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Airplane manufacturer and weapons dealer makes controversial move to Chicago
Martin, Tim Nafziger,
Jeremy Shenk, & Mark Swier
The Boeing Corporation has always been best known for its line of civilian aircraft, the most famous being the Boeing 747. However, beneath the façade of your friendly neighborhood airplane maker lies a grimmer, darker reality. It is the face of a corporation that profits off the carnage and horror of war. Boeing is the world's second leading weapons manufacturer and the main contractor for the Star Wars missile system.
In June 2001, Boeing announced that it had chosen Chicago for its new headquarters. Union leaders were incensed by Boeing's sudden decision to move corporate headquarters. Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers (IAM), which represents some 63,800 Boeing workers worldwide said, “The Seattle community has invested billions of dollars in highways, schools, and other services to help Boeing succeed…If this move indicates any lessening of Boeing's commitment to this city or to the domestic aerospace industry, if Boeing thinks they can run and hide, we have news for them. We will follow Boeing to the ends of the earth, if need be.” IAM District Lodge 751 president Mark Blondin had similar sentiments. “We are outraged at this decision, not to mention the fact that Boeing gave this Union, as well as our Governor and Congressional delegation, only five minutes advance notice before announcing it to the world. It is a sign of disrespect for the workers, the Union and this community. As a Union, we fear this is a sign of things to come and will fight with all our resources to protect every 751 job.”
Chicago Incentives Package
The total incentive package offered by the City of Chicago to Boeing is valued at up to $64 million over 20 years. Up to $41 million will come from the state in the form of tax incentives, relocation assistance, job training and development grants; the city will contribute $23 million, including money to fund a hangar to house Boeing's corporate jet fleet at Midway Airport.
The Chicago Tribune estimated the EDGE (Economic Development for a Growing Economy) credits that Boeing will receive could be worth $22 million over 15 years. Boeing also could receive state grants for 10 years to cover up to half of its moving costs. The city of Chicago is considering building a heliport for Boeing and other downtown businesses that could potentially be built at the Morton building, Boeing's new digs.
Boeing will be exempt from paying rent for 20 years on its headquarters just west of Chicago's downtown Loop. Boeing will pay 35 percent of its taxes and then receive rebates from governmental taxing bodies. The Tribune estimated that a freestanding 300,000 square-foot office building, roughly the amount of space Boeing will occupy, would pay more than $40 million in taxes in the next 20 years.
Illinois Governor George Ryan expects Illinois to get a “110-to-1 return on each dollar” it expends on Boeing-related incentives, citing a study by the Arthur Anderson consulting firm that estimated Boeing could have a $4.5 billion economic impact on the state's economy. However, Greg Mount, an economist with Chicago-based Banc One said any economic impact would be “quite marginal,” and the biggest benefit is the boost Boeing will give to the city's image.
Everything is pure conjecture as to how much money Boeing would bring to the city. The move will only create around 300 to 400 jobs, all of which are management and administrative positions. All of these incentives come from taxpayer money that could be going towards building housing for low-income people or some other purpose that would actually benefit Chicagoans.
Denver's incentive package to Boeing was $13 million to $18 million. Mayor Wellington Webb didn't think it should be higher because “I don't think we should have to pay people to move here.” Obviously George Ryan and Chicago Mayor Richard Daley feel differently.
Boeing's march into the world of the war profiteer has been a long one. It began in 1917 when the U.S. Navy ordered 50 Model C seaplanes from Boeing, launching the company into the world of military aviation. Through the next 60 years Boeing became a major part of the military industrial complex, supplying many of the military's aircraft including the Chinook helicopter, B-52 and B-1 bombers, and the F-15 fighter along with many generations of missiles and rockets. Yet, by the 1980s it looked like Boeing might begin moving out of the weapons business.
However, with the end of the cold war came a new turn of events. In 1993, Secretary of Defense William Perry repealed a 40-year ban on federal subsidies for weapons contractor mergers and acquisitions. This paved the way for Boeing's 1996 acquisition of Rockwell International's space and defense divisions and the 1997 merger with McDonnell Douglas. These mergers come at a high cost to taxpayers—a report in the Nation estimated the subsidies may total as much as $1 billion. Workers were rewarded with thousands of lay-offs, even as Boeing and McDonnell Douglas executives received multi-million dollar bonuses.
