Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

90 responses to “Poll: If Boeing leaves the Puget Sound by 2030, the area will sustain…”

  1. Kary L. Krismer

    RE: The Tim @ 1 – Yes, I mean RTW states. They are largely economic backwaters, with the exception of FL, AZ and maybe TX. And FL might only be different due to tourism and government.

    You do not create a thriving economy by creating conditions where your citizens do not earn much money.

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  2. scotsman

    Ouch.

    I know some feel that Seattle, or even more broadly western Washington, is the only place anyone with education, taste, and a hint of class would live and work. But somehow the other 98.5% of the U.S. population has come to a different conclusion, and finds such hell-holes as SC not only livable, but desirable. Go figure.

    Boeing started in Seattle, not because the NW was a hotbed of aeronatical expertise, but because this guy named Boeing lived here at the time. As a mature company facing a variety of issues affecting their competitiveness, a move is probably in order. Cheaper costs, better transportation, a more central location, closer to their customer base, all are factors.

    What happens to Seattle when in effect half of our twelve largest companies decide to move out? It will hurt. And my money will be on a continued fall in housing prices. But think of the beautiful wildlife park the greenies can build on the land Boeing used to occupy! Let’s hope they remember to put in a light rail stop…

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  3. Kary L. Krismer

    BTW, I’m not sure if you saw my post today about the Times article today, but using Boeing’s own numbers there was no way they would add a second line here because they’re already doing it, and it will be running through at least 2013, at least two years after the SC line is started up. Our two lines will be creating 7 planes a month (including the new larger model which will be produced here exclusively) and the SC line only 3 planes a month. It doesn’t sound like there was any way they’d get to 10 planes a month here.

    That of course assumes you believe anything Boeing says, which is a questionable place to start.

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  4. scotsman

    RE: Kary L. Krismer @ 2

    “You do not create a thriving economy by creating conditions where your citizens do not earn much money”

    Kary, there is so much you have backwards in terms of economic understanding I don’t know where to start. You can’t see your hand in front of your face. How many high paying jobs do we have in Seattle when Boeing leaves? What kind of “thriving economy” are we left with?

    What comes first- the job, or the thriving economy? You should be in government, not real estate.

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  5. Kary L. Krismer

    By scotsman @ 3:

    Ouch.

    I know some feel that Seattle, or even more broadly western Washington, is the only place anyone with education, taste, and a hint of class would live and work. But somehow the other 98.5% of the U.S. population has come to a different conclusion, and finds such hell-holes as SC not only livable, but desirable. Go figure.

    The vast majority of people live in right to work states. That’s because that’s where high paying jobs are created.

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  6. Kary L. Krismer

    RE: scotsman @ 5 – Well, I don’t think much of your understanding of economic issues either, so I really don’t care that you think I’m thinking backwards. It would bother me more if you agreed with me.

    I guess in your world there’s a ton of economic investment in machinery and equipment in places with low wages, and they’re producing a ton of stuff. Of course it’s all sold at swap meets for under $5.00 an item. And the people making and selling the stuff are all living in poverty. But that’s fine. Low wages are clearly the solution.

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  7. scotsman

    RE: Kary L. Krismer @ 7

    Um, it’s called static verses dynamic analysis. You seem to be stuck on static, when most often it’s the movement on the margins that’s important. Boeing moving is a rebalancing, a move to make more efficient use of the available resources. In the long run the whole world benefits, but you have to think longer term than just the present. It’s the process that got us out of caves and into 4,000 square foot homes. But you seem to be struck in some region-centric liberal workers-are-screwed world. But of course, no one can predict or know that. ;-)

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  8. Kary L. Krismer

    RE: scotsman @ 8 – You seem to be forgetting that I’ve been saying I think the decision to have a second line elsewhere is a good thing. It’s moving it to SC I have a problem with. I really doubt that’s the only place in the country where you could have a new complex built within 2 years.

    But as to your point, that’s simply sort of like the machines displacing employees I was talking about yesterday. As companies move from higher cost places to lower cost places over the long run it will drag the lower cost place up. There will be some pain in the higher price places, but eventually they’ll all be splitting part of a larger pie. But you don’t get there as quickly , if at all, with policies like in RTW states, because there is less incentive for companies to utilize labor efficiently in such states.

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  9. David Losh

    I have always been a Union supporter.Wal Mart is the perfect example of a corporation that does nothing for any one except for the owners.

    We have become a Wal Mart nation.

    As long as Microsoft was turning out millionaires they were a great company. Now they are just swindling as many grubby dollars as they can. A company pumping in dollars to the Gross Domestic Product is worth something, but better than living wages is what will give us sustainable economic expansion.

    Let’s look at bank profits, which is my current pet peeve. It sounds great, and suckers billions of dollars into the stock market. Stock prices go up and management takes millions of dollars in bonuses. When the balance sheets are actually tallied it will just be another crisis.

    So all those teller jobs, or personal bankers, or branch managers looking for a fast track of advancement are just paying bills, churning dollars, making management wealthy.

    The idea of capitalism is that we all get a chance, an opportunity, or share in the capital of the system. What we have instead is kingdoms with lords and masters.

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  10. David Losh

    RE: scotsman @ 8

    Funny!

    “it’s the movement on the margins that’s important”

    I’m going to get that tattooed on my butt.

