COMMENTARY

May 20, 2004

Exclusive report identifies corporate strategy for fleecing state government
Boeing ahead of the curve

When Washington Governor Gary Locke gave Boeing nearly $4 billion in incentives to locate its 7E7 assembly in the state, did he know he was helping Boeing provide a case study for businesses all over the country?

An "Exclusive Report" by the Carolina Journal's Paul Chesser highlights how Ernst & Young, an international business consulting firm, recently made a presentation to the State Government Affairs Council, detailing how businesses can follow in Boeing's footsteps.

"Turning Your State Government Relations Department from a Money Pit into a Cash Cow," Ernst and Young's (E&Y) PowerPoint presentation, is an outline on how businesses can obtain government "incentives" just like Boeing did. Among those heavy hitters that E&Y emailed this presentation to are Nextel, Best Buy, Alcoa, Goodyear, Wal-Mart, Home Depot, Toyota, Capital One, Bank of America, Bayer, Bellsouth, Verizon, MBNA, Microsoft, Coors, Nissan, Anheuser-Bush, and Pfizer.

Though E&Y's report quickly acknowledges that taxpayers don't like corporate welfare, the report offers ways to "provide government with justification" for providing businesses state incentives. Among its suggestions: employers should identify "public benefits" of the projects seeking subsidies, while also making a "but for" the incentives threat.

Not surprisingly, these are the exact strategies Boeing deftly implemented in Washington.

And what did Washington get for its $4 billion in incentives? Not a single net new job. Boeing is assembling the plane in Washington, but not manufacturing most of it here. The majority of the manufacturing will be done in Japan, Italy, Canada, Australia, Oklahoma, Texas, and Kansas. To make matters worse, Boeing has reduced Washington employment by more than 4,200 since the incentives passed our legislature.

Boeing even bragged to investment analysts on hand for its annual investor conference in New York that it intends to remain profitable, in part, by not hiring additional employees. As a Seattle Times article points out, "Rather than make excuses for moving work overseas, [Boeing Commercial Airplanes Chief Alan] Mulally said building a network of global suppliers has enhanced Boeing's ability to weather the cycles of the airplane business." Mulally went on to say," We are not going to have the dramatic increase in employment as we have before, because it's not what we do now."

As the Carolina Journal's exclusive points out, we should not be surprised if we begin to see other industry executives laughing all the way to their investors due to the folly of state government. Read the Carolina Journal exclusive report below:

On Milking A State's "Cash Cow"
Carolina Journal | May 20, 2004
RALEIGH, NC - A workshop conducted in late March, led by experts in getting economic development incentives from state and local governments, shows that large companies are now banding together to learn how to extract as much public money as possible from elected officials. The seminar, presented during a portion of the annual three-day meeting of the State Government Affairs Council, taught dozens of corporate government-relations executives how to "Turn Your State Government Relations Department from a Money Pit into a Cash Cow." Michael Press, national director of Ernst & Young's Business Incentives Practice, and Robin Stone, former vice president of state and local government relations for The Boeing Company, delivered the Microsoft PowerPoint-supported presentation March 26 in Savannah, GA...more

PDF of "Cash Cow" presentation

Contact: Booker Stallworth | Communications Director | 360.956.3482

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org