Aircraft manufacturer Boeing says it will make a decision regarding production of its new 777X aircraft in early 2014 – and South Carolina is in the running for the project.
Company chairman and CEO Jim McNerney said “very specific plans” regarding the 777X would be released in “two to three months.”
“We have a number of alternatives,” McNerney told reporters at the Dubai Air Show, where the 777X officially debuted (and racked up $100 billion in orders from Middle Eastern airlines).
The plane will begin production in 2017 for delivery in 2020 – assuming it is able to avoid the myriad design and supply chain issues that plagued the launch of its 787 Dreamliner.
Boeing originally planned to build the 777X at its Everett, Washington location – although unionized workers at the facility rejected a new deal with the company. Everett still may get the plane when it’s all said and done, but Boeing is also looking at Huntsville, Alabama, Long Beach, California and Salt Lake City, Utah.
Oh … and North Charleston, S.C., although Boeing’s Palmetto State facility continues to underperform expectations.
Still, that’s not stopping South Carolina politicians – who have doled out more than $1 billion in taxpayer-funded incentives to the crony capitalism firm – from prostrating themselves before the Boeing altar.
“South Carolina is on standby and ready for you whenever you need us,” Haley told company officials last week, adding “our job is to support them in every decision that they make and to be there for them, so they know that South Carolina always wants to be their home.”
Really?
Meanwhile S.C. Sen. Hugh Leatherman – who refers to himself as “Senator Boeing” – says he received a call from the company last week in the wake of the union vote.
Expect both of these “Republicans” to open the saddlebags as part of an effort to land additional Boeing business – especially Haley, who is facing a tough reelection fight in 2014.
40 comments
South Carolina is on standby and ready for you whenever you need us
That’ll work great with that comment about incompetent, druggie South Carolinians.
Oh, just pass over another BILLION, and everything will be just hunky-dory.
Do not be such a sourpuss, Snarks. Reported drug use in SC is not as you portray. Look it up yourself
http://www.daodas.state.sc.us/statistics.asp
He was refering to a Haley quote. You must be one of those low info voters I keep hearing about.
https://www.fitsnews.com/2011/09/18/nikki-haley-doubles-down-on-drug-claim/
What?
Are you incapable of the most basic reading comprehension? Haley can’t have it both ways. Either we have a well training workforce ready to perform the highly skilled work Boeing needs or we do not. Her quote would seem to indicate she does not believe we have such workers.
Remember, I did not say we had a workforce comprised of people who cannot read and cannot pass a drug test…Haley did.
What part of “The contractor backed off the claim when asked to substantiate” do you not understand?
“The SRS contractor…will not substantiate the claim, according to an Associated Press article.”
So the obvious questions is, did Haley lie and make the whole thing up?
You do realize that Boeing will be a net gain to the taxpayers right? I’m not sure I understand the complaining about laying out money upfront to benefit in the long run.
“I’m not sure I understand the complaining about laying out money upfront to benefit in the long run.”
If it’s money taken from people not wanting to give it, that might be a reason. That’s redistribution.
If it is simply is a tax break, meaning Boeing keeps more of their own money, I’m all for it.
I can’t speak for Will obviously, so I don’t know where he’s coming from.
I don’t think I’ve ever seen a specific breakdown of how much Boeing’s incentives are tax breaks versus actual tax payer money handed to them.
I’d like to see that breakdown, too.
It’s redistribution if the money is taken from one person and given to the other with no expectation of it being repaid.
We’re not talking about redistribution. Example- redistribution would be taking money from wealthy taxpayers and giving it to poorer people through welfare. Those on welfare will likely never repay money given to them. Boeing, on the other hand, will repay the taxpayers not only the initial investment, but much, much more than the state and counties gave them.
See the BMW plant as an example. SC gave BMW roughly $150 million in tax incentives. In the 20 years it has been here, it has paid over $500 million in taxes to the state, and around $3 million a year to local school districts and $2 million a year to county governments.
I have no problem with the state using our tax resources to make wise investments in businesses that bring jobs to the state.
Boeing is not going to move to SC for our weather, dilapidated road system, or uneducated populous. We need to offer upfront incentives to attract major job creators to the state.
Furthermore, if you think the taxpayers are being harmed by this incentive, you’re greatly mistaken. Having people with good paying jobs in the state helps everyone. It’s baffling that people oppose this.
“It’s redistribution if the money is taken from one person and given to the other with no expectation of it being repaid.”
I’m don’t think I disagree with it.