Today, Boeing is a military contractor behemoth, second behind only to Lockheed Martin. Boeing's weapons are used in conflicts around the world. Its AH-64A Apache has been sold to Egypt, Greece, Israel, Saudi Arabia, and United Arab Emirates. Israel has used the helicopter in raids against the Palestinians. Boeing's F-15 Eagle has been sold to Israel, Japan, and Saudi Arabia, and its F/A-18 Hornet has been sold to Australia, Canada, Finland, Kuwait, Malaysia, Spain, and Switzerland. F-15's have also been used by the U.S. in the 11-year bombing campaign against Iraq in the enforcement of the illegally imposed “no fly zone.”
In a perverse manifestation of the pursuit of its interests above national or international security concerns, Boeing uses its weapons exports to help perpetuate demand for its future planes. New weapons are developed for the U.S. military. These same weapons are sold to allies around the world. (Often, the potential export market is factored into and helps justify research and development costs.) These weapons exports, in turn, fuel the push for higher and more expensive technology to be developed by U.S. weaponeers to maintain our military superiority. Thus, the military-industrial complex sustains itself by forcing the U.S. into an arms race against itself.
Sometimes agreements are reached to sell planes to foreign countries even before the Commerce, Defense, and State Departments approve an export license. One of the best examples of this cycle is Boeing's F-22 Raptor.
The justification the Air Force makes as to why the U.S. needs the F-22, is, astonishingly, that we've proliferated F-15s (a Boeing plane, remember) and F-16s around the world, so now we need better planes to maintain our advantage in the skies. The ground is already being laid for Boeing's inevitable next-generation fighter. Near the end of the Clinton administration, the F-22 was promised to Israel, even before Congress had agreed to buy any. The F-22 won't even begin rolling off Boeing's production line until later this year.
The Navy is Boeing's partner in this racket, too. As stated above, the F/A-18 Hornet has already been sold to seven countries. Recently, the Pentagon gave Boeing permission to export the latest version of the plane, the F/A-18 E/F Super Hornet, which is the Navy's newest advanced fighter jet. No one should be surprised when Boeing and the Navy trot out plans for a new Super Duper Hornet in a few years and tell us we need it because of all the Super Hornets they've sold around the globe.
Another of Boeing's avenues to profit is through promotion of NATO. Boeing was one of 12 corporations that paid $250,000 to be on a host committee for NATO's 50th anniversary celebration in Washington in 1994. The payoff comes for Boeing whenever a new nation is inducted into NATO. Part of paying the dues is updating the country's military arsenal, a task that Boeing is more than willing to help with.
President Bush's rush to deploy a Star Wars National Missile Defense system has sparked international controversy. However, the corporations behind Star Wars have received little scrutiny. The Boeing Corporation is the “Lead System Integrator” or main contractor on Star Wars. In this role, Boeing doles out sub-contracts to its “competitors” (TRW, Lockheed-Martin, Raytheon, and others) and is responsible for ensuring that Star Wars component systems are successfully developed and integrated. Boeing is developing the Ground-Based Interceptor missile; X-Band Radars; Battle Management, Command, Control and Communications (BMC3); Upgraded Early Warning Radars; the Airborne Laser; and interfaces to Space-Based Infrared System satellites.
Independent physicists from the Massachusetts Institute of Technology and the Union of Concerned Scientists have analyzed the Star Wars radar system and concluded it will not be able to distinguish actual warheads from decoys, chaff, and other countermeasures an attacker would employ to confuse or overwhelm the system. Star Wars testers tacitly acknowledge this; their tests involve a single Mylar balloon decoy instead of the dozens or hundreds they would surely face in an actual attack. Even with the tests dumbed-down to succeed, it took two failed tests and one fluke “hit” (it “succeeded” when the interceptor missile honed in on the decoy balloon that just happened to be in the path of the mock warhead) before a successful test was accomplished on July 14, 2001. It turns out the July test was rigged. In the weeks after the test the Pentagon confirmed that a global positioning satellite receiver had been mounted on the missile allowing the kill vehicle to hone in on it from hundreds of miles away. So much for honesty in testing.
