Clinton St. Quarterly, Vol. 7 No. 4 | Winter 1985 (Seattle) /// Issue 14 of 24 /// Master# 62 of 73

Mr. Wilson’s response was that Boeing is building these weapons because the federal government is asking for them. The Heavyweight Boeing is the largest employer in Washington, employing one- quarter of the state’s and one half of King County’s manufacturing workforce. In 1983, Boeing received $2.6 billion in military contracts or 72 percent of the contracts in the Puget Sound area. Revenues in' 1984 were close to the same figure with the inclusion of NASA and Department of Energy contracts. This has pushed the company into the top rank of defense contractors nationwide, up from 12th place in 1970, and made the Boeing Company the 31st largest industrial corporation in the U.S.(in 1983) according to Fortune magazine. Previously, those attempting to .promote defense contracts argued that defense industries create jobs. Due partly to research by unions and citizens groups, that argument has been dropped. Now Senator Slade Gorton uses the national security argument to support increasing military production. In Let’s Rebuild America. William W. Winpisinger, the International President of the Machinists Union, which represents a high percentage of the Boeing workforce, points out that in the U.S., for every $100 available for domestic capital formation, $46 is spent on the military. This can be compared to $15 in West Germany and $3.70 in Japan. A $1 billion investment in guided missile production creates about 20,700 direct and indirect jobs. The same $1 billion investment would create 34,700 jobs in iron and steel production, or 71,500 jobs in education, 54,2601065 in health and hospital services, or 39,500 jobs in local transit and intercity transit systems. He goes on to say, “In other instances in recent world history, industrialized nations have sold their people on the idea that a military build-up was the route to full employment. Those nations were Hitler’s Nazi Germany, Mussolini’s Corporate State Fascism, and Tojo’s Imperialistic Japan.” Harlan Munsinger, Vice President of the Machinist and Aerospace Workers Union, put it this way: “A bomb produces no more jobs. The average Boeing worker doesn’t put his money in a bank or in a sock at home. He makes his car payment, a payment on a washer and dryer, and groceries for the kids, and if he has any money left he goes to a movie. The federal government doesn’t do that. They build a bomb and put it in the ground somewhere. Conversion Legislation 1/IXhat does a large corporation V W highly dependent on military contracts do when they begin to disappear? One solution is to prepare before that juncture to convert both the plant and workforce to a non-military endeavor. Or to train the workers for other, less-cyclical employment. Though the idea has been around for years, it is rarely considered until the hatchet has fallen. And look where that left Seattle the last time around. A group called the Washington Conversion Project initiated conversion legislation in 1983 which gained endorsement of 6 members of the State House of Representatives. House Bill 1601 died in committee before it received a hearing. There was no concerted effort to support it on the part of the peace movement, which had a national focus at the time. From the standpoint of the committee chairman, there was no push from the Democratic Caucus. Dan Grimm, House Ways and Means Committee Chairman, had to take on the task of the bill almost single-handedly. The bill proposed a one percent tax on all defense contracts which would have amounted to some $25 million annually in Boeing’s case. The funds were to be used to create loans for small businesses, set up a retraining fund, and create a commission to allocate the money. This bill was an example of conversion legislation at an initial stage. It did not ask any corporation to shift production of any of its military projects; it did not suggest that the public influence internal policies set by any corporation as it might a publicly funded organization such as a school, a university or government facility. Historically, Boeing has not favored tax changes of any kind. Boeing pays no federal taxes. Its commercial operations are subsidized by federal revenues. The company receives tax rebates which are credited against any further federal taxes which might become due. Currently Boeing has the highest negative tax rate in the country. The company pays no sales tax on any airplanes sold and no gas tax on interstate aerospace research. Boeing spent money fighting the corporate income taxjnitiative which it then added on to defense contracts. To ask Boeing to support a tax on its defense contracts and to relinquish $25 million annually would have been asking a lot of its managers and of the state legislature which—as one advocate of the bill suggested—“jumps when Boeing snaps its fingers.” Seattle Rep. Dick Nelson who sponsored the bill thinks otherwise. “I don’t agree that Boeing runs the legislature. Boeing has an inordinate amount of influence in the legislature. You can pick out specific bills where their influence has been felt, such as tax reform or zoning policy. They are heavyweights, but I don’t think they control the legislature. For “ O u r strategy doesn ’t call for doing less military work. There’s no strategy that says we’d like to do more from a percentage point of view either, but rather to increase business both comercially and militarily ” conversion