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  11. scotsman

    RE: Kary L. Krismer @ 9

    It’s a bit of a reach to say that companies won’t utilize labor efficiently just because it’s cheaper. It’s a marginal move, not a reinvention of the whole- companies are still constrained by competition, resource availability, legal structures, etc. and must make the best of whatever situation they find themselves in. And the facts suggest that right to work states are blowing the union states away in this new world order. From Wiki:

    “A March 3, 2008 editorial in The Wall Street Journal compared Ohio to Texas and examined why “Texas is prospering while Ohio lags”. According to the editorial, during the previous decade, while Ohio lost 10,400 jobs, Texas created 1,615,000 new jobs. The article cites several reasons for the economic expansion in Texas, including the North American Free Trade Agreement (NAFTA), the absence of a state income tax, and right-to-work laws”

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  12. Kary L. Krismer

    RE: David Losh @ 10 – I think I may actually agree with most all of that.

    What it reminds me of though is that unions actually result in a more efficient use of resources. The bargaining position of employee/employer is too heavily weighted on the employer, and the unions help balance that out. To counter that, companies band together, such as happens locally with grocery stores and Allied Employers.

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  13. Helmut

    By David Losh @ 10:

    The idea of capitalism is that we all get a chance, an opportunity, or share in the capital of the system. What we have instead is kingdoms with lords and masters.

    No, socialism is the system you’re thinking of. Capitalism is the system where there are no minimum wages, there are no caps on salaries and if you fail, your business ceases to exist, your assets are liquidated and the proceeds used to pay your outstanding debts.

    “…private ownership of the means of production, creation of goods or services for profit in a market, and prices and wages are elements of capitalism…”

    By David Losh @ 10:

    I guess in your world there’s a ton of economic investment in machinery and equipment in places with low wages, and they’re producing a ton of stuff. Of course it’s all sold at swap meets for under $5.00 an item. And the people making and selling the stuff are all living in poverty. But that’s fine. Low wages are clearly the solution.

    You mean like China? Clearly they have extraordinarily high wages, and produce nothing as a consequence right? Wait, no that’s not actually correct. If I remember correctly China is that communist country, with the economic system that resembles a free market more than the US. Also, I seem to recall that most of the money we’re squandering is on loan from China. Feel free to correct me and prattle on about how our standard of living is so much higher than anyone has in China, of course, much of our high standard of living is on loan from China.

    I’m with you though, we should just increase the minimum wage to say, $400/hr and mint a whole new batch of millionaires who will pull us out of this economic slump. Then we cap prices on groceries, gasoline and imported goods to something we feel is reasonable and we’ll all be totally rich. All we have to do is convince China to loan us the money to do it, which should be easy seeing as how they are a bunch of uneducated peasants who sell their goods for $5 at the local walmart flea market.

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  14. Kary L. Krismer

    RE: scotsman @ 12 – Well again, I excluded Texas as being an economic backwater, but I think part of that might be behind those numbers, depending on what time period they were using, they might have been recovering from a significant economic decline.

    Oh, and on the topic of RTW states, the wife was given the option of moving to three RTW states: FL, TX and AZ. AZ was the only one that was acceptable to us, TX would have been second, and FL no way in hell. Fortunately though, we never moved. The timing would have been horrible.

    Finally, I guess we know why Boeing didn’t move it’s headquarters to Texas! No state income tax! ;-)

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  15. scotsman

    RE: David Losh @ 10

    “I have always been a Union supporter.Wal Mart is the perfect example of a corporation that does nothing for any one except for the owners. ”

    Why am I not surprised?

    There is plenty of evidence that by reducing prices for the masses Wal Mart has done more to help the poor than any other factor over the last decade. And who have they hurt? Why, those rich small business owners who used to rule over the small towns of America, now displaced by a more efficient, lower cost model for the masses. I would think you would be Wal Marts biggest fan. But it’s never enough, is it? Wal Mart doesn’t offer free everything to their employees, and they aren’t unionized, so they must be bad. Life’s hard, eh?

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  16. scotsman

    Both of you guys are stuck in some sort of 1960′s la-la land of wacky liberalism while the rest of the world continues to evolve. I’d like to try and help you see the light, but really, it’s uphill, both ways, through the snow,… if ya know what I mean.

    Damm the facts, carry on…

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  17. Kary L. Krismer

    By scotsman @ 15:

    RE: David Losh @ 10 There is plenty of evidence that by reducing prices for the masses Wal Mart has done more to help the poor than any other factor over the last decade.

    Well if you accept things like Edmunds’ analysis of CFC cost, I’d assume there’s a ton of evidence of just about anything. ;-) But I guess the question is whether you’re helping them advance or just survive.

    Your statement reminds me of the old Travels With Farley comic strip where a homeless person thought President Reagan was helping homeless people living under bridges by building more bridges.

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  18. scotsman

    RE: Kary L. Krismer @ 13

    “What it reminds me of though is that unions actually result in a more efficient use of resources”

    No argument there- Boeing is moving out, becoming more efficient, while the unions- having served their economic purpose, are self destructing. Here’s another example of union death-wish behavior. Clearly, they are the sharpest tools in the shed: /sarc

    http://finance.yahoo.com/news/Ford-workers-reject-contract-apf-763992348.html?x=0

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  19. scotsman

    RE: Kary L. Krismer @ 14

    ” I excluded Texas as being an economic backwater”

    Can you please explain to me how Texas is “an economic backwater” when it created 1.6 million jobs over the last decade?

    How many jobs has our own enlightened governer created over the last decade here in the economic nirvana of WA? Is it even a positive number?

    What planet am I on?

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  20. Kary L. Krismer

    RE: scotsman @ 19 – I said I EXCLUDED TX as being an economic backwater, along with FL and AZ. And again, depending on when those numbers are from, it could be just a recovery from a local depression. If our economy had been as weak as theirs was in recent memory, we’d have created jobs too. I don’t think that’s anything to be particularly proud of, however.