Whether or not Star Wars works, it is still outrageously expensive. Even by the bloated standards of the military, the Star Wars price tag is stupefying. Since the early 1950s, the country has spent over $100 billion on ballistic missile defense, $70 billion of it since President Reagan's 1983 Star Wars speech, with next to nothing to show for it. The Congressional Budget Office estimated the Clinton administration's Star Wars plan at $60 billion, but the Council for a Liveable World estimates that the more robust land-, sea- and space-based scheme favored by President Bush will cost up to $273 billion. Others, including Senate Foreign Relations Committee Chair Joe Biden (D-DE), have said Star Wars could cost up to one trillion dollars. All of that is before the inevitable delays and cost overruns. Boeing's lavish spending on lobbying and political campaign contributions has brought results: the Bush administration is seeking a $3 billion increase for next year's Star Wars budget, bringing the total to $8.3 billion.
The political cost of Star Wars will be far worse—it will re-ignite the nuclear arms race. Russia has clearly stated that its ratification of the START II arms reduction treaty, which would retire several thousand nuclear warheads, would be nullified if Bush opts to deploy Star Wars without Russia's consent. Russia has threatened to beef up its offensive nuclear capability, and could decide to maintain multiple warheads on missiles. Furthermore, U.S. plans for deployment of Star Wars would violate the 1972 Anti-Ballistic Missile (ABM) treaty, which NATO countries voiced strong objections to this spring as the U.S. tried to sell Star Wars to our allies.
Russia and China are also concerned that Star Wars will not be a mere “defensive” system, but could be part of a U.S. first-strike strategy. As U.S. military strategists constantly point out, capabilities rather than intentions should drive defense planning. The proposed Star Wars system could provide the U.S. with an offensive, first-strike capability by negating Russia's or China's retaliatory capacity. The rational response by these countries would be to increase their offensive nuclear forces. The recent pact signed between China and Russia makes this even more likely than before.
The destabilization that would result from a renewed U.S.-Russian-Chinese arms race is a very real threat to countries throughout the world. In contrast, the so-called threat from “rogue states,” such as North Korea, Iran, or Iraq is wildly overstated. In the past few years, the State Department's “rogue state” doctrine has become the centerpiece of the argument for Star Wars. The intelligence community, in an extreme worst-case scenario, cites North Korea as the most immediate threat, possibly having ballistic missiles by 2005. In reality, North Korea has frozen its missile flight-testing program for over two years.
Moreover, during a meeting last year with Russian President Vladimir Putin, North Korean leader Kim Jong Il agreed to completely end his country's missile development program if other countries would send up its satellites. This offer came shortly after Kim's historic summit meeting with South Korean President Kim Dae Jung, which resulted in real prospects for reconciliation between the two Koreas. President Bush dimmed these prospects when he cut off negotiations with North Korea shortly after his ascension to office. As for the other “rogues,” neither Iran nor Iraq has ever flight-tested a missile capable of hitting the United States.
Unfortunately, the Star Wars system is also a Trojan Horse for the U.S. goal of weaponizing outer space. “Dominating the space dimension of military operations to protect U.S. interests and investments” is how the United States Space Command defines itself in its “Vision for 2020.” All kinds of frightening space-based offensive weapons, including lasers, anti-satellite weapons, space planes, and much more are currently on the drawing boards. Boeing, which aims to be the world's unchallenged aerospace giant, is well-positioned to lead the arms race into outer space, unless it is stopped by pressure from concerned citizens.
A Good Corporate Citizen?
The Boeing corporation is the largest U.S. exporter, the second largest weapons manufacturer, and the lead contractor for the Star Wars National Missile Defense program. Its operating revenues for 2000 totaled $51.3 billion, yet the city of Chicago and the state of Illinois felt the need to shell out $64 million to convince Boeing to move there. But is Boeing the kind of neighbor Chicago needs in light of Boeing's long history of corporate mischief?
The aerospace giant has been involved in a number of government scandals, from overpricing parts to outright bribery. On the factory floor, Boeing exposed its workers to toxic chemicals and then denied that it even happened. After 80 years in the Seattle area, Boeing has begun outsourcing jobs, outraging unions. Some suspect Boeing moved to Chicago to get the support of Illinois politicians to push weapons contracts and corporate welfare, and to threaten its unions with “take it or leave it” contracts. Here are just a few of Boeing's scandals.
