State, county, city officials offer up to $3.5 billion in incentives for Boeing

Officials hope to bring 777X production to St. Louis

By Gloria Lloyd

In a rare display of complete cooperation, state, county and city officials joined together last week to offer up to $3.5 billion in incentives designed to entice Boeing to bring production of its new 777X commercial jetliner to St. Louis.

If Chicago-based Boeing decides to expand its existing facilities in St. Louis, it could lead to an additional 2,000 to 8,000 high-paying jobs, County Executive Charlie Dooley told the County Council Dec. 9 before it unanimously approved a resolution approving up to $1.8 billion in local tax incentives as part of the state’s bid to lure Boeing’s new plane production.

“We are in this competition not because it’s the right thing to do, we are in this competition to win it,” Dooley said, casting aside doubts that St. Louis could be a contender. “We can’t afford to pass this up. This is a generation of jobs. I want to tell folks that you can have jobs for the next 20 or 40 years from the Boeing Corporation.”

The county’s local incentives are on top of the $1.7 billion in statewide tax incentives signed into law by Gov. Jay Nixon, who gathered state legislators together for a weeklong special session on short notice the week before. Boeing could take advantage of the state tax package through $150 million in tax incentives for the next 23 years, if the company meets a target of creating 8,000 jobs over that time.

Boeing spawned a bidding frenzy for production of the new 400-seat commercial jet after a machinists’ union in Seattle overwhelmingly rejected a new labor agreement. Seattle union leadership rejected Boeing’s final counteroffer late last week. The state of Washington is offering Boeing the largest incentive package in history, for $9 billion, in an effort to keep the jobs despite the company’s difficulties negotiating with the union.

Missouri was one of the few states to make details of its plan public. Boeing said last week it received 54 location proposals from 22 states in all, but declined to name any. Illinois also submitted a bid, which may have included a proposal to use land near St. Louis, around MidAmerica Airport in Mascoutah, Ill.

With such high stakes, St. Louis Economic Development Partnership CEO Denny Coleman said that in 40 years of working on economic development projects, he had never worked on a project bigger than this, with its possibility of transforming St. Louis into a hub for commercial plane production.

Besides uniting county and state officials who are often otherwise at odds, the project formed an unlikely union between local labor and business representatives.

“On this resolution, on this issue, labor and business are united,” said Kathy Osborne, head of the Regional Business Council.

Local construction unions pledged to work 24-hour shifts with no overtime to complete the factory in two years rather than the five Boeing predicted it would take, an aspect of the project they said would give St. Louis a leg up on other locations.

In newspaper reports of Boeing’s leaked request for proposals, the company said it planned to invest up to $10 billion in its 777X factory, but wants land for the facility at low or no cost, next to an airport large enough to handle jumbo jets. It is requiring good highway and rail access, but a seaport that can handle cargo would be a plus.

St. Louis has everything Boeing wants, Dooley told the Call.

“We’ve got everything. Listen. We’ve got rivers. We’ve got the Missouri River, the Mississippi River. But here’s the thing: we’ve got access. We’ve got (Interstates) 270, 170 and 70, right? We’ve got railroad access, right in the middle of the country,” he said. “We’ve got an airport, Lambert. They’ve got capacity. We have the land, we have a skilled workforce that’s already in place that could easily make that transition.”

Aerospace giant Boeing already has a large presence in the St. Louis area due to its 1997 merger with St. Louis-based McDonnell Douglas. It is currently the largest employer in St. Louis County, with 15,000 employees at its Hazelwood base, headquarters of the company’s Space, Security and Defense. Local workers build two military planes at the plant, the F-18 and F-15.

Dooley emphasized that the jobs were not just jobs, but well-paying careers that citizens of the county could keep for the long term and use to live a good life and raise their families. Dooley said his father retired from McDonnell Douglas after 30 years, and Dooley himself worked for McDonnell for 25 years and retired five years after Boeing merged with McDonnell.

“So I know that they provide good-paying jobs for this community for citizens, I know what they can do. You couldn’t ask for a better corporate sponsor than the Boeing Corporation,” he said. “They are a part of the fabric of the St. Louis metropolitan area.”

Commercial plane production would be new to the area, but the experienced local aerospace work force has skills it can transfer to new production, Dooley said. Colleges and universities have joined together to form an educational consortium to train aerospace workers, an initiative that will continue whether or not St. Louis wins the bid for the new Boeing factory.

All the county and state incentives are taken from taxes that would be paid by the project, so they do not take away from any current revenue streams.

If all goes according to plan, Boeing should decide on a location for the factory as early as January, said Dooley.

“It’s true collaboration — and hopefully we’re going to have a little celebration over this shortly,” said 5th District Councilman Pat Dolan, D-Richmond Heights.