legislation, plant closure legislation and other kinds of legislation dealing with worker-management issues, they're going to be there representing management’s point of view. “Mike Lowry (Washington Congressman from the 7th District) is the best example of someone who sees the issues independently from union or management. What it translates to is some legislators are more sensitive to what the company says. And generally legislators don’t hear directly from Boeing employees, although SPEEA (Seattle Professional Engineering Employees Association) has been somewhat organized. Company management would tend to work through the leadership in Olympia because they can deliver resources when it comes to campaign time with the argument that what is good for business is good for the state.” Nelson added that stability is a key issue if one is concerned about the economy. Legislators should understand that many military projects are inherently unstable as the weapon systems rise and fall or as government attitudes change. “There is a lot of skepticism in the business community about the level of business in the military economy. Many are1 saying at least that we have to decrease the increase. If band-aid approaches continue to have no affect, then I think the support in the business comrfiunity will build for reductions in military spending as a way to improve the economy. I think there’s some hope in that. Military spending may be good for Boeing but it’s bankrupting a lot of other companies. That connects back to the issue of instability oi those programs and legislators ought to be concerned about that.” ’ Are They Experienced? I XI group called Pacifists for Full Em- Xwployment did a research project and published a report that covers conversion of a specific project at Boeing: “Conversion of the Air-Launched Cruise Missile Plant: Where the Jobs Could Be.” The report focuses on conversion of the Air-Launched Cruise Missile plant in Kent, Washington, because the Air Force announced in 1983 that it plans to end production of this missile in Kent by 1986. According to this report, 130t) jobs will be directly affected along with 7300 employees of subcontractors who would be indirectly affected. In the event of a freeze on all Air- Launched Cruise Missile production, not only the jobs of those working in the Kent ALCM plant would be affected, but also jobs of about 10,000 people who make parts for the missiles. Two sets of criteria were used to determine industries which could be characterized as conversion industries, as noted in the ALCM report and Converting the Work Force by Marion Anderson. First was national security. Shortage of nonrenewable fuels and the instability of the Middle East signify a need for development of renewable energy sources. The second criteria was that conversion industries should utilize skills developed by people who have worked in the military industries or—in this case—the ALCM plant. The report evaluated the prospects for conversion to rapid transit equipment, light rail equipment, wind energy and solar energy. Currently Boeing’s non-aero- space divisions include Boeing Agri-ln- dustrial Co., Boeing Environmental Products, Boeing Computer Services, Boeing Marine Systems, and Boeing’s Vertol Division, where during the ‘70s the helicopter plant was converted to a mass transit production plant. In 1970, military contracts at the Vertol plant in Pennsylvania had been dropping. With the help of the United Auto Workers Union, the plant began building electric trolley and subway cars. Boeing sold electric-powered masstransit vehicles in Boston, Chicago and •San Francisco with a basically acceptable response from those cities’ transit systems. Boston’s Riverside Line showed a 19 percent increase in passengers. Boeing has not tapped the market in cities already-using old trolley cars which would need replacing. In the ‘80s, ten U.S. cities are building or expanding subway systems, with more than 2800 cars needed before 1990. Boeing developed the first urban people-mover system at Morgantown, West Virginia, for use beginning in 1975. The system connected the city center to two campuses of West Virginia University with 45 driverless cars, carrying up to 21 passengers each, at a cruising speed of 30 miles per hour. A smaller system carried four million passengers at the 1975 World’s Fair in Okinawa, Japan. The Vertol plant was reconverted to military helicopters by 1980, while still in the midst of demonstrating their light rail vehicles in other cities. From a business perspective, the project has not been considered successful. This has been attributed largely-to unanticipated marketing problems as well as the use of costmaximization practices built into military work which run contrary to cost-minimization concepts required in a competitive marketplace. With regard to mass transit, Bruce Jay of the Vertol plant said, “We reached a point where we did not see a continuity of markets. Boeing’s expertise is to get on the production line and continue to make the same design for a number of years. One of the helicopter designs we make stems back to 1962. Original forecasts were that that would be the case with mass transit. “In 1972, the U.S. Dept, of Transportation issued a document requiring a standard vehicle for cities wanting federal funding for their mass transit system—-to get the most bang out of the federal buck. The policy only lasted 2 to 3 years. Then it came back to each city coming up with 38 Clinton St. Quarterly