For example, let’s say someone comes to me and says, “I’m taking $20 from your wallet, but I’m going to give it back to you in 5 years.”, I think it’s pretty safe to call that “theft”, or redistribution.
“I have no problem with the state using our tax resources to make wise investments in businesses that bring jobs to the state.”
Well it’s easy being generous with other people’s money.
“Boeing is not going to move to SC for our weather, dilapidated road system, or uneducated populous. We need to offer upfront incentives to attract major job creators to the state.”
I don’t disagree. However I do disagree with taking money from little people and companies and handing it to big ones. I think you can offer “incentives” by simply reducing Boeing’s tax burden to nothing and “win” without theft/redistribution.
“Furthermore, if you think the taxpayers are being harmed by this incentive, you’re greatly mistaken.”
I guess that’s where you and I disagree. I see all sorts of moral hazard and direct harm by taking money from the “little people” and giving it to big corporations, aside from the opportunity cost of taking money from the “little people”.
Sure, they bring in more jobs…but if that number represents $10 for each little person, is each little person getting $20 back?
Doubtful. Instead, SOME people are going to benefit, not all.
Whereas, if you contain your incentive activity to reducing taxes on the big boys you’ve caused no harm.
edit: “I’m don’t think I disagree with it.”
I think I was smoking crack while typing that sentence.
I meant t say “I don’t think I agree with that.” (your definition)
“I see all sorts of moral hazard and direct harm by taking money from the “little people” and giving it to big corporations, aside from the opportunity cost of taking money from the “little people”.”
If the “little people” are eventually repaid in full, where’s the moral hazard?
“if you contain your incentive activity to reducing taxes on the big boys, you’ve caused no harm.”
Except if we just reduced taxes on big boys, there would be no big boys to reduce taxes on.
“”If the “little people” are eventually repaid in full, where’s the moral hazard?””
As I mentioned earlier, I do not believe the redistribution of other people’s money comes back to them equally in profit, if at all. (all of these scenarios not accounting for inflation as well when someone takes your money interest free for years) This is what is commonly termed as “crony capitalism”, where certain favored parties usually buy off pols to get their hands on taxpayer money.
Of course, we haven’t touched on the moral debate of taking people’s money and giving it to others for any duration, but I suspect we don’t need to-unless you are not willing to concede that point as being theft.
“Except if we just reduced taxes on big boys, there would be no big boys to reduce taxes on.”
I don’t understand this point. Could you explain it further when you get a moment?
Merely offering a reduced tax rate will not attract large businesses to the state. If that was all they needed to spend hundreds of millions to relocate here, then that’s all the state would offer. SC just doesn’t have what it takes to only offer a reduced tax rate to attract businesses. It takes more.
“Merely offering a reduced tax rate will not attract large businesses to the state.”
This is your opinion.
If true, you’d have to admit that if the company courted could not justify such an expenditure, why on earth would it change for the taxpayers of SC?
That being said, I don’t think you realize(but maybe you do, I’m just guessing) how many taxes there are on a company like Boeing under SC’s traditional system without breaks:
You have huge taxes in the following areas:
1. Property (both real estate & REAL), that are among the highest in the Union(without FILOT’s, etc)
2. For EACH employees you have SUTA and the SC unemployment tax, which is a HUGE number.
3. You have SC income tax
Those three taxes are HUGE dollars. You eliminate them, you make SC very attractive.
There are also some positive things about SC despite an educational gap:
1. You have a large number of available people workforce to do menial jobs for a low wage scale(some people hate considering this a “positive”, but I’m not gonna be PC about it)
2. You have the port of Charleston, which while suffering a defeat at Jasper, is still a significant plus.
There are many things SC could do beyond handing over small guy money to big corps to sweeten the pie.
lol…let me take a moment from my “logic hammer” to express something to you outside of our discussion:
There is a point in one’s thinking where logical debate, discussions, and their conclusions start to be become “uncomfortable” for a THINKING person.
For example, when the very notion of how society “functions” today is called into question. Like “taxes” for example, and you have to admit that they are not voluntary, ergo “theft”….well that is a disconcerting thought to ALMOST EVERYONE.
It’s is a logical challenge that disrupts everyone, even possibly to the person pointing it out because it is so ingrained and accepted in “society” as defined today.
The usual response is not logical because it’s so upsetting.
Such responses might include calling such logical deductions “nonsense ;) “, or “unrealistic”, “unworkable”, etc. et al….none of which actually logically attack the deduction.
I understand this, many of the people making such claims understand this deep down as well.
The challenge is to accept the deduction, without emotion, and try to figure out what the hell to do with it. (I’m not giving any answers there, because I have none)
Good talk Jackie, I always enjoy them with you.
Another quick point on your questioning the “moral hazard”, or morality in general of taking someone’s money against their will and giving it to someone else, even if you think it’s “good” for them:
Assuming you are an attorney, I’m sure you can appreciate this, I’ll call it, the “Wimpy” defense:
“Your honor, I took the Plaintiff’s $20 with the intent of returning it to him 5 years later as $40, so you see your Honor, it is not theft.”
What do you think the verdict would be?
Except this is money that’s already been paid as taxes. If we were creating a special “Boeing tax” then, yeah, I’d agree with the so called “theft” argument. You’re taking the position that all taxes are theft, however. So are we to assume that I-26 was built on theft? Should we all have the ability to grab a chisel and chip back our percentage of I-26 as repayment of the theft? Of course not. That’s nonsense.
Would you be so concerned if the State invested tax revenues in t-bills or the stock market to generate further income in the future?
As taxpayers, we should be happy that, rather than just spending our funds on something that will never be returned, at least state leaders are investing our tax dollars in something that stands an actual good chance of improving the lives of people in South Carolina.
“You’re taking the position that all taxes are theft, however. So are we to assume that I-26 was built on theft? Should we all have the ability to grab a chisel and chip back our percentage of I-26 as repayment of the theft? Of course not. That’s nonsense.”
I disagree, it’s not nonsense. I’m not sure we can move forward because we disagree on the fundamental level of what constitutes theft.
“Would you be so concerned if the State invested tax revenues in t-bills or the stock market to generate further income in the future?”
No, I would be concerned at all!!!! You just highlighted why as well:
1. Such an investment you just described WOULD BE VOLUNTARY.
2. An “investment” such as this would come with the expectation of “profit” in return. If it wasn’t profitable, due to fraud or theft for example, I might be able to sue and claw some back.
If it was mismanagement, probably not. But I would at least have the possibility of being protected in the even of outright malice or intent to cause harm.
That’s the problem with the current system, there is little, most of the time none, accountability.
Seriously, how many articles do we have to read to see this?
“Except this is money that’s already been paid as taxes.”
Just quickly, let me expound on the Wimpy defense in the manner you argued:
“You honor, I already took the money in question from the plaintiff last year and fully intend to repay it with interest next year.”
What would be the verdict?
The judge would ask if the money was taken by lawful means. Stop with the “all taxes are theft” argument. We’re not going to repeal all taxes. If we’re going to have taxes, they might as well benefit us.
It is how the economic development game is played.
You use BMW as an example of the good that comes from these incentives. BMW is an example that has enough history to support your contention; however, there have been numerous examples of companies disappearing after they get the up front incentives and never coming close to holding up their end of the bargain. Mr. Folks has expounded on a number of those.
I’ll side with “?” on this and state that South Carolina should worry more about contributing to a better business environment rather than trying to bribe companies into coming, I think there is just too much opportunity for corruption when they cook these complex deals the details of which only the bureaucrats get to read. Plus I doubt our negotiators would try to put any language in the “contract” that would tie Boeing down. More than likely they will structure it in such a way as to give Boeing a commodity that they could sell to other companies and make additional dollars off “their” incentives should they decide to back out.
Jackie, the complaining has absolutely nothing to do with economics. It is Will’s unbridled hatred for Haley and Letterman. Now if Sanfraud and carpetbagger Davis had made the Boeing deal, Will would portray it as an act of genius.
You might have point. Will isn’t super strong on libertarian theory or its logical underpinnings at times.
A true “net gain to the taxpayers” would be a reduction in the taxes they pay (e.g., payroll, property, sales,etc taxes) Name one example where any tax has been reduced from incentives provided to recruited or expanding companies.
A new Boeing facility will increase the tax base with the additional jobs and related business growth. But, no tax cuts will likely result from it.
How do taxpayers “gain” when they continue to pay the same or higher taxes????
There’s more people with jobs to buy taxpayers’ products and use taxpayers’ services. Property value goes up. People are able to sell and rent houses. More businesses relocate to area to serve new employees with money.
Taxpayers gain when they continue to pay the same taxes if their infrastructure improves because of an increased tax base. While tax rates may remain the same, tax revenues will increase with additional taxpayers contributing to the pool. I would say schools will improve, but we both know that the teacher’s union would never let that happen. County services will also likely improve as counties will have more money to play with.