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  21. Kary L. Krismer

    By scotsman @ 19:

    RE: Kary L. Krismer @ 14 – Can you please explain to me how Texas is “an economic backwater” when it created 1.6 million jobs over the last decade?

    Apparently it’s professionals and business, education/health and leisure/hospitality. It’s not construction or manufacturing. Those have declined.

    http://www.texasahead.org/economy/indicators/ecoind/ecoind1.html#unemployment

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  22. scotsman

    RE: Kary L. Krismer @ 20

    ” I EXCLUDED TX as being an economic backwater”

    Did you mean “from”, not “as” being an economic backwater? Sorry, you’ve got mixed signals there as I read it.

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  23. James Lupori

    It is not a matter of “if” Boeing will leave Puget Sound.” By 2030 the manufacture of planes will have migrated to Mexico or China or other low cost zones. Why is it that residents of the Northwest ignore the inevitability of this departure? Certainly, there will be elements of Boeing that will remain; however, they will be an insubstantial part of the corporate machinery. We need to quit living in denial. Also, our friends in the South will find themselves in a similar situation once Boeing figures out how to off-shore it’s operations.

    Let’s turn to a couple of quasi-recent examples:

    1) Clothing mills and shoe manufacturing, once the source of much wealth in the Northeast: moved operations to the South and it didn’t take long for that industry to head off-shore……To this day I have good friends in New England whose families and towns are still bemoaning the loss of those jobs.
    2) The automobile industry, due to its lack of perspective (among other things) allowed foreign competition to defeat it in the market place. Now, Detroit is a wasteland and our friends there wonder where all the jobs have gone.

    Instead of spending valuable time and energy worrying if Boeing is going to leave, just accept it. The blame game: Whose FAULT is it, doesn’t really matter at this point. It’s high time our business and governmental leaders put their thinking caps on and replace Boeing with something new. Puget Sound has huge natural and human resources. We must start manufacturing 21st Century products and services (alternative energy, technology, medicines, etc.).

    It occurs to me that when Boeing leaves, a lot of locals are going to wonder why they didn’t support the creation of a new economy based on something other than aerospace.

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  24. David Losh

    Wal Mart takes economic resources out of an area. It will be the same for Boeing.

    The only reason, and I mean only reason, Boeing has an impact in the Pacific Northwest is because of it’s economic concentration here. The money they make stays here, or used to. Small manufacturing supplied them, Christmas Bonuses were spent on new cars, or luxury items. Once the dollars get sucked into some corner of the world you lose that velocity.

    Microsoft is the same. Once the dollars leave the jobs are just paying bills, usually to some place else.

    Unions are just asking for a portion of profits to stay with the workers.

    I would love to have a Union shop. I had a painting company at one time in my early career and worked with the Union to strengthen it. We pay better than average, give vacation, and maternity leave. We know that the people who work with us are our business.

    We have tried and failed repeatedly to offer health benefits and talk with many small businesses who are in the same position. You can always find cheap carp health insurance, but it cancels or raise premiums as soon as you have a claim.

    Huge corporations have a way of offering health benefits as the cost of doing business. It’s an unfair benefit to huge corporations that hinders competition. Wal Mart can well afford to offer total and complete medical and dental, but they do nothing for any one except the owners.

    I shop at Sam’s club and don’t see the cheap prices, only the lack of service.

    I just happen to think: is Wal Mart really the business model you want for an air plane?

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  25. wreckingbull

    RE: James Lupori @ 23 – I actually take a little different view. Continuing deflation and a tanking dollar will lead to a resurgence in U.S. manufacturing. Who knows, in 2030, it very well may be cheaper to assemble a plane in the U.S. than China. Of course this will come hand-in-hand with a severe decline in the standard of living. If you look out the window, it is pretty easy to see that decline has already started.

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  26. James Lupori

    RE: wreckingbull @ 27 – I believe that ship (or plane) has already left the station. I think there’s something deeper going on that will adversely affect our ability to become a country that manufactures products: we have allowed our infrastructure and educational systems to fall into mediocrity. Even if we have the national spirit to start a revolution in manufacturing, it’s going to take 1/2 a generation of investment in our schools and factories to produce a workforce able to compete. In the interim, the rest of the world won’t be waiting around for us. Our advantage here in the NW is that we have a workforce that can be trained more easily to produce products…………….I fear we will squander the opportunity.

    With regard to our standard of living: Americans have been in denial about our phony economy for a long time.

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  27. Herman

    Isn’t manufacturing just screwing some parts together? That form of employment seems destined to go to the lowest cost labor market.

    As I mentioned in a previous post, Seattle is one of the highest cost labor markets on Earth. The only way we can preserve our way of life here is by driving new value so that our high cost labor differentials are justified. Technology and innovation, for example. Don’t waste your energy and tax incentives trying to cling to manufacturing here.

    The loss of the Boeing 787 line is inevitable, and irrelevant to our long term prospects.

    What’s more concerning is Microsoft’s failure to innovate and replace revenue streams that are based on now obsolete software models.

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  28. David Losh

    Here’s an example of local manufacturing that is now gone. A aluminum machine shop in Ballard had standing orders for years in advance for Boeing. They had two engineers on the premises generating models and solving production problems. They bought and could afford the best machines. If there was a manufacturing defect, flaw, or a re-engineering issue it was a phone call.

    Those parts are now made elsewhere. China, as an example, has a 25% defect rate. It used to be 10% until the United States government lowered the regulation standards on imports. When we use Chinese parts the money flows out of the country.

    Quick profits have gotten us into the mess we have today.

