By Tom Still
MADISON – State-to-state competition for big company moves
is usually a high-cost, low-results endeavor. Economic development experts and
politicians never really know if they’re being led down a primrose path by the
company being wooed, or how much it will cost them in tax breaks and other relocation
costs.
Case in point: Can you name more than one or two major
companies that have ever picked up and moved to Wisconsin, especially from
farther away than Illinois or Minnesota? It rarely happens.
The state’s bid to land Boeing Co.’s 777X production plant
is nonetheless worth a flyer, however, for reasons both surprising yet
compelling.
Read this column in the Wisconsin State Journal here.
Here’s the background: The International Association of
Machinists and Aerospace Workers union in the state of Washington has twice
rejected Boeing’s contract offers, which means a state incentive plan there
worth $8.7 billion over 16 years is likely scuttled, too. While Boeing is
headquartered in Chicago, the Seattle area remains its historic home – for now.
Twenty-two states, Wisconsin among them, have jumped in the
sky-high sweepstakes to lure Boeing to one of 54 sites. The company wants its
land and facility free or at deeply discounted prices. Boeing also wants local
governments to pick up infrastructure improvement costs and subsidize the costs
of training new employees, along with other tax breaks and promises of
regulatory takeoff clearance.
Wisconsin usually cannot compete financially when it comes
to those kinds of demands, and generally shouldn’t. The money spent on landing
one major company can bust the budget for what the state might otherwise invest
in economic development, which is often a bottom-up, “grow-your-own” game.
Then again, what state politician of any party wants to be
criticized for not competing for something as big as the 777X plant?
The Wisconsin Economic Development Corp. weighed in with a
proposal on Dec. 10 that could be competitive, assuming other states don’t
outbid Wisconsin on straight-up financial incentives.
Wisconsin has more air and space credibility than meets the
eye. While more than 60 percent of the nation’s aerospace jobs are clustered in
six states – Washington, California, Texas, Kansas, Connecticut and Arizona –
Wisconsin has a small but growing aerospace industry.
Those assets range from university-based space research in
Madison and throughout the UW System to the world-renowned Air Venture in
Oshkosh to commercial manufacturers such as Gulfstream, a General Dynamics
subsidiary with a plant in Appleton.
Wisconsin aerospace exports totaled $245.6 million in 2010,
according to the state Department of Revenue. That $245.6 million represented
13.8 percent of all exports in the transportation equipment category, which was
Wisconsin’s third-largest export sector in 2010.
While there are no major assembly plants in Wisconsin, there
are many Wisconsin-based suppliers of those major aerospace companies and more.
In fact, some 140 suppliers in Wisconsin work with Boeing. In addition,
DeltaHawk Engines in Racine, Engineered Propulsion Systems in New Richmond, Kestrel
in Superior and Morgan Aircraft in Sheboygan are examples of young, emerging
companies.
There is available land and facilities near Milwaukee’s
Mitchell Airport, and a long tradition of manufacturing expertise in
southeastern Wisconsin – as well as colleges and technical colleges with a
track record for training such workers. It’s also closer to Chicago, Boeing’s
base.
There are also port facilities in southeastern Wisconsin –
at least, until winter. It remains to be seen if a warm-weather port is part of
Boeing’s equation.
It remains to be seen whether Boeing will pull up stakes in
the Seattle area, and if the Machinists’ Union will continue to dig in its
heels. As Boeing looks for a place to land, however, company executives need
not feel like Charles Lindbergh on the first successful trans-Atlantic flight
in 1927. The company would not be flying solo in a state that knows its way
around the air and space industry.
Win or lose, Wisconsin’s Boeing bid is an appropriate test
flight for other opportunities to come.
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