Mo. gov. signs $1.7B Boeing tax incentive package

ST. LOUIS -- Missouri Gov. Jay Nixon chose a monument to the space race manufacturing boon of a half-century ago as a backdrop Tuesday to sign into law a $1.7 billion tax incentive package created in a bid to lure aerospace giant Boeing to the state.

The Democratic governor endorsed the tax breaks for production of the company's "next generation" 777X passenger plane at a bill signing ceremony at the James S. McDonnell Planetarium in Forest Park, part of the St. Louis Science Center. The 50-year-old planetarium's namesake founded the McDonnell Aircraft Corp., which later became McDonnell Douglas, was based at Lambert-International Airport in St. Louis before its 1997 merger with rival Boeing and played a key role in the efforts leading to manned spaceflights.

"Just as workers right here in St. Louis helped our nation reach for the stars by building the Mercury space capsules a half century ago, today we send a clear message that Missouri is ready to open the next great chapter for high-tech aerospace manufacturing in our state," Nixon told more than 100 civic and business leaders, state and local politicians, community college presidents and labor organizers as he stood in front of two NASA space shuttles on display at the museum.

The ceremony came hours before Boeing's self-imposed deadline for offers from eager local and state governments across the country. The presumed Missouri manufacturing site would be on the edge of the airport in St. Louis County. The tax credits are worth up to $150 million annually over 23 years if Boeing meets its target of 8,000 new jobs.

Missouri lawmakers swiftly approved the incentive package during a one-week special session last week that saw little opposition from either side of the political aisle. Boeing Co. currently builds military aircraft at its site near Lambert and employs about 15,000 people in Missouri.

The company requested proposals from more than a dozen locations for 777X production after a machinists' union in Washington state last month rejected a proposed contract seeking to replace their traditional pension with a defined contribution savings plan. While the company can still choose to remain in the Pacific Northwest, Nixon said he doesn't expect that to happen.

On Monday night, the St. Louis County Council unanimously approved a local package that could add up to $1.8 billion more in tax incentives to the overall offer. St. Louis Mayor Francis Slay was among those who spoke in support of the project at that meeting, and County Executive Charlie Dooley sounded similarly optimistic Tuesday.

"We showed the world that St. Louis is prepared," Dooley said in an interview after Nixon's remarks. "I believe we are going to be successful."

Chicago-based Boeing is expected to announce the plant's location early next year. The proposed incentives would come from an expansion of four existing state programs that base the amount of aid on the number of jobs businesses add.

"This is not a guarantee we will succeed," Nixon noted. "But boy oh boy, a guarantee that we would fail is if we didn't compete when these transformational opportunities came."

Missouri's offer also includes an agreement among community colleges to provide specialized training and a pledge by local construction unions to build the Boeing facility quickly by working around the clock without overtime pay.

The long-range, twin-aisle 777 is Boeing's second-largest plane and has been a best-seller since its first flight in 1994. The new 777X is expected to carry as many as 400 passengers, about 35 more than the current model, and be more fuel efficient. Boeing already has commitments from airlines worldwide to buy 259 planes valued at more than $95 billion.

Nixon said he wasn't concerned that Missouri's very public courtship of Boeing would give rivals an advantage by tipping them off with details.

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