Governor Gary Locke’s Remarks
Washington Machinists Council
March 4, 2004

Good morning. It’s a pleasure to be here.

I have been very honored to serve this great state as governor the last seven years. I deeply appreciate the support I’ve received from the Washington Machinists Council and other labor groups. I’m proud of the progress we’ve been able to make working together.

I’m pleased to join Don Hursey here today, the President of the Washington Machinists Council and Directing Business Representative of Machinists District Lodge 160.

And I appreciate the work that every one of you does every day. You fight to maintain strong labor standards and increase workplace safety. You are the voice for working families. The industries and workers you represent are among the mainstays of our economy.

The topic on everyone’s mind here – and all across America – is jobs. Since 2000, the Machinists Union has lost thousands of jobs due to layoffs, plant closures, and the economy in general. IAM Local 751 has lost more than 28,000 jobs since 2000. The aluminum industry has lost thousands more.

We’ve been working very hard to change this trend. We’ve been steadily making our state much more competitive over the past few years.

And our efforts are paying off. Just a couple months ago, we scored a major victory. We landed the Boeing 7E7.

The Boeing decision to place final assembly of the 7E7 in Everett is proof that Washington State is a great place to do business. We competed nationally against states known for economic development and business climate. And we won. “Built by Boeing” will continue to mean “Made in Washington by the best aerospace workers in the world.”

We protected our aerospace industry—and the nearly 200,000 direct and indirect jobs it provides to our state.

Boeing isn’t the only company that thinks this is a great state to do business. In just the past two years alone, eight companies have opened or broken ground on major regional distribution centers in our state—choosing Washington over other Northwest states. Together, these companies are generating thousands of jobs for our state.

We must continue to attract new businesses to our state. And we must continue to protect jobs in key industries like aerospace—and aluminum.

For half a century, our region’s aluminum industry has provided hundreds of family-wage jobs and a strong tax base for local schools and communities.

Landing the 7E7 means Boeing will continue to be an important customer for our state's aluminum industry. But this industry also faces many serious challenges—high energy costs, global competition. Some companies have been forced to close their doors for good.

We need to protect the aluminum industry and its workers in Washington state. In the past few months, we have been working hard on a number of fronts.

Despite our best efforts, a few Northwest utilities were able to stop a litigation settlement that would have decreased the aluminum smelters' energy costs by 9 percent. This is disappointing.

But we will continue to work with BPA to streamline its operations, reduce operating costs, and achieve more accountability in costly fish operations. We think we can avoid further increases, and maybe even bring down costs in the coming year.

BPA will soon begin a regional dialogue on how power will be allocated for the 2007-2011 period. We will be at the table. And we will make sure our aluminum plants have continued access to BPA power.

And the Legislature is now considering short-term assistance for aluminum producers in our state. So far, this bill has strong support in the Legislature. I'm looking forward to seeing it on my desk.

We will continue to fight attempts by the Bush administration and the Federal Energy Regulatory Commission to restructure our energy markets. The restructure proposals would hurt Northwest businesses and consumers.

Frankly, the President and FERC have done enough damage already. We can’t afford to lose any more jobs because of their poor decisions.

As you know, today’s high power prices can be traced to the 2001 energy crisis. In January 2001, when energy prices first started soaring, I called on FERC to impose temporary price caps on energy, and to prohibit energy companies from withholding power to drive prices up. FERC said “no”—the free market is working and we should just trust the market.

I and other Democratic governors met with Energy Secretary Abraham and President Bush. They said no, the market is working and we should just trust the market.

For six long months FERC and the administration said, "trust the free market." For six long months I pressed our case. I went to Washington, D.C., met with members of Congress, and testified before the U.S. Senate. I wrote opinion pieces in the New York Times and made our case on national television.

Prices were sky-high. Washington businesses were shutting down and jobs were being lost. Our economy was losing a half billion dollars a month. Paying a half-billion more per month for electricity than was normal or necessary. Not one single aluminum potline in the state was operating.

Finally, after six months, FERC responded to pressure, imposed price caps, and ordered power plants not to withhold power.

And in just two weeks, prices decreased and stabilized. Just as we knew they would. But it was too late; the utilities and their customers are now stuck with costly power bills for years to come!

What we learned from that experience is that while you can talk about free markets—and I am a believer in free markets—energy markets don't work properly without strong regulatory oversight.

We saw that unscrupulous power traders can withhold energy production to drive up prices, and then businesses and consumers suffer. We saw that companies like Enron can commit fraud, causing legitimate investors to back away from needed power projects. And because there is no substitute for electricity, businesses and consumers don't have a choice. They must buy power at whatever price is demanded.

We must protect Northwest consumers and businesses, and industries like the aluminum industry. Businesses—and the jobs that go with them—must have affordable and reliable energy.

We’re also focusing on proven, targeted tax incentives to create more family-wage jobs in high-tech manufacturing and in rural Washington.

While the tax incentives are important, we must also increase enrollments at our higher education institutions. Employers are looking for more graduates in high-demand fields like nursing, computer sciences and engineering. Our high-tech companies will be hiring thousands of people each year.

But our colleges and universities can’t even meet half the need. We can’t give tax incentives to Washington businesses to create more good-paying jobs without also giving Washington’s sons and daughters the opportunity to land those jobs.

I am urging the Legislature to pass key education legislation we’ve requested this session—particularly my 2004 supplemental budget proposal to increase higher education enrollments in high-demand fields.

And even as we create more good jobs, we must also help our dislocated workers. That’s why I support House Bill 2797. This bill would allow dislocated workers who are receiving Federal Trade Act Assistance to enroll in the state Basic Health Plan. This is a much more affordable health care option for these workers than the COBRA benefits they must currently purchase. This bill is a great opportunity to help these workers keep health care coverage for their families.

As I said at the outset, I deeply appreciate your efforts on behalf of the working families of Washington. Together, we’ve made great progress.

Let’s continue this progress. Let’s continue to make sure our state will always be a great place to live, work and raise a family.

Thank you.

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