Consulting Firm Says State's Disadvantages Outweigh Its Advantages

Responding to recommendations from a consulting firm hired to analyze her state's competitiveness, Washington governor Chris Gregoire announced last week a plan to draw together experts from government, aerospace, labor, and education sectors in a task force aimed at promoting the aerospace industry in the state.

The Associated Press said consultants Deloitte LLP were paid $250,000 by state economic development officials to come up with recommendations to keep the state competitive with aspiring aerospace industry states such as Kansas, Texas, North Carolina, and South Carolina, evaluating factors that could give Washington an edge over the others.

Deloitte's Aerospace Industry Competitiveness Study revealed that while Washington achieved strong marks for its large skilled work force and low property costs, negative factors included higher wages, sales taxes, unemployment, and workers' compensation costs. The firm concluded that the state's "disadvantages outweigh the advantages in attracting and retaining aerospace companies, relative to other states."

Based on Deloitte's findings, Gregoire introduced a proposal last week, House Bill 2308, to form the Washington Council on Aerospace. If approved by the state legislature, the new council would combine leaders from state government, the aerospace industry, organized labor and higher education.

The council would be charged with coordinating worker training programs at community and technical colleges, as well as at four-year universities; managing the recruitment of aerospace companies; creating jobs to grow the industry; and providing policy advice to the governor and Legislature.

"The legislation we're pursuing today will help us stay ahead of the curve as we compete with other states and other nations," Gregoire said. "Washington has had the edge in the aerospace industry for 100 years. We need to make sure that edge stays razor sharp. This legislation is about making sure we provide a level of service the aerospace industry needs to continue to thrive and grow in Washington state.

"Not surprisingly, the study found a lot for us to be proud of, and identified some steps we need to take to stay ahead of the competition," Gregoire said. "Our advantages include aerospace's wide presence across the state, our incredible workforce, a competitive tax environment and strong aerospace research. The study also confirmed that we need to do a lot more to stay ahead - from making sure we get the most value from the dollars spent on training, to helping labor and management communicate better."

Boeing spokesman Bernard Choi welcomed the task force idea. "It is an extremely competitive industry, and we need there to be a partnership in this state," he said. "We are supportive of anything the state can do, we all can do, to make Washington a more friendly environment for all businesses to compete."

Although Gregoire seemed content with the accuracy of Deloitte's study, the Washington State Labor Council noted that the results might be biased because Boeing is also one of the firm's clients.

FMI: www.governor.wa.gov