Presidential candidate Donald Trump’s prediction that in five years Boeing’s S. Carolina jobs could all be shipped to China shows a lack of understanding of the airplane business, experts said. Also, Tim’s Cascade marks 30 years of churning out potato chips.
Republican presidential candidate Donald Trump warned South Carolina audiences this past week that Boeing’s prized manufacturing complex in their state could soon be gone, its 7,500 jobs shipped off because “it will be cheaper to build in China.”
People with a better grasp of the airplane business don’t share Trump’s concern.
“I think he’s somewhat badly confused about our industry,” said Richard Aboulafia of the Teal Group consulting firm outside Washington, D.C. “If anything, there’s a trend toward insourcing, moving work back to the U.S.”
Another leading aviation observer, Adam Pilarski of Avitas, agreed: “The whole thing appeals to people who have absolutely, totally no idea about the industry … It’s absolutely ridiculous.”
Most Read Business Stories
- Seattle-area home price growth continues to accelerate; city still No. 2 in the nation
- Amazon's $3,000 signing bonuses irk workers who got $10 coupons
- Amazon cloud outage hits customers including Roku, Adobe
- Pandemic gave locals fleeting taste of a tourist-free Hawaii
- Jobless claims soar as new restrictions hit restaurants and other Washington state businesses
Trump’s appearance Feb. 17 in Walterboro, S.C., put him about 50 miles northwest of Boeing’s growing industrial complex in North Charleston.
What he told the crowd, according to CSPAN’s video of the Feb. 17 event:
“Boeing just had a big order from China, but China is making them build a massive airline facility, right? Massive, like bigger than anything you’ve seen. You feel good about Boeing right now? Tell me in five years …
“They are going to build that plant, they are going to devalue the hell out of their currency, and all of a sudden you’re gonna be reading a big front-page story, all over the place, that Boeing is going to leave South Carolina, they’re going to make all their planes in China. Because that’s what they do.
“And our leaders aren’t smart enough to stop it, OK?”
On the other hand, Trump added, if he’s president, “You’ll be fine, don’t worry about it.”
At a later rally right in North Charleston, he doubled down on his dire scenario, according to the local Post and Courier:
“It will be cheaper to build in China,” he said. “Then all of a sudden your Boeing plant in this area will be gone, and we don’t want that to happen. And a politician will never be able to stop it. Because they’re all talk and no action. They don’t have a clue.”
Aboulafia called Trump’s scenario of moving airplane manufacturing to China “bizarre.”
Boeing did agree in November to establish an interior finishing plant in China where things such as seats will be installed in 737s before they are painted and delivered to Chinese airline customers.
But unlike Airbus, which is doing final assembly on single-aisle planes in China, “Boeing gave them some paint work that was embarrassingly trumped up, exaggerated,” Aboulafia said dismissively.
Nobody should be worried that the company gave away any “strategic carpet-stapling capabilities,” he joked.
Pilarski noted that industries that pursue the lowest-wage workforce are now leaving China in favor of nations such as Vietnam. More importantly, he said, “In aviation, cheap labor is not the major element because you need technical skills and so on.”
Boeing’s North Charleston complex is proof that outsourcing major aircraft structures and opening new factories is hardly a surefire strategy. On the heavily outsourced 787 Dreamliner, the company was forced to buy out its major supplier partners in South Carolina. It experienced a rocky startup for its own assembly operation, too.
Aboulafia noted that after having Japanese partners build the 787’s wings, Boeing brought that back in-house with the 777X wings, to be made in Everett.
The U.S. share of the world’s aircraft output, by value, has held steady at around 53 percent for several years, according to Teal data.
China’s share is negligible. And despite its ambitions to build airliners, “so far they haven’t been hugely successful,” Pilarski said.
In South Carolina, Trump has also denounced air-conditioner manufacturer Carrier, which said this month it would move 2,100 jobs from Indiana to Mexico.
The businessman candidate said that if he were president, he would slap a 35 percent tax on the company’s air conditioners shipped back to the U.S.
It’s not clear how the growing number of South Carolina factory workers who are employed by foreign companies may react to Trump’s economic nationalism.
For instance, 100 miles from Walterboro is Camden, where appliance manufacturer Haier became the first Chinese company to open a U.S. factory.
Last summer it announced plans to add 410 jobs as it nearly doubles the size of its plant, which makes refrigerators and freezers.
And another 125 miles down the road is Spartanburg, S.C., where BMW in 2014 declared it would spend $1 billion to double its capacity, creating the German carmaker’s largest factory worldwide. That plant already employs more than 8,000.
But as Aboulafia says, “The agenda of economic populism resonates with some people. The reality isn’t that important.”
— Rami Grunbaum: firstname.lastname@example.org
Tim’s Cascade still chipping away
For years, Tim’s Cascade potato chips have been a staple on many local grocery-store shelves, its red-and-white original, lightly salted chips sitting alongside trendier, fun flavors, including wasabi and Parmesan and garlic, that come and go.
This year, the Algona-based Tim’s Cascade Snacks is marking its 30th anniversary by bringing back one of its first flavors: the hot-dog-and-mustard flavored Coney Island Chips.
“Tim and I rolled that out in 1990 as a limited edition,” remembers Jeff Leichleiter, general manager of Tim’s Cascade Snacks, who co-founded the company with Tim Kennedy. Kennedy retired in 2005 and sold the company to Birds Eye Foods.
The flavor did well but the company decided to cycle the flavor out, as it does periodically with some flavors.
It decided to bring it back for the anniversary because “it’s a fun one,” Leichleiter said. And “it’s just in time for spring training and barbecues.”
Over the years the company, which has grown to employ 105 people and uses some 40 million pounds of potatoes a year, has brought out “special batch” limited-edition flavors each year.
This year, in addition to the Coney Island flavor, the company is introducing Hawaiian Island Lemon.
Why lemon-flavored potato chips?
“It’s kind of trendy,” especially in the food-service business where these types of trends start out, Leichleiter said.
The company has found that different flavors appeal to different parts of the country. For instance, a barbecue chip is not just a barbecue chip. Texans prefer a Mesquite barbecue flavor while Pacific Northwesterners prefer a wood-smoked, less salty flavor — so — different flavors are named after different regions.
Tim’s Cascade Snacks is now a subsidiary of Parsippany, N.J.-based Pinnacle Foods.
For the quarter ended Sept. 27, 2015, Pinnacle reported that its specialty foods division, which includes Tim’s, saw net sales decline 13.9 percent to $82.2 million. Figures for sales at Tim’s aren’t disclosed.
— Janet I. Tu: email@example.com