washington business
Of Note
Lower Unemployment & Worker’s Comp
Taxes in 2012
Reforms to Washington’s workers’ compensation plan will
result in significant savings for most businesses in the new
year. Prior to the December 2011 special session of the Legislature, the Washington State Department of Labor & Industries
announced it would seek an average 2.5 percent rate increase in
the workers’ compensation plan fund. But after getting feedback
from the business community, including AWB, the plan to seek
increases was dropped. Kris Tefft, AWB general counsel and
government affairs director on employment law and workers’
compensation, said the move was a “welcome surprise” given
that businesses had been experiencing consistent rate increases
since 2007. The reforms governing compensation for injured
workers are projected to save ratepayers about $1.1 billion
over the course of four years. Additional reforms dealing with
unemployment insurance will save businesses more than $500
million through 2012. Statewide about 88 percent of businesses
will pay lower unemployment tax rates.
The Boeing Company Lands Record Orders
Southwest Airlines placed a $19 billion order for 150 737 MAX
and 58 737 Next-Generation airplanes just before the close of
2011. With the Southwest announcement, the 737 MAX now has
orders and commitments for 948 airplanes from 13 customers.
Prior to the Southwest announcement, the private Indonesiabased Lion Air and Dubai’s Emirates Airlines combined to order
$40 billion worth of new airplanes with future options for
—
planes totaling another $14 billion. The massive orders follow
American Airlines’ purchase of 200 planes in July 2011. Despite
the airlines’ bankruptcy announcement in November, Boeing
Commercial Airplanes President Jim Albaugh told Bloomberg he
was confident the order would go ahead. “They think their future
is tied to [the order]. I’m assuming that they will go through this
and emerge and sign the deal and take the planes.”
Any concerns about labor unrest in light of the new orders
were put to rest after a series of secret negotiations resulted in a
four year deal with the machinists union. The contract ensures
the 737 MAX will be built in Renton. The deal also settles the
National Labor Relations Board dispute in which the union
alleged Boeing opened its new 787 assembly plant in South
Carolina in retaliation for a strike. The new contract calls for
annual raises, cost-of-living adjustments, incentive bonuses
and a ratification bonus of $5,000 for each member along with
improvements in the pension program. Boeing has more than
80,000 employees in Washington with more hiring underway.
AWB Member Companies Shine with Secretary of State Awards
In November, Secretary of State Sam Reed awarded Sterling Savings Bank with Washington state’s most prestigious civics award:
The National Association of Secretaries of State Medallion. The award is the top prize given through the Secretary of State’s
Corporations for Communities awards program. Five additional AWB
member companies also garnered honorable mentions from Reed’s office,
including Walmart, the Rants Group, Schweitzer Engineering Labs, Inc.,
Toray Composites and Wilcox Farms. The Corporations for Communities
awards recognize Washington businesses that make community-giving
a high priority. In 2011 alone, Sterling employees donated more than
30,000 hours of community service time. The company sponsors dozens
of events each year and donates to more than 300 community-minded
organizations throughout its five-state service area. In