Boeing's South Carolina move: Illegal union bashing or just good business?

Presidential politics and anti-union sentiments are fueling a growing debate over the NLRB's complaint against Boeing for moving part of its Dreamliner assembly line to South Carolina, a right-to-work state.

By , Staff writer

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    The Boeing Company plant and signage are seen in El Segundo, Calif. Boeing Co. is planning to open a major manufacturing facility in South Carolina, which has the National Labor Relations Board accusing them of braking federal labor laws.
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A brewing battle between the National Labor Relations Board and Boeing Co. over its plans to open a major manufacturing facility in South Carolina is being infused with new energy from a volatile mix of presidential politics and competition between pro- and anti-union states for precious jobs in a still struggling economy.

South Carolina Gov. Nikki Haley and top Republicans called on President Obama Tuesday to pressure the NLRB to drop its recent allegations that Boeing, the nation's largest manufacturer, broke federal labor laws when it decided to move part of its Dreamliner line to the South Carolina Low Country instead of bolstering production of the new plane at the company's main Puget Sound, Wash., plant.

"We are demanding that the president respond to what the NLRB has done," Governor Haley told reporters in Washington. "This goes against everything we know our American economy to be."

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The NLRB's general counsel, Lafe Solomon, has alleged in a complaint that Boