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Dec 30, 201308:18 AMInside Wisconsin

with Tom Still

Why Boeing should select Wisconsin — and why it’s OK even if it doesn’t

(page 1 of 2)

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 and compelling.

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% 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 AirVenture 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% of all exports in the transportation equipment category, which was Wisconsin’s third-largest export sector in 2010.

(Continued)

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About This Blog

Tom Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal.

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