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  29. 3rd Generation

    Thanks guys for putting your pictures – emblems near your names. That way we can forward over your little back and forth. Grow up. Be Grateful we all can still have an opinion (for Now anyway – who knows what the next 3 years brings…)

    Suffice to say, I live in Clifornia but have multiple real estate investments (and paid King and Pierce county a lot of property taxes since 1982) in the Great State of Washington. I consider it a privaledge to own property there.

    I really thought California had/has the absolute bottom-of-the bucket in politicians watching out for local major indusries and without question, by anyones measure, the worst senator-Congreespeople ever hatched.

    But alas, I seem to be wrong. . . How/Why are you arguing about unions when your local and state pols let Boeing get away for ANY REASON? Why aren’t you in the streets with pitchforks demanding answers from those accountable Right Now? The pols that allowed this to happen Have to Go next election cycle. Their names, reputation and legacies need to be shamed forever. They should be forced to move pefrmanently to San Fran Freako – and live amongst the lunatic liberals – a fate worse than death in my opinion.

    Puget Sound without Boeing will be renamed Gatesville. I cannot imagine in my worst nighmare having Opie in charge of a whole once-diverse and once thriving region.

    I need a drink. It may be time to cash out soon. Thanks Boeing for helping me exceed my financial expectations with rental real estate over the last 25 years and semi retire early. And to the local and state pols and real estate cartel – Thanks for Nothing.

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  30. scotsman

    RE: 3rd Generation @ 31

    There’s only one problem with your analysis- the vast majority of Washington’s (ruling western) population absolutely love the pols they’ve elected. And they re-elect them time and time again, often by abnormally wide margins. Does the name Jim McDermott ring a bell? How about Patty Murry, on the defense appropriations comittee, yet she couldn’t keep Boeing here. But she will be re-elected, as well all the other liberal anti-business types. If you have large holdings here, it might be time to look at an exit strategy.

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  31. The Kid

    Yeah, you guys tell em’. It’s all those greedy unions demanding a middle class standard of living that are the problem. Screw those guys. We know who the real important people are in this country, don’t we? Those brilliant men and women performing their herculean labors for this country. Like all those smart, brave bankers that did such wonderful things for America, or all those sterling businessmen in medical insurance that have ensured only the WORTHY get health care.
    Wal-Mart? I love Wal-Mart! Don’t even get me started on how smart and responsible they are! I mean they move into an area, take out all those loser locals with their little stores, and put up one nice efficient store, and then give all those undesireable poor people jobs stocking shelves and greeting other poor people. Keeps everyone out of trouble and helps our good friends the Chinese. The only shame is that we have this pesky minimum wage that prevents them from paying people even less. I mean, we all know idiot townies will work for less if it’s the ONLY place to work. We should fix that. Man, I love Wal-Mart!

    Keep preaching the gospel brothers! Ayn Rand would be proud of you guys. God Bless America!

    The Kid

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  32. David Losh

    Minimum Wage, if we could only do away with the minimum wage companies in the United States could make more profits and everything would be great.

    I don’t see a down side to that.

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  33. scotsman

    I’ve always wondered about the anti Wal Mart crowd and how they see themselves relative to the rest of the world. After all, Wal Mart is the biggest company in the U.S. A lot of people must be shopping there and finding it worthwhile, or they wouldn’t keep going back. Are they the same ones who complain Wal Mart is tearing the social fabric of the country apart?

    To me it’s like bill Gates Sr. or Warren Buffett complaing that taxes on the rich are too low while their accountants look for every deduction and break they can find. If they really feel that way why don’t they just send a big fat check to .gov and be done with it? Why do they want to take from someone else what they themselves won’t give up? Why do Wal Mart haters want to increase the cost of living for others by denying them the opportunity to find a deal at Wal Mart?

    Come on out, lurkers- join the group, speak up, don’t just bit*h though, offer your solutions!

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  34. The Kid

    RE: scotsman @ 35
    Okay, regardng Wal-Mart it’s a legit question, and you deserve a legit answer. It’s quite simple.

    Saying that Wal-Mart most be beloved, because they are so big, and so many people shop there is like saying “J.P. Morgan must have been a nice man, look at how many people used his railways!” It’s not like anyone had much of a choice, most of the time.

    Wal-Mart offers low low prices, so poor people can afford goods, right? And this is good, according to you. I have no problems offering people low prices, I really don’t. Here’s the rub.

    Wal-Mart pays such miserable wages to it’s 1.3 million employees that they are forced to remain in poverty. You may believe it to be simple to get a better job, but when Wal-Mart is the only player in town, it gets a little rough.
    They are totally capable of paying better wages. Much better wages, but they choose not to, instead making obscene profits at the expense of an enormous number of people.

    They are not offering some kind of social service and turning an honest profit off of it. In addition, they blow millions of dollars a year on lobbying, legislation, and outright intimidation to attempt to keep wages depressed.

    Yes, alot of people shop there. This is because in the smaller towns in America, there is simply no other option. Nowhere else to buy goods. You may want to spend some time researching their business tactics. They are not ethical. The typical Wal-Mart associate makes somewhere around $10k a year. Well under the poverty line. That is unacceptable behavior for a multi billion dollar company. They could pay people a living wage. They choose not to. They could ensure that the products that they sell are being manufactured in at least humane conditons if nothing else. They choose not to.

    That, in a nutshell, is the problem with Wal-Mart. They are America’s largest employer, and they are essentially a sweat shop. If you don’t see a problem with this, you’re entitled to your opinion. Just don’t expect a hell of alot of people to agree with you.

    The Kid

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  35. AMS

    RE: David Losh @ 34 – Clearly no downside to pushing the minimum wage down. Think of how much better off we all will be!

