Friday, November 24, 2006
BY DON C. BRUNELL
Right now, things in Washington are pretty rosy. Our state's job growth topped 3.6 percent in the last 12 months, compared with the 1.4 percent national rate; state revenues now exceed projections by $1.9 billion; and Boeing announced it has over 450 orders for its new 787 fuel efficient "Dreamliner."
That is great news as lawmakers prepare to head to Olympia for the opening of the 2007 legislative session in January.
But we shouldn't be lulled into a false sense of security, content to just sit back and smell the roses. As any good gardener knows, fragile roses require meticulous care.
When Boeing moved its headquarters to Chicago and considered assembling the 787 elsewhere, it sent shockwaves through the state. Our rose garden was wilting in the heat of fierce out-of-state competition. Suddenly, our elected officials realized that Washington was truly competing in a global marketplace and could take nothing for granted.
Former Gov. Gary Locke and lawmakers fought hard to keep aircraft assembly jobs in Washington. Nurturing those jobs is the task of the current crop of legislators, because fortunes can turn in an instant.
In Europe, for example, Boeing's commercial airplane competitor Airbus was on the top of the world a couple of years ago. Today, it is reeling from production problems, delivery delays, and cost overruns. In the face of this uncertainty, cash strapped airlines are taking no chances and jumping ship for Boeing aircraft.
That's good news for Washington, but we can't become complacent. Even now, Airbus is scrambling to regain its competitiveness. It's looking outside Europe for lower cost components and cheaper places to assemble its version of the 787, and according to The Economist magazine, Airbus is considering assembling its popular A-320, its version of Boeing's 737, in China.
Hopefully, Airbus won't regain its footing at our expense. Whether that happens depends largely on what state lawmakers do this year.
Our elected officials need to remember that costs and quality are the driving factors in the marketplace. Customers shop for the highest quality at the lowest costs. Consequently, companies are always looking for ways to reduce their costs.
For example, when they site a new facility, they look for a place where the government wants those jobs; they look for places with streamlined permitting and regulations to expedite plant siting and construction; and they look at the costs associated with doing business in that area.
This is where state lawmakers come in. Washington is a high cost state and its historical trump card, low cost, reliable electricity, is out of the deck. Today, taxes, economic incentives, workers' comp, and unemployment insurance costs, highly educated and skilled workers, and regulations are critical decision-making factors.
Legislators can help keep Washington strong by continually considering the impacts their decisions have on the cost of doing business in our state.
Even though we're doing well today, lawmakers shouldn't be over confident. Remember, just a couple of years ago, Airbus was riding high and today it is heading for a crash.
The same thing could happen to us. We can't afford to just sit back and smell the roses.
Don C. Brunell is president of the Association of Washington Business.