Boeing seems to be retaliating against House Majority Leader Rep. Kevin McCarthy (R-CA) for leading the effort to defund the Export-Import Bank by announcing several hundred California job cuts.
Boeing said the cuts at its Southern California-based satellite division were needed after a new $300 million electric-powered satellite ordered by Bermuda-based ABS, a global satellite operator, was recently canceled because the customer was no longer able to obtain Ex-Im Bank financing. Most of the employees affected by the lay-off work in El Segundo, California, according to a Boeing spokesperson.
Conservative House Republicans leaders have complained for years that Ex-Im financing is one of the most egregious examples of crony capitalism. U.S. Satellite operators and airplane leasing companies were encouraged to move to tax havens, like Bermuda, because they could still access billions of dollars of U.S. tax-payer subsidized financing through the Ex-Im Bank.
A Boeing spokesperson told the LA Times: “Many of Boeing’s international customers rely on Ex-Im Bank financing to purchase commercial satellites and airplanes,” she said. “In the absence of Ex-Im, Boeing may need to serve as the lender of last resort, but there are real limits to how much of this the company can do.”
Breitbart News sources replied that conservative House members continue to oppose Ex-Im financings because only huge and politically connected multi-corporations, like Boeing, can get access to the cheap money.
The bank’s charter expired July 30 after the House Republican leadership prevented a floor vote to extend it. Although taxpayers do not directly lend money to the Ex-Im Bank, Congress for decades has provided federal government guarantees that backstopped the bank with the full faith and credit of taxpayers.
Boeing already had a history of exiting California. The company permanently laid off 18,332 of its 35,000 California workers over the last decade.
In June, Breitbart News reported Boeing’s Long Beach liquidation sale, conducted by Heritage Global Partners. That represented the end of an era for McDonnell Douglas, which merged with Boeing in 1997. In 2010, the company’s C-17 military cargo plane provided 14,000 California jobs before shutting down completely last year.
For over seven decades, the 1.1-million-square-foot aircraft assembly plant dominated Long Beach’s landscape and economy. The Douglas Aircraft Company, forerunner to McDonnell Douglas, began supplying Air Force planes from the site in 1941, just before the U.S. entered World War II. The final plane produced in Long Beach was the C-17 Globemaster III—a monstrous four-engine military cargo jet.
With Military aircraft orders starting to dry up and the 2008 to 2010 hammering Long Beach’s economy, Boeing was still willing to offer Long Beach unionized employees a 3.4 percent pay raise. But Boeing argued that it wanted a lower company pension contribution and higher employee medical plans co-pays to remain competitive against Europe’s Airbus.
Although U.S. orders for the $240 million plane had ended in 2008, the company had started to be successful selling C-17s for fleets in Britain, Australia, Canada and just received a six-plane order from the United Arab Emirates to be delivered in 2012.
But on May 12, 2010, 80 percent of the 5,000 members of the United Auto Workers Local 148 voted against the company’s offer and went out in their first local strike against Boeing in 25 years. Workers with picket signs lined Lakewood Boulevard 24 hours a day to shout epithets at company management and “scab” at workers who crossed the picket lines.
Industry analysts were appalled that the UAW would walk out. The strike ended a month later, but talks of shutting down the site took place over the next four years. The plant’s final closing last spring ended aircraft manufacturing in California and caused about 3,800 additional job losses in and around Long Beach.