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  36. doug r

    RE: scotsman @ 3

    I guess it depends on who they think their customers are. If they want military contracts selling expensive “toys” that aren’t really necessary, then moving to old confederate states makes sense. If they really want to build the next generation of transportation connecting the rest of the world’s populations, then staying on the Pacific Rim makes sense.

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  37. David Losh

    RE: scotsman @ 35

    Bill Gates Sr. and Jr, along with Warren Buffet are exactly the problem with American business.

    They are exactly why the Chinese are such huge players in the global economy.

    We use the term market dominance and in China it’s called government owned and or controlled businesses.

    Telephonica is the best global example of market dominance.

    Whether our lives are dictated to by our government or huge corporations it’s still just wage slavery.

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  38. Ira Sacharoff

    “Come on out, lurkers- join the group, speak up, don’t just bit*h though, offer your solutions! ”

    You probably meant ” lurkers or anybody except Ira”, but…
    My solution to Wal Mart?
    Nationalize ‘em. Make them ” America’s Store.”
    I spent some time in Northwest Arkansas, where the corporate headquarters is, and lemme tell you, the Walmart executives sure ain’t slaves like the employees in the stores. All kinds of fancy houses, and that once sleepy town of Bentonville is eerily similar to this town around here, Redmond, Washington.

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  39. willcasp

    RE: David Losh @ 30

    Higher defect rates are not necessarily a bad thing, provided that the expense of the repair/destruction is balanced out. This is an equation that businesses must deal with.

    Sometimes the costs of making everything correctly the first time are significantly higher than making 75 of them right, and then either repairing or chucking the 25 that are not.

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  40. willcasp

    By scotsman @ 12:

    RE: Kary L. Krismer @ 9

    It’s a bit of a reach to say that companies won’t utilize labor efficiently just because it’s cheaper. It’s a marginal move, not a reinvention of the whole- companies are still constrained by competition, resource availability, legal structures, etc. and must make the best of whatever situation they find themselves in. And the facts suggest that right to work states are blowing the union states away in this new world order. From Wiki:

    “A March 3, 2008 editorial in The Wall Street Journal compared Ohio to Texas and examined why “Texas is prospering while Ohio lags”. According to the editorial, during the previous decade, while Ohio lost 10,400 jobs, Texas created 1,615,000 new jobs. The article cites several reasons for the economic expansion in Texas, including the North American Free Trade Agreement (NAFTA), the absence of a state income tax, and right-to-work laws”

    Name a third world country, and you have a case for companies utilizing cheap labor inefficiently just because it is cheaper.

    The way you beat cheap labor is automation. Provided you can justify the expense of the automation.

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  41. willcasp

    RE: The Kid @ 36

    Simple lesson to learn:

    Public companies are in business to service the needs of their shareholders.
    Public companies are NOT in business to provide jobs. Labor is a means to an end.

    Once you accept that, and learn how to play within those boundaries, you will be successful.

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  42. Tim McB

    RE: willcasp @ 43

    This line of reasoning is why middle America is in a wholesale state of decline.

    Henry Ford stated “I will build a car for the great multitude.” In October 1908, he did so, offering the Model T for $950. In the Model T’s nineteen years of production, its price dipped as low as $280. Nearly 15,500,000 were sold in the United States alone.

    In 1914, Ford began paying his employees five dollars a day, nearly doubling the wages offered by other manufacturers. He cut the workday from nine to eight hours in order to convert the factory to a three-shift workday. Ford’s mass-production techniques would eventually allow for the manufacture of a Model T every 24 seconds.

    Ford believed if you paid workers well enough, they would buy the products they made. Now that’s sustainability. Too bad we don’t think that way today. Ironically Ford’s the only major American car company left today.

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  43. Markor

    By scotsman @ 35:

    To me it’s like bill Gates Sr. or Warren Buffett complaing that taxes on the rich are too low while their accountants look for every deduction and break they can find. If they really feel that way why don’t they just send a big fat check to .gov and be done with it? Why do they want to take from someone else what they themselves won’t give up?

    I see no contradiction with a rich person wanting to minimize their own taxes while thinking that the taxes on the rich are too low. That rich person alone paying extra is unfair, whereas every rich person paying extra is fair. Presumably Buffett would give up more if the law required it.

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  44. willcasp

    RE: Tim McB @ 44

    You just supported my point. Henry Ford was acting in the interests of his shareholders. The fact that his employees benefitted from that was a side effect.

    On the Walmart topic…. Walmart only exists because there is a demand for its “service”. The American Consumer wants lots of stuff. They want it cheap. Walmart meets this need. The side effect of this is that it is putting us in a race to the bottom.

    If folks made a choice to have less, but of higher quality (yes, it is a choice), then Walmart would either start selling higher cost and better quality goods, or they would go out of business.

    Don’t fault Walmart for seeing a demand and meeting it.

    You want cheap goods, then expect to be paid in cheap wages to produce them.

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  45. Markor

    RE: willcasp @ 43

    OR the people can, via their gov’t, change the boundaries so that they are not so much at the mercy of capitalism.

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  46. Markor

    By willcasp @ 46:

    Henry Ford was acting in the interests of his shareholders. The fact that his employees benefitted from that was a side effect.

    I doubt most other shareholders agreed with his decision re wages at the time, or afterwards for that matter.

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  47. willcasp

    RE: Markor @ 48

    Had it not worked out, the prudent move would have been for the shareholders to remove him. Lucky for him, it did at the time. Not to mention, there were not that many shareholders in those days. Stopped his employee turnover problem cold.

