In The Northwest: Boeing shows it's just another rootless corporation

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Joel Connelly

In The Northwest: Boeing shows it's just another rootless corporation

Friday, March 23, 2001

By JOEL CONNELLY
SEATTLE POST-INTELLIGENCER COLUMNIST

ALASKA AIRLINES' FLIGHT 455 was heading back into a Boeing-shocked Seattle Wednesday when it flew low over Weyerhaeuser's corporate headquarters in Federal Way. As I looked out the window, the giant American flag fooled me momentarily into believing we were above a car dealership.

Thinking about Boeing, and then seeing Weyerhaeuser caused a mental light to switch on. Recalling what the big "W" has been devouring in nearby cities put in perspective what its 85-year-old neighbor on the Duwamish is about to do to Seattle.

Not long ago, Weyerhaeuser took over British Columbia's forest giant, MacMillan Bloedel. It is attempting a hostile takeover of Portland's Willamette Industries. It goes to make a basic point about today's global economy: Multinational corporations have no permanent homes, only permanent interests.

They will migrate where and when they want to, tradition be damned. Breweries have abandoned Milwaukee. All tire makers but one (Goodyear) have laid down a patch to get out of Akron. General Motors has largely fled from Flint. Chrysler answers to a headquarters in Germany.

In turn, Rupert Murdoch has moved around the globe, lowering news and broadcasting standards successively in Australia, Great Britain and the United States. The knowledge that Murdoch became an American citizen tempers my pro-immigration views.

Hence, 85 years of roots in Seattle don't count when stacked up against Boeing Chairman Phil Condit's need to take 12 to 15 trips a year to Washington, D.C., and head a company that has taken over major competitors based in St. Louis and Southern California.

A second point flows from the first: In the world of multinational corporations, permanent profits count for more than permanent products.

The main public image of Boeing is that of 747s flying past Mount Rainier. But its growth largely depends on defense and space, and perhaps the "missile shield" on which President Dubya promises to spend many billions.

Condit was frank about this: "Simply put, we intend to run Boeing as a business that has the flexibility to move capital and talent to the opportunities that maximize shareholder value."

Nothing new about that. In the 1970s, Weyerhaeuser discovered that it could make more money by moving logs around the mills than through them. Adopting a policy marvelously named "cash flow forestry," Weyerhaeuser cut down old-growth trees, exported the logs to Japan, and used the capital to expand from Arkansas to Borneo.

A third point becomes clear: Actions by local politicians don't have a whole lot of influence on global corporate decision-making. In Boeing's case, no amount of pandering is likely to change Condit's mind, and sucking up to Boeing will only harm the reputation of this region.

It was surreal, watching KING 5 News on Wednesday night, to hear Margaret Larson talking about Boeing possibly needing "tax breaks" to stay headquartered in Seattle. Boeing has enjoyed a stranglehold over state tax policy for a half-century. Its only major political defeat came in 1958, when company Chairman William Allen tried to pass a right-to-work initiative.

The truth is, Washington has given Boeing all the backing any multinational could ever desire. Sen. Patty Murray was Congress' leading Democratic backer of giving permanent normal trade status to China, a major Boeing customer. The Aerospace Machinists broke ranks with the rest of organized labor to support China's entry into the World Trade Organization.

Boeing once needed our politicians. Sen. Warren Magnuson assisted with the sale of 707s to Northwest Airlines, and helped persuade Dwight Eisenhower to buy the passenger jet that became Air Force One.

In today's global economy, however, Boeing has grown bigger than the sum total of its American political assets.

A liberal Washington, D.C., think tank called the Institute for Policy Studies recently used data from establishment and conservative sources -- the World Bank and Forbes magazine -- to draw up a chart of "Corporate vs. Country Economic Clout." Of the top 100 players, 51 are corporations and 49 are countries.

Boeing ranks 83rd, its total sales virtually equaling the gross domestic product of a major oil-exporting nation -- Algeria -- and slightly exceeding that of Hungary.

My fondest hope is that Boeing will continue to make the world's finest passenger jets in Everett and Renton. We grew into an international city largely because of Boeing. Of the state's $46.5 billion worth of exports in 1999, aircraft amounted to $23.869 billion.

Still, we would be an international city without Boeing. The Puget Sound area is a major gateway for imports as well as exports. We are shipping out other stuff, from computers to wheat, from automatic data processing machines to forest products. We are a so-called transactional city where information is exchanged and important meetings are held. Seattle has 21 foreign sister cities.

In the meantime, assuming Boeing's brass moves to Chicago, may the winter of 2001-2 bring record blizzards and runway closures that leave Phil Condit struggling to get in and out of O'Hare.

P-I columnist Joel Connelly can be reached at 206-448-8160 or joelconnelly@seattle-pi.com