Labor Relations: In 1987, Boeing introduced fiberglass pre-impregnated with phenol formaldehyde resins into its Auburn, Washington plant. Workers handling the materials were not adequately protected from the toxins and were forced to work overtime while being exposed to the chemicals. As a result of their exposure to phenol formaldehyde, workers have since encountered significant medical problems caused by the chemical exposure. Symptoms include everything from nosebleeds and nausea to impaired vision and brain damage.
In 1994, Boeing agreed to fork over close to $75 million in order to avoid criminal prosecution that, at that time, was the largest non-criminal Pentagon payback case in history. According to government statements, Boeing's settlement included $52 million for overcharging computer-related work, $14 million for overcharging on non-domestic government work, and $9 million for hazardous-waste disposal costs. Between 1998 and 2000, Boeing cut 25,000 Seattle area jobs.
On April 30, 2001, Boeing's largest union, International Association of Machinists and Aerospace Workers District 751, filed a lawsuit against outsourcing jobs in violation of contract guidelines. This case is still pending. In January 1999 Boeing agreed to pay $15 million to 12,000 current and 7,000 former African American workers for their complaints about unfair advancement policies and general mistreatment. During the investigation of this case the U.S. Department of Labor has said that Boeing deliberately withheld information and interfered with the inquiry.
Litigation: In 1989, Boeing ponied up $11 million to settle allegations that it charged too much to put new skins on KC-135 tanker aircraft. The government claimed that “inaccurate information” provided by Boeing caused the Air Force to pay higher prices than it would have paid. In 1974, Boeing settled out of court with the Securities & Exchange Commission (SEC) over payments of $54 million made to 18 countries that subsequently bought Boeing aircraft for a total of $943 million. The SEC also alleged that Boeing spent at least $27 million paying off 7 foreign governmental officials who were involved with Boeing's aircraft sales. Since June 2000, the Justice Department has been seeking an estimated $20 million in damages from Boeing for alleged improper installation of equipment on its AH-64A Apache helicopters. The problem-riddled Apache fleet's latest grounding, which was ordered on June 15, 2001, was the third grounding in the past two years.
In April 2001 Boeing Co. was fined $3.8 million by the State Department for violating export laws. The violations took place during Boeing's negotiations with Australia for the sale of a new airborne radar system. This was not the first time Boeing had gottten into such trouble. In 1998 Boeing paid $10 million dollars to settle allegations it violated arms export control laws. The fine came as a result of an information transfer by Boeing engineers working with Russian and Ukrainian engineers in an attempt to launch communication satellites on missiles fired from Sea Launch, a converted oil rig.
Corporate Welfare: Boeing has fought the $300 million per year subsidies from European countries to Airbus—but Boeing got $2.2 billion in research and development assistance from the U.S. government in 1998.
Money Politics: Like most major corporations, Boeing has spent millions on making its influence felt in Washington, DC. In 1999 Boeing spent $8,200,000 on lobbying expenses. In the 1999-2000 election cycle, Boeing spent $1,763,632 on PAC, soft money, and individual contributions. Among the recipients of Boeing's money were the following members of the House Armed Services Committee: Bob Stump (R-AZ), $5,000; Floyd D. Spence (R-SC), $8,500; Curt Weldon (R-PA), $5,000; Ike Skelton (D-MO), $8,000; John M. Spratt Jr (D-SC), $4,000; Rod R. Blagojevich (D-IL), $500; Lane Evans (D-IL), $1,000; Robert C. Byrd (D-WV), who serves on the Senate Appropriations Committee, received $1,000 from Boeing.
The Environment: Though Boeing is only moving its corporate headquarters to Chicago (for now at least, its manufacturing plants will remain in Washington state, Oregon, and California), a look at its environmental record shows the type of corporate neighbor Chicago is getting. The company admits to producing 40 million pounds of hazardous waste in 1999 and over 55 million pounds the year before. A sampling of incidents from the corporation's last 15 years is enough to give us an idea of its real principles.
In the summer of 1987 Boeing's Renton, Washington plant released high levels of acid into the sewer system and was fined eight different times for not filing the necessary reports or turning them in too late. From November of that same year till August 1992 Seattle cited Boeing's Kent Space Center three separate times for high-level releases of copper into the sewer system. Copper is a toxic metal which is harmful to aquatic wildlife.
