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Fri, Oct 31, 2008

Strike Could Be Tipping Point For Boeing To Leave Seattle

Even If TA Is Passed, IAM Strike May Have Been Last Straw

While officials of the International Association of Machinists are high-fiving each other over a tentative contract settlement with Boeing, others worry frequent labor disputes are pushing the manufacturer to look for sunnier skies -- literally.

Teal Group analyst Richard Aboulafia tells Reuters, "This is the exact opposite of a partnership between management and labor. Both sides think the worst of each other. Boeing management's way out of it will be to move."

There have been hints dropped for years. Boeing has been based in the Seattle area since 1910, but in 2001 moved its corporate offices to Chicago, and came close to building its 787 Dreamliner elsewhere.

The State of Washington intervened with tax breaks and the Dreamliner stayed... but Boeing has lost 200 days of production in its Seattle-area plants over the past two decades, and that's certainly left Boeing soured on its home state.

During a 1991 speech before the Seattle Chamber of Commerce, former Boeing Chairman Frank Shrontz warned civic leaders a comparable aircraft could be built in the southeastern US for 30-to-40 percent less than one built in Washington State.

"Could Puget Sound turn into an aerospace rust belt of the 21st century, complete with padlocked factories, unemployment lines and urban blight?" Shrontz asked then. "It certainly could."

Even in the short term, the contract agreement isn't all good news for the 27,000 workers who went on strike. Lump-sum bonuses to be paid workers under the settlement fall short of covering wages lost during the strike.

Boeing has not yet said where it will build a replacement for its popular 737, but the company is reportedly being courted by states which outlaw mandatory union membership. Known as "right to work" states, suitors are said to include Alabama, Texas and the Carolinas.

FMI: www.boeing.com, www.goiam.org

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