Short story. Boeing has constant strikes and poor quality work, they built a $2 bill facility in SC, a right to work state that also kicked in a ton of subsidies to get Boeing. The NLRB, now stocked with loyal obama socialists, is suing Boeing on the claim that it is an unfair labor practice to move to SC. ************************************* Biggest U.S. economic story of the year: Federal Government v. Boeing - April 27, 2011 @ 12:31 pm · Filed under Uncategorized Buried in the ocean of news regarding our three wars has been what I think is the biggest U.S. economic story of the year: the federal governmentâs lawsuit against Boeing, seeking to prevent the opening of its $2 billion factory in South Carolina, for which 1000 workers have reportedly already been hired (in case you missed the news altogether: story, story, story). Whatever the ultimate decision in the lawsuit, the very existence of the dispute will change the business landscape here in the U.S. for the next decade or two. First, the fact that this happened to Boeing, a company with vastly more political power than average (you might say that it is practically an arm of the federal government itself) is significant. There are hardly any U.S. or foreign companies that can rely on similar influence. For a U.S. company, for example, the prospect that Boeingâs $2 billion investment might be effectively confiscated by the government will be one more reason to build the next factory in a foreign country. The U.S. government wonât be able to sue to prevent the startup of production in Mexico, Canada, China, etc. For a Chinese investor, for example, contemplating investing in the U.S., imagine the impact of the story. The Chinese investor has no political influence in the U.S., a tenuous grasp of American geography and language, and no hope of getting the ear of politicians who take calls every week from Boeing and its lobbyists. Given the vicissitudes of American politics and this unpredictable aggression against investors by government, the Chinese businessman is not going to finance the U.S. project unless it can deliver a rate of return comparable to what would be expected in other countries where there is a lot of risk from capricious governments (historically these have been Third World countries led by dictators or owned by families). The Chrysler and GM bankruptcies already showed bond investors that the black letter law may not have as much to do with how their investment works out as the sentiments of politicians and bureaucrats in Washington, D.C. (link). Now the federal government is stirring up uncertainty among those who would directly operate factories in the U.S. How to price that uncertainty is going to be a huge challenge, but the price is certainly not going to be $0. http://blogs.law.harvard.edu/philg/...tory-of-the-year-federal-government-v-boeing/
That sounds illegal. How can unionized workers in one state prevent a company from establishing facilities in another state? America is past the unions. They are just an anachronism, a construct from a long gone age no longer beneficial to anyone but their leadership. Unions are lazy, greedy, larcenous and spiteful and they should be made illegal by anyone who can manage to eject this marxist putz of a president. In honor of this thread I'm going to stop grocery shopping at Albertson's, a unionized grocery chain here in socal. I generally alternate between Trader Joe's, Bristol Farms and Albertsons but will just stick to the first two. I'm going to start eliminating union goods and services from my life a step at a time where possible. Every since SEIU got Harry Reid reelected by busing its casino employee membership to voting sites on company time I've been thinking of ways to eliminate them from my life.
what are the subsidies? if its tax breaks for the next x amount of years, i don't see that as socialism. i see that as competition and getting your state employed, vibrant, lively, etc.. I havnt read the article though.
Can't be, this is a case of government manipulation in one sector but not in another. So, there is no "factoring out" of the equation the taxation, thus you are left with a net government intervention.
no, when states offer breaks to tempt business to move, that's not government intervention. that's competition. no different than when companies review different country tax laws to determine the best place to set up operations. it's the free market. if state A offers an incentive, state B has the choice to counter. If they refuse, they risk losing. It's competition. It's only manipulation when the company is forced in one direction or the next and has no say in how they can choose.
I have issues with South Carolina legislators who aid and abet tax evasion. Recently SC granted Amazon a 5 year exemption from collecting or paying sales tax for sales in SC. This was part of a deal for Amazon opening a distribution warehouse in SC creating 1250 jobs. The way the deal was written the onus of tax collection and reporting fell onto the laps of SC citizens who are required to report and pay sales tax for Amazon purchases with their annual tax returns. This is no longer free market with the govt regulating and maintaining order. This puts every other SC retailer at a 8% competitive disadvantage and exposes every SC resident to potential sales tax fraud if they purchase from amazon and fail to report and remit sales tax. The Boeing deal is an example of corporate power in play pitting states against one another for special concessions and deals. Boeing can demand SC provide govt land on 10 year lease for $1. Exemption from all sales, use and state income tax for 5 years. Exemption from any state laws or enactment of state laws to serve their purpose. These states are desperate and will cut any deal to attract and retain corps. What SC can't do is trump federal laws, specifically the determination by NLRB that Boeing is retaliating against their Labor Union by moving jobs to SC. Boeing is liable for its actions and SC can't grant it relief.