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  48. Markor

    RE: willcasp @ 49

    Well he was the majority shareholder then, so couldn’t have been removed against his will. Ford realized that higher (than what market would bear) wages would be a good thing for the company in the long run. Seems that most major shareholders nowadays disagree.

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  49. willcasp

    RE: Markor @ 50 – He was one of the sharholders, along with the Dodge brothers, and a couple of others. The issue that folks are quoting here is after the fact marketing spin. Ford had a real problem with employee turn over. One number I read was that he had to hire 300 people to fill 100 positions, due to turn over. Raising wages was done to hopefully resolve the turnover problem. It did resolve that problem. The fact that it made his employees consumers of his cars, I think was a nice after affect.

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  50. grumble

    By scotsman @ 19:

    RE: Kary L. Krismer @ 13

    “What it reminds me of though is that unions actually result in a more efficient use of resources”

    No argument there- Boeing is moving out, becoming more efficient, while the unions- having served their economic purpose, are self destructing. Here’s another example of union death-wish behavior. Clearly, they are the sharpest tools in the shed: /sarc

    http://finance.yahoo.com/news/Ford-workers-reject-contract-apf-763992348.html?x=0

    Hey Unions are great! – if you’re in the Union. You can be a stagehand and literally, earn 400-500k+ per year. More than most wall street bankers out there, even with their bonuses.

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=acb2_wcYGOUE

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  51. Markor

    RE: willcasp @ 51

    Ford said “My ambition is to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting the greatest share of our profits back in the business.” Dodge disagreed with that strategy and sued. The court sided with Dodge and Ford had to pay an extra dividend.

    Arguably Ford was doing what was best for the company in the long run. Nowadays companies seek to optimize the cannibalization of their customer base. Where that leads is clear: a third-world country and all that entails. It’s not the companies’ fault so much as the voters’, however.

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  52. Markor

    RE: grumble @ 52

    So a stagehand earns $500K while CEOs of corporations bailed out by taxpayers earn $10 million+? What am I supposed to be learning again?

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  53. Kary L. Krismer

    By The Tim @ 26:

    By Kary L. Krismer @ 13:
    What it reminds me of though is that unions actually result in a more efficient use of resources.

    Yeah, definitely. In fact, that’s probably how Boeing earned the nickname “The Lazy B.”

    Bad management. Unions do not mean less work unless management allows that.

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  54. Kary L. Krismer

    By scotsman @ 19:

    RE: Kary L. Krismer @ 13

    “What it reminds me of though is that unions actually result in a more efficient use of resources”

    No argument there- Boeing is moving out, becoming more efficient, while the unions- having served their economic purpose, are self destructing. Here’s another example of union death-wish behavior. Clearly, they are the sharpest tools in the shed: /sarc

    http://finance.yahoo.com/news/Ford-workers-reject-contract-apf-763992348.html?x=0

    LOL. Ford just announced a $1,000,000,000 quarter for earnings. How stupid would the union members have had to been to make concessions? Maybe if they owned enough stock it would make sense, but otherwise, no.

    The only stupid employees are the ones at Boeing in SC who voted out the union in a right to work state. That is just about as stupid as you can get, since you get the benefits of the union without having to join or pay for it. That’s IQ way under 100 type of stupid.

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  55. grumble

    By Markor @ 54:

    RE: grumble @ 52

    So a stagehand earns $500K while CEOs of corporations bailed out by taxpayers earn $10 million+? What am I supposed to be learning again?

    I guess 500k is too low a salary for you, but I think the vast majority of people who could do that work would jump at the opportunity.

    Much harder to become a CEO than a stagehand…

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  56. Kary L. Krismer

    As to Wal-Mart, clearly a great retailer. I recently saw them advertising one of the areas they excel in. Motor oil for cars. If you go to Shucks they’re likely to be out of 5W30 in the brand/type you want, where Wal-Mart will have it in stock both in quart and 5 quart bottles. And it’s also less expensive there. I think they might even beat Costco on Mobil-1 pricing.

    That’s about all I go there for because the Renton store is a mess. But I did once need a part for a gas grill, and they had better inventory than HD or Lowes. But I wouldn’t call either of those great retailers. I still miss Eagle.

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  57. Markor

    By grumble @ 57:

    I guess 500k is too low a salary for you, but I think the vast majority of people who could do that work would jump at the opportunity.

    Yes, $500K is a great salary for a stagehand if you can get it. What am I supposed to be learning? Let the CEOs be in a 90% tax bracket and we should see more highly paid stagehands.

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  58. Markor

    By Kary L. Krismer @ 56:

    LOL. Ford just announced a $1,000,000,000 quarter for earnings. How stupid would the union members have had to been to make concessions? Maybe if they owned enough stock it would make sense, but otherwise, no.

    Good point!

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  59. grumble

    By Markor @ 59:

    By grumble @ 57:
    I guess 500k is too low a salary for you, but I think the vast majority of people who could do that work would jump at the opportunity.

    Yes, $500K is a great salary for a stagehand if you can get it. What am I supposed to be learning? Let the CEOs be in a 90% tax bracket and we should see more highly paid stagehands.

    This was related to the above discussion about unions. If you think 500k is a reasonable salary for stagehands, then you would have no problem with the unions. However, if you think having all 5 fulltime stagehands at a theater earn 400-500k+ is an unreasonable amount, then that would be an argument that unions are promoting an inefficiency in the marketplace, that could be filled by equally skilled workers earning a “fair” wage.

    Having a union that demands a certain wage “or else we shut you down” is clearly distorting the marketplace.

    This has nothing to do with CEOs (who I also agree are too highly paid).