In 1988, trichloroethylene was found in Moses Lake, Washington drinking-water wells near a Boeing-owned underground storage tank. Trichloroethylene is a birth defect and cancer-causing solvent. Boeing denied responsibility for the contamination and claimed it had lost records kept on the facility. However, Boeing admitted that the company had dumped trichloroethylene directly onto the ground only two miles from the well. In 1993, the area was made a federal Superfund site.
>From February of that year until February 1989, Seattle fined Boeing's Plant 2 four times for high levels of chromium released into the city's sewer system. On September 21, 1990, a jury found Boeing 50 percent liable for cleanup costs at two toxic waste dumps in King County, Washington State. Though Boeing denied negligence in the case, witnesses said that for 25 years, the company had been warned that the dumping could cause contamination and might be illegal, and that the company should build its own waste-handling facility.
In December of the same year, Boeing was fined $42,500 for not telling the Environmental Protection Agency (EPA) about the release of five toxic chemicals. In January 1992, the EPA fined Boeing a record $334,325 for mishandling solvent-soiled rags and other toxic wastes at its Everett plant. Boeing persuaded the EPA to reduce the fine from a proposed $620,475. In June of the same year, Boeing was sued by the U.S. Justice Department for $11.5 million to help clean a contaminated drinking water well in Tacoma, Washington. Boeing had dumped hazardous waste near the well. Unfortunately, Boeing does not seem to have learned its lesson. In December, the city of Seattle fined Boeing $228,000 for releasing 1,392 pounds of chromium, a toxic heavy metal, into the city's wastewater-treatment system from May to July 1992. Though confessing to the “inadvertent discharge,” Boeing appealed the fine.
On June 3, 1998, saying that The Boeing Co. has a pattern of mishandling hazardous waste at its Auburn facility, the Washington Department of Ecology fined Boeing $148,500 and ordered it to correct its toxic waste problems immediately. On March 7, 2000, a federal judge held Boeing Co. and Cascade Corp. liable for contaminating the city of Portland, Oregon's backup drinking water wells. The city is asking for $6.6 million in damages, but the claim is still pending.
One month later, a federal district court found that Boeing concealed information about exposure to radiation in its California Rocketdyne facility. The court denied Boeing its motion to dismiss loss of consortium and intentional infliction of emotional distress claims brought by the spouse of a former employee, Mario Migliori.
When Boeing announced its decision to move to Chicago, a group immediately began forming to voice opposition to Boeing and its long record of corporate abuse.
“We at the Anti-Boeing Coalition are opposed to Boeing coming to Chicago (or anywhere else for that matter) since they make profits off of weapons used to kill people throughout the world,” said Sister Dorothy Pagosa of Chicago's 8th Day Center for Justice, “Businesses should be responsible not only to profits but to the world around them.”
“Star Wars is a science fiction cash cow for Boeing,” quipped Kevin Kintner, executive director of Illinois Peace Action. “Whether it ever works or not, Boeing will reap billions of our tax dollars, and we'll pay an even bigger price—a re-ignited nuclear arms race and the weaponization of outer space.”
“Boeing exemplifies bad management when it practices racial discrimination, tussles with its union workers, and then lets its executives—like 19th century Chicago industrial barons—flee the scene to avoid accountability,” said Connie Hall, National Affairs chair, IVI-IPO (Independent Voters of Illinois-Independent Precinct Organization), “I believe that the people of Illinois, who are asked to subsidize Boeing's corporate leaders, can take the opportunity to demand their accountability as long as Boeing lives here.” “I oppose the Boeing corporation because they profit from the production of the weapons of war whose only purpose is to cause the death and destruction of others, particularly poor people in Asia, Africa and Latin America,” said Melinda Powers of the Anti-Boeing Coalition.
It's time to send a message to the military-industrial complex to let them know that filling our skies with weapons, bribing our politicians, and choking our rivers with toxic waste is not acceptable. It must be clear that as long as Boeing continues to put profit above people, the environment, and world peace it will not be welcome in Chicago. Z
Kevin Martin ie Executive Director of Peace Action, the country's largest peace and disarmament organization with over 75,000 members, headquartered in Washington, DC. Tim Nafziger, Jeremy Shenk, and Mark Swier are student activists at Goshen College in Indiana.