- Boeing leaves Washington state.
- A US state senator believes that the hostile business climate in Washington is partly to blame.
- This is part of a rising trend of hostile business environments that could lead to significant changes in the years to come.
The aerospace giant Boeing has long been synonymous with its roots in the Pacific Northwest. The company has been a major job maker in Washington state for decades. But not anymore. Last week the company announced that it did Consolidation of all production in North Charleston, South Carolina.
Boeing Move shows economic necessity
Boeing’s business move comes just months after the company announced that it would consider consolidating its business. The company has seen big refunds on orders this year since air travel has been reduced by more than two thirds.
Due to lower air travel and sales, airlines have little demand for new jets. The news couldn’t come at a worse time for Boeing, which is still grappling with the fallout over the 737 Max aircraft. Several high profile plane crashes of the new model marked the beginning of the Boeing crisis.
The worst crisis, however, was politics.
At least that is what Washington State Senator Doug Ericksen claims. He sees the hostile business environment of the state as the main reason it decided to leave for South Carolina.
When I was working on the task force trying to keep Boeing here, one of the constant issues we got from Boeing Corporation was every other state they went to. People rolled out the red carpet. And in Washington state, they felt like the governor just wanted to show them the door.
Unfortunately, Boeing is not the first or the last company to venture into a friendlier political jurisdiction that is more beneficial for businesses.
A hostile business climate ensures that other companies move too
It’s not just a manufacturing company’s problem. Last year, financial giant Charles Schwab announced a plan Leave your 50+ year home base in San Francisco for Texas with lower taxes and regulation.
JPMorgan Chase has been reviewing plans to move out of Manhattan. Yes, that would be an unusual move for a bank with a money center, but one that could work in the post-Covid era and remote working.
When jobs flee these high-tax, high-regulation states like New York, Washington, and California, workers go with them.
Migration trends show a significant population decline in these states towards places like Tennessee, Texas and Florida. In addition to a friendlier business climate, property prices and personal tax rates tend to be lower.
A great migration is underway, from states with high barriers to opportunity and progression to lower ones. This is true on both a personal and a business level.
The real question is: will this migratory population Vote for the same hideous policies that tainted economic opportunity in their old states? In this case, today’s cheap states could ultimately also become hostile to business.
Disclaimer: This article reflects the author’s opinion and should not be viewed as investment or trading advice to CCN.com. The author has no investment position in the above securities.