If there is a tax increase, then I would likely have a problem with Boeing moving to the area.
I hope SC gets it. It’d be a great coup for SC.
They want the plane built by 2020. There is no way they can build a new facility, train workers and pump out 777x’s by then. Their only real choice is Washington state. S.C. still isn’t producing and what they do produce has to be flown to Washington to be fixed.
Giving corporations tax incentives IS taking other people’s tax money and giving it to the corp. Particularly where the incentives remove a piece of property from the property tax rolls or require additional infrastructure. I like to say Boeing moved to Charleston and all I got was another red light on my way to the airport. Which is ALWAYS red.
That’s not to say that SC shouldn’t offer incentives for business. But if you closely scrutinize the last go ’round you’ll be left with the strong feeling that NO ONE in state government knows the total value of the incentive package OR exactly what has to occur before the deal becomes a net gain for SC. That’s the real problem.
“Particularly where the incentives remove a piece of property from the property tax rolls or require additional infrastructure.”
Isn’t infrastructure supposed to be covered by gas taxes, water/disposal taxes, etc.?
Isn’t removing a piece of property from the tax rolls allowing that owner to keep more of his/her own money?
Boeing needs a huge building to manufacture carbon fiber giant wings for their jets. They are looking at existing buildings to move into since Seattle rejected the contract offer. There is only so many acres around their current campus in N. Charleston?
http://www.bizjournals.com/seattle/news/2013/04/25/south-carolina-amps-up-boeing.html?s=image_gallery
Could it be done…but on top of their expanded operations too? Yes. Here is where Gov Haley needs to break new ground in being our Governor starting with some smart business negotiators in her circle. At least read Herb Cohen books.
October 2009, Boeing selected the North Charleston site for a new 787 Dreamliner final assembly and delivery line. Boeing broke ground on the new, 1.2-million-square-foot (116,794-m2) facility in November 2009. South Carolina teammates began early limited production in July 2011. The first airplane rolled out of final assembly on April 27, 2012, took its first flight on May 23, 2012, and delivered to Air India on Oct. 5, 2012.
The Boeing South Carolina Delivery Center, a 57,920 square-foot (5,381-m2) facility, opened on Nov. 11, 2011, and delivers South Carolina-built 787s to customers from around the world. Boeing South Carolina is only the third site in the world to assemble and deliver twin-aisle commercial airplanes.
Boeing South CarolinaIn May 2010, Boeing announced that it had chosen South Carolina as the location for a new facility to supply 787 interior parts to the final assembly and delivery site in North Charleston. Boeing Interiors Responsibility Center South Carolina is a 305,000 square-foot (28,335-m2) facility located 10 miles (16 km) from Boeing South Carolina final assembly and delivery. There employees manufacture 787 interior parts, including stow bins, closets, partitions, class dividers, floor-mounted stow bins used by flight attendants, overhead flight-crew rests, overhead flight attendant crew rests, video-control stations and attendant modules. The facility opened December 1, 2011.
In early 2013, Boeing announced that an IT Center of Excellence and an Engineering Design Center will both be established in South Carolina. As part of the engineering strategy, Boeing is building a new facility in South Carolina which will design and assemble the 737 MAX engine inlets. Assembly is scheduled to begin in the new facility in mid-2015.
A possible site, somewhere on the 300 or so acres Boeing has purchased, Moncks Corner the old nursery has a rail line. Ladson just down from Boeing (South Aviation is being extended across Ashley Frustrate). My bet is Long Beach.
The real problem is that the workforce in SC can’t handle the load with just 787, they are only able to produce less than one a month, 1/3 what their production was supposed to be, and its estimated to not get up to production speed until 2015, so seems pretty unreal when you look at the 777 production in Everett is at a 1.75 rate a week
Boeing 777x is awesome!
I hope it comes alive!
Hello, yes I agree with you! The BOEING 777x is efficient and will take a lot of gases in the greenhouse gases ozone layer!!!! That’s awesome for our world!!!!
Well, when Everett receives the S.C. Airplanes to complete we find parts literally taped on the airplanes and all the paperwork is completed as if the parts are installed. I see that as a HUGE issue and one that Boeing should take a close look at. Plus, there are customers that refuse to accept any S.C. Built planes! Hmmmmm…. Sounds like the skill level is not what it should be. We simply have more experience up in the Puget Sound…almost 100 years of it. That speaks volumes!!!