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  60. Everett_Tom

    By willcasp @ 42:

    Name a third world country, and you have a case for companies utilizing cheap labor inefficiently just because it is cheaper.

    The way you beat cheap labor is automation. Provided you can justify the expense of the automation.

    This hasn’t been my experience. In my job as a design engineer I’ve been to China a few times to visit our suppliers. They are doing all the of same things we do here to utilize labor as efficiently as possible, mainly because they are competing with other low cost suppliers with access to the same workforce.

    Also, at least in the two fields I’ve worked in, automation hasn’t been the answer. Automation only seems to help if what you make either has a very high volume. And it turns out you can automate in low cost regions too…

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  61. Markor

    By grumble @ 61:

    Having a union that demands a certain wage “or else we shut you down” is clearly distorting the marketplace.

    I’d like to buy a computer for $100 today, but Best Buy tells me “take our price or leave it.” Clearly they are distorting the marketplace!

    It just looks like a highly successful union to me, assuming they’re abiding by the law.

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  62. grumble

    By Markor @ 60:

    By Kary L. Krismer @ 56:
    LOL. Ford just announced a $1,000,000,000 quarter for earnings. How stupid would the union members have had to been to make concessions? Maybe if they owned enough stock it would make sense, but otherwise, no.

    Good point!

    Is there something fundamentally different about an autoworker who happens to be working for Ford? Why should a Ford employee earn more than a GM employee for doing the exact same job?

    Just wondering how the union is justifying this to the ones at GM/Chrysler who DID take the concessions.

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  63. grumble

    By Markor @ 63:

    By grumble @ 61:
    Having a union that demands a certain wage “or else we shut you down” is clearly distorting the marketplace.

    Is there something wrong with that? I’d like to buy a computer for $100 today, but Best Buy tells me “take our price or leave it.” Clearly they are distorting the marketplace!

    If that argument makes sense to you, then there’s no real point continuing this discussion.

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  64. Markor

    By grumble @ 64:

    Is there something fundamentally different about an autoworker who happens to be working for Ford? Why should a Ford employee earn more than a GM employee for doing the exact same job?

    Because the two groups negotiated independently. If they all negotiated as one group then maybe they’d have the same wages.

    If that argument makes sense to you, then there’s no real point continuing this discussion.

    It did.

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  65. Kary L. Krismer

    By grumble @ 64:

    By Markor @ 60:
    By Kary L. Krismer @ 56:
    LOL. Ford just announced a $1,000,000,000 quarter for earnings. How stupid would the union members have had to been to make concessions? Maybe if they owned enough stock it would make sense, but otherwise, no.

    Good point!

    Is there something fundamentally different about an autoworker who happens to be working for Ford? Why should a Ford employee earn more than a GM employee for doing the exact same job?

    Just wondering how the union is justifying this to the ones at GM/Chrysler who DID take the concessions.

    Probably because it was necessary to attempt to save their jobs. Even the creditors had to give something up. When a company isn’t healthy things have to be given up.

    As to the other comment, I’m not sure why you think people working for different companies should be paid the same. Should the union say to the employer: “Your competitor only pays this, so that’s all we want.”

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  66. Markor

    If Boeing leaves Puget Sound, or minimizes its footprint here, that doesn’t necessarily mean that the unions here are bad. They’re successful when they maximize their members’ compensation in the long run. That can happen even when the company pulls out. Actually Boeing growing in SC is a sign that the unions here did a good job.

    If Boeing starts to pull out of Puget Sound that will lower property values, which will make Puget Sound more affordable so that new workers can accept lower wages, making Boeing less likely to leave.

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  67. softwarengineer

    Many of You Are Too Young to Remember the 1962 World’s Fair in Seattle

    I was 9 years old and marveled at the prospect of flying cars by 2000 and 20 hr work weeks with automation.

    Those childhood dreams were killed by greed and globalism IMO. If we’d worked to keep world population at 1-2 billion and with everyone on planet earth making like $40K a year, globalism would have helped bring the World’s fair dreams to reality.

    Nope we blew it. We traded a chance for a wonderful “short workweek” utopia for cheap junk at Wamart and a lost industrial base in America, so some CEO can chew on fat cigars. We traded the chance to drive flying cars down the drain and now brag about how wonderful our old fashion overpopulation heaps from Asia are, pathetic.

    We’ve simply lost the fight in America for a shorter work week to the greedy corruptors, and are told to shutup and be glad 50″ plasma TVs are under a $1000 and laptops are $350. “Welcome to Walmart”…LOL

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  68. Markor

    RE: softwarengineer @ 69

    Yesterday in Fred Meyer I walked past an end table that has a gouge in it, exposing the foam underneath the veneer. First time I’ve seen that!

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  69. Kary L. Krismer

    RE: softwarengineer @ 69 – I’m a bit younger, but I remember the Bubbleator (sp?).

    The average person is too stupid to know what they want. In California during the energy crisis the average person wanted to pay a few bucks less on their already fairly small electric bill even if that meant paying more in income taxes, assuming they still had a job after their employer was left to pay more for electricity.

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  70. Kary L. Krismer

    By Markor @ 70:

    RE: softwarengineer @ 69

    Yesterday in Fred Meyer I walked past an end table that has a gouge in it, exposing the foam underneath the veneer. First time I’ve seen that!

    WTF? Did you maybe mean to post that on Twitter? ;-)

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  71. The Kid

    RE: Markor @ 70
    I have a friend who works there. The markup on their furniture is mind boggling. Those sets of leather couches, with the love seat and the coffee table? Cost to them? $64. Sell for? $1800.

    Yeah, it’s pretty cheap chocolate.

