Don Brunell 4/28/11

NLRB decision on Boeing plant is bad precedent

During the 2008 presidential campaign, candidate Barack Obama promised organized labor that he would support their agenda. Having failed to get laborer’s priorities through Congress, the Obama administration is seeking to achieve the same goal through regulation.

For example, the president campaigned on passing card check, a union-backed measure that eliminates the secret ballot in union organizing elections. Inappropriately dubbed the “Employee Free Choice Act,” card check actually eliminates free choice by allowing union organizers to watch as an employee checks yes or no to unionize the company. If a majority of workers check the “yes” box, the employer would end up in binding arbitration.

The scheme was too much even for liberal icon Sen. George McGovern, who wrote in The Wall Street Journal, “Under EFCA, workers could lose the freedom to express their will in private, the right to make a decision without anyone peering over their shoulder, free from fear of reprisal.”

In the face of the resulting uproar, Congress tabled card check. In response, the president went about stacking the National Labor Relations Board (NLRB) to fulfill his promises. Currently, three of the four members of the NLRB - a supposedly neutral body - are former union lawyers.

Now the reconstituted NLRB has stepped in on behalf of the unions, asking an administrative law judge to shut down Boeing’s non-union South Carolina production facility. The reason? The unions claim that setting up a second production line in South Carolina for the 787 Dreamliner was an act of retaliation against the unions for strikes against the company. (The union has shut down Boeing’s commercial aircraft production line four times since 1989, and a 58-day strike in 2008 cost the company $1.8 billion.)

Acting NLRB General Counsel Lafe Solomon says Boeing acted out of “anti-union animus” and its decision to move had the effect of “discouraging membership in a labor organization” and thus violates federal law.

This is what actually happened: Although its union contract didn’t require it, Boeing executives negotiated with the International Association of Machinists and Aerospace Workers to build the Dreamliner at its existing plant in Washington state. The talks broke down because the union wanted, among other things, a seat on Boeing’s board and a promise that Boeing would build all future airplanes in Puget Sound.

So, Boeing management did what it judged to be best for its shareholders and customers - it looked elsewhere. In October 2009, the company settled on South Carolina, which, like the 21 other right-to-work states, has friendlier labor laws than Washington. In a conference call at the time, Boeing chief Jim McNerney put it bluntly, saying the company couldn’t have “strikes happening every three to four years.”

The move to South Carolina was a reasonable business decision that has created more than 1,000 jobs and has generated roughly $2 billion worth of investments. And Boeing still has a strong presence in the Puget Sound where its workers are among the best paid in America.

With the 787 already three years behind in delivery, a strike or any disruption in production schedules would be crippling. With their patience running thin, airlines have already removed the provision in their purchase agreements that forgo penalties for strike-related delays. Every delay only gives competitor Airbus the opportunity to bring its new technology to market and even further jeopardizes Boeing’s 800 orders for 787.

If the NLRB gets its way, Boeing would be powerless to act regardless of what the union did because any response other than capitulation would be deemed “retaliation.”

The NLRB’s position puts our economic recovery at risk. As The Wall Street Journal editorialized, “It would essentially give labor a veto over management decisions about where to build future plants. And it would undercut the right-to-work statutes in 22 American states - which is no doubt the main union goal here.”

Allowing the government or unions to dictate investment decisions and plant locations is a very bad precedent to set, whether it be Congress, the president or regulators like the NLRB.

(Don Brunell is the president of the Association of Washington Business.)