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Nixon explains why he wants special session for Boeing incentive proposal

In Economy

3:25 pm on Wed, 11.27.13

Gov. Jay Nixon told reporters it's possible that a special session to consider an incentive package for Boeing could come in a matter of “days, not weeks.”

Jay Nixon
Jay Nixon

The statement came after the Democratic chief executive told business leaders in Chesterfield that the possibility of nabbing production of the 777X is an unprecedented economic development opportunity for Missouri.

“In short, this is a huge transformational project,” Nixon said during his address. “And we are going to compete to win this for the Show Me State.”

The possibility of Boeing bringing its 777X production to Missouri arose after a Seattle-based machinist union rejected Boeing’s contract to build that plane in Washington State. Since then, numerous states have expressed interest in landing the work – which could potentially lead to thousands of jobs.

The
Boeing promotional material
The777X

During his speech to Progress 64 West, Nixon said that “deep cuts” to defense budgets in Washington and “recent setbacks with international orders” have raised “questions about whether there will be enough military production to sustain aerospace manufacturing in St. Louis.” 

“It’s a new reality in which we must compete,” said Nixon, who was referring to how Boeing's presence in Missouri involves manufacturing defense products. “And to win, we must work to diversify our aerospace industry to make sure what’s built in St. Louis not only flies over hostile territory overseas, but also in friendlier skies here in America and around the world.”

Nixon said that the 777X received $100 billion worth of orders recently at the Dubai Air Show. He added "when it comes to game-changing manufacturing projects, it doesn’t get much bigger than this."

"Winning production of the 777X would put Missouri in the commercial aircraft manufacturing business in a big way," Nixon said. "It would create thousands of career-supporting jobs for Missouri workers, open new opportunities for suppliers in every corner of our state, and build a bridge over the uncertain waters we see ahead, to a brighter more secure future for Missouri’s entire aerospace industry, commercial and defense."

Nixon said he had an “extremely productive” meeting with Boeing executives from around the country. He said his economic development team has been working “around the clock to put forward an aggressive response in a very short time frame.”

“It’s clear that the Show-Me State has significant advantages,” said Nixon, pointing to a highly skilled workforce and an abundance of community colleges. “When we compete in Missouri, we compete to win.”

Extra time?

After his speech, Nixon told reporters that he was meeting with legislators on Wednesday afternoon to discuss whether a special session would be necessary to consider any incentive package.

"We've already had good discussions with various members of the legislature," Nixon said. "I look forward to sitting down with them and briefing them on where we are and seeing what those opportunities are. I'll defer [when that is] until I've had a chance to speak with legislative leaders directly, but certainly want to make sure we're all rowing in the same direction. 

While stressing that he needed to talk with legislators, Nixon said the timing of such a move would be “a matter of days, not weeks.”

“This is fast-moving, accelerating,” said Nixon, answering a question about the timeline of a potential special session. “So, I won’t give a specific time, other to say than this is something that will be done here from our perspective in early to mid-December.”

Tim Jones
Tim Jones

House Speaker Tim Jones, R-Eureka, told reporters after Nixon’s speech that he’s heard no specifics about what would be encompassed under a legislative incentive plan.

He also said that a special session may not be necessary, adding that there are "plenty of tools in the toolbox right now ... that might be able to bring these jobs here." That includes the so-called "Missouri Works" initiative, which streamlined some economic development incentives.

"Before I can comment on specifics, I need to hear the governor's plan," Jones.

Nixon told reporters that Missouri’s incentives usually involved “withholding taxes of employees and future jobs.” Asked if that sort of proposal would be agreeable to him, Jones said “I always favor cutting taxes – but for the governor, that would be a complete 180.”

Jones was alluding to Nixon’s public campaign against a veto override of tax cut legislation. That bill – which didn’t end up getting overridden – included reductions in income, business income and corporate taxes.

“I’m going to have to be paying special attention to how the governor believes that a tax break now is good for Missouri versus a tax break two months ago during special session was bad for Missouri,” Jones said.

Regardless of whether there's legislative consensus, it’s an open question whether anything Missouri puts forward will be enough to prompt Boeing to pick the Show-Me State.

According to the Seattle Times, a number of other states have expressed interest trying to land the work. Jones noted that includes “right to work” states – such as Utah and South Carolina. And Washington State is considering a multi-billion incentive package that would potentially keep 777X production in its borders.

But Nixon said the fact that Boeing moved an IT center to north St. Louis County was a “good sign.” And he said the “very serious discussions he’s had with very extremely high-ranking” Boeing executives “have shown they’re very serious about it.”

“We have other states out there that obviously feel bullish about their position,” Nixon said. “And I’d only say relative to who we’re going to end up competing with, I think we can put a stronger package on the table than they can.”

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