail spur right into the site. This is described as “a critical requirement to support delivery and shipping of parts.”
In addition to these three essentials, the documents list one other “desired” infrastructure feature: a seaport that can handle regular and oversized containers.
In addition they will need a 400 acre site.
In my area Intel is the biggest employer and has received tax breaks but nothing like this. In fact one of the tax breaks was reasonable – acceleration of the equipment depreciation schedule. Since the technology is changing so rapidly that multimillion dollar equipment is likely to be obsolete within two years instead of five or ten. Property tax breaks are par for the course. This may be extortion but the Boeing demands are extortion on steroids.
In the end I imagine they will settle for a lot less if it’s in a right to work state. Seattle has everything they need but those Unions sure are a problem.