A consulting firm’s report puts Washington far down the list of attractive aerospace manufacturing centers. Also: Gravity Payments’ $70,000K CEO gets a Tesla from his employees, and a local firm is insuring yachts for trips to Cuba.

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And the nation’s most alluring place for aerospace manufacturing is …

Arizona.

No, we are not making this up. So concluded a report this past week by PricewaterhouseCoopers (PwC), the influential global accounting and professional services firm. In the 2016 Aerospace Manufacturing Attractiveness Rankings, Washington comes in No. 10.

The report says, “The 2016 index is based on a weighted average of variables. For the global rankings, the three categories of variables are costs, industry size, and infrastructure/stability/workforce.” (The United States is No. 1 globally).

The nine states before Washington are Arizona, Florida, Utah, Georgia, Missouri, Indiana, Texas, Michigan and Ohio.

Poor South Carolina ranks only 24th, despite Boeing’s decision to place a second Dreamliner assembly there.

California, with 74,000 aerospace-manufacturing employees, is only 16th. Alabama, which is pretty attractive to Airbus and NASA, comes in No. 13.

Washington was 29th in tax attractiveness, 24th in operating expenses, 13th in industry size and 11th in education.

About the Evergreen State, PwC was brief: “Washington placed tenth in the state rankings. While Boeing has had a large presence in the state since the company was founded in Seattle, in the past year, it invested more than $1 billion in infrastructure to prepare for the manufacture of the next generation of airplanes.”

Huh? Washington boasts one of the planet’s two largest aerospace clusters (along with “Aerospace Valley” in Toulouse, France). In addition to Boeing, more than 1,300 aerospace-related companies are located here. In May, 91,700 employees worked in aerospace product and parts manufacturing.

This is the backbone that makes Washington the nation’s third-largest state for merchandise exports. Aerospace education is ubiquitous. Oh, as for taxes, don’t forget the nearly $9 billion in aerospace tax breaks associated with the 777X.

Though nearly as populous as Washington, Arizona had only 25,000 employees in aerospace manufacturing in May. The state leads the nation in cuts to university funding, has terrible K-12 funding and a reputation for intolerance that doesn’t act as a magnet for talent or high-end investments.

“Right to work” labor is cheap but Arizona has no capacity to hand out the corporate welfare incentives that Washington does.

Much of its aerospace roster, such as Boeing’s helicopter plant in Mesa, is a remnant of the state’s legacy economy seeded by Cold War federal spending. Real estate, not aerospace, is king in Arizona’s underperforming economy.

By way of explanation, PwC partner Scott Thompson in Washington D.C. noted in an email that the study “applies equal weight to Industry presence (which considers both size and growth), Operating Cost, Tax Burden, and Education.”

Washington, he wrote, ranked well for industry presence and education, but less well for operating costs (25th) and taxes (29th). The study did not consider corporate incentives, because they are often tailored to individual companies and there is incomplete public data.

“Individual companies may apply more or less weight to these factors when considering investment decisions,” he added.

 

As for our parochial Washington viewpoint, let’s close with the observation that at this week’s gathering of the aerospace elite at the Farnborough Air Show outside London, Washington, Florida, Alabama and the Carolinas had booths. Connecticut had a booth. Mississippi had a booth. Maryland had a booth.

Arizona didn’t.

— Jon Talton: jtalton@seattletimes.com

Gravity workers give CEO a Tesla

As Gravity Payments’ lawsuit saga wound to a close, CEO Dan Price had one more work surprise waiting for him — a brand-new car.

A new Tesla to be specific, bought for him by Gravity employees.

Price and Gravity gained fame last year when the young CEO announced to much fanfare a plan to raise pay to $70,000 a year for all employees, after a phase-in period. Price said he would also make $70,000, dropping his salary from more than $1 million annually.

The news was quickly marred by the unearthing of a lawsuit, brought by brother and co-founder Lucas Price, which accused Dan of violating Lucas’ rights as a minority shareholder by paying himself too much and charging personal expenses to a corporate card. The lawsuit was served weeks before Dan Price said he came up with the minimum-wage idea.

Price told The New York Times shortly after the announcement that he had listed his house on Airbnb to “make ends meet” as he adjusted to his new salary. Price’s home, which has a pool and three bedrooms, is still listed for $950 per night.

On Thursday, Price posted news of his new Tesla on Facebook, saying “Shocked. Still in disbelief. Never imagined this was possible. Gravity employees saved up and pitched in over the past six months and bought me my dream car.”

The post showed a photo of a poster signed by employees reading “Dan: Thank you for always putting the team before yourself.”

Gravity spokesman Ryan Pirkle said the gift was the idea of Alyssa O’Neal, an employee who he said was one of the “most impacted” by the raise.

Fittingly, the starting price for a Tesla Model S is $70,000.

Pirkle said nearly every one of Gravity’s 135 employees contributed to the gift in some way.

Dan Price successfully contested the lawsuitafter a three-week trial during which the brothers each presented evidence that attacked the other’s credibility. A judge ruled July 8 that Dan had not breached the contract in question, a 2008 document signed by the brothers that laid out the ownership structure and responsibilities of the company’s shareholders.

— Rachel Lerman: rlerman@seattletimes.com

Insurance firm targets sails to Cuba

If Cuba had a dollar for every person who said he wanted to visit the island “before it changes,” it would be the Dubai of the Caribbean.

But that doesn’t deter the unlikeliest U.S. companies to try to turn a buck of their own on the apparently widespread nostalgia for old cars and the thrill of treading on what during the Cold War was considered enemy ground.

Take Novamar, a Seattle firm that specializes in marine and yacht insurance. This past week it said it’s offering an insurance policy for Cuba-bound yachts carrying the Stars and Stripes, as long as their owners have legitimate permission to visit the island.

“People are interested in seeing Cuba before it changes,” says Craig Chamberlain, president of Novamar and a lifelong sailor. “We’re delighted to make it possible for people to fulfill this lifelong dream with less risk.”

Novamar is following plenty of other companies, some in Seattle, excited about Cuba. U.S.-Cuba relations officially began unfreezing in November 2014, and in March President Obama visited the island.

Alaska Airlines, among other airlines, recently got a tentative OK to fly to Havana from Los Angeles. The German company that bought the Victoria Clipper wants to operate a ferry route between Cuba and Florida.

Novamar is zeroing in on a valid market. Many Americans are already flocking to see the glory that was Havana, in ways that are legitimate or not. During a recent visit to Marina Hemingway, a Cuban government-run luxury playground for the nautically proficient on the outskirts of the Cuban capital, many vessels sporting a U.S. flag were evident.

It seems unlikely that the owners of these yachts were performing the intensive educational, cultural, journalistic or religious trips authorized by the U.S. State Department under a general license. But that could very well be the case.

— Ángel González: agonzalez@seattletimes.com