Just as I predicted, the European Union has filed a World Trade Organization complaint against Boeing's new round of subsidies from Washington state totaling $8.7 billion from 2025 to 2040 (h/t @ThomasCafcas). I'll go out on a limb and predict that the EU will win this case.
Okay, that's not really out on a limb: The WTO found that Boeing's last round of state and local subsidies violates its Agreement on Subsidies and Countervailing Measures, and the facts are exactly the same -- except for the fact that the subsidies have grown from $160 million a year to $543 million a year, more than three times as much. This case is a slam-dunk.
Of course, after it loses, it's not like Washington state will comply with the ruling. It's not complying with the last ruling. But it gives us an opportunity to remember that Boeing embodies everything that's wrong with corporate America. According to Citizens for Tax Justice, from 2003 to 2012 Boeing made $35 billion in pre-tax profit, an average of $3.5 billion a year. It made this much despite the fact that its competitor Airbus is also subsidized. Its post-tax profit was $36.9 billion, which is to say that it received a net refund of $96 million from Washington state and $1.8 billion from the IRS over that 10-year period. In other words, it paid no state or federal income tax at all!
Not only that: Boeing demanded, and ultimately won, a concession from the Machinists' union to end its defined-contribution pension and replace it with a 401(k) plan. So one of the last remaining true pensions in the private sector bites the dust, contributing to our coming retirement crisis.
Finally, Boeing used the availability of huge relocation subsidies in other states as a bludgeon against both Washington state and the union. Ultimately, the states need federal rules to end this madness.