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  72. DLS

    It has been been somewhat interesting to follow some, but not all, of this thread. You all have a right to an opinion, and here is mine.

    This year I celebrated 25 years as an engineer with Boeing, mostly in Commercial. I’m looking forward to a chance to transfer to Charleston. Economics are part of it, take a look at the costs of comparable houses. Social issues are the bigger part. This straight white male is tired of left-of-left Socialism. I’m tired of being taxed to death for lefty wet dreams and incompetent local politicians. Charleston held the title of ‘Most Mannerly City’ for some time, perhaps some of the females there are Ladies (of which Seattle has few, if any) and some of the guys have basic manners (which I’ve gave up expecting in SEA).

    All things considered, Charleston may or may not be better than Seattle, but I’m ready to give it a try.

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  73. Kary L. Krismer

    And you guys thought I was bad with my references to SC.

    http://www.seattlepi.com/horsey/viewbydate.asp?ID=2008

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  74. Everett_Tom

    RE: DLS @ 74 – Thanks for sharing… How many other folks that you work with seem to feel the same way?

    RE: Kary L. Krismer @ 75 – I _REALLY_ didn’t like that comic, it seemed really petty. I usually like what horsey does..

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  75. Notorious ART

    RE: Kary L. Krismer @ 56

    1 billion won’t cover the 10.7 billion that is maturing. Wait a minute that would be 4.7 billion in 2011 since they got 6 billion to be extended to 2013. But that’s still 10.7 billion in liablities over the next 3+ years.

    from the WSJ

    http://online.wsj.com/article/SB10001424052748703932904574511112609119436.html

    “After its earnings report, Ford said it aims to raise an additional $3 billion in cash and push back the maturity date of its revolving loan. The company plans to use a convertible-debt offering to generate $2 billion and sell off some of its shares to raise an additional $1 billion, the company said in a statement Monday.

    Ford is also seeking to delay the maturity of its $10.7 billion revolving credit to 2013 from 2011, the company said in a statement Monday. Ford has already secured lender agreements to delay about $6 billion.

    .The move comes after Ford failed to win more cost-cutting concessions from the United Auto Workers. Rank-and-file members soundly defeated the concessions over the weekend, in part because of Ford’s brightening financial outlook.

    I hope that future is as bright as the union thinks, for their sake…..

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  76. scotsman

    RE: Kary L. Krismer @ 75

    The comments are pretty telling- it seems even in Seattle the majority see through the arrogance and regionalism Horsey portrays. I especially like the comment about how they manage to build the F-22 in SC despite the stupidity, etc.

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  77. scotsman

    RE: DLS @ 74

    Heh. Thanks for being a real life example of what I suggested in another thread- that current Boeing employees might well be willing to transfer for the lower living costs, different climate, etc. Too few here acknowledge that not everyone has deep roots in Seattle, and many are willing to move in or out of the area as opportunities change. Life isn’t static, and what’s “hot” today may not even be on the map in 10 years.

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  78. Kary L. Krismer

    RE: Notorious ART @ 77 – Well most companies would probably be underwater if they had to pay off all their debt maturing within a given timeframe. That’s what’s killing the owners of commercial properties right now.

    BTW, if I recall correctly from several years ago, that debt might be convertible.

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  79. Kary L. Krismer

    RE: scotsman @ 78 – Wow, Horsey brings people together, because everyone thinks he’s an idiot! ;-)

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  80. what goes up must come down

    RE: DLS @ 74 – Being a Boeing Engineer myself for 18 years I find this interesting about SC:

    Now that the decision was made, a Charleston affiliate WTMA talk-show had listeners call in to prepare Boeing employees moving into the Lowcountry what to expect.

    “The city’s aesthetically pleasing to the eye. We don’t have skyscrapers. Everything’s close in Charleston, you can walk all the way across town in 30 minutes.”

    “I think it’s a nice place to live. Maybe some of the down side is people are still narrow-minded in many ways.”

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  81. what goes up must come down

    RE: The Tim @ 26 – Wow was that a useful statement, hey Tim the next time you meet someone from Boeing remind them how lazy they are, I am sure in person you will get a non lazy reaction especially from an IAM memeber.

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  82. Notorious ART

    RE: Kary L. Krismer @ 80

    The “surpise” profit they had for the quarter is mostly attributed to the Cash for Clunker program. Auto sales are already falling off a cliff after the program was stopped. I don’t think Ford will be having many “surpise” quarters in the future unless the gov brings back Cash for Clunkers….Bottom line is Ford needs that money for upcoming liablities. The union betting on the future is sooo bright with green shoots, could be a mistake. Why can’t the union work with what is and not with what could be?

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  83. Kary L. Krismer

    RE: Notorious ART @ 84 – 1. They indicated that they would have made a profit without CFC. 2. October sales hardly fell off a cliff–check the news from yesterday.

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  84. softwarengineer

    RE: The Tim @ 86

    There Was An Old Saying Among Boeing Employees in the Late 70s

    20% of the workers do 80% of the work.

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  85. Kary L. Krismer

    By The Tim @ 86:

    However, I do still take issue with Kary’s assertion that they are making a “more efficient use of resources” there than would be possible without a union.

    Well if they aren’t, then that is solely management’s fault.

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  86. what goes up must come down

    RE: The Tim @ 86 – Well it is funny in your previous statement you did make a broad generalization. Man I will never get this anti union crap, yeah it would be nice to go back to the turn of the century and not have any labor laws etc…. yes, those were brought on with the help of unions. Do I believe it is all black and white — nope. But I do know there needs to be a balance. So you passed on Boeing because of 1 persons statement that seems to be real in depth, how did that job at that other company you worked for go what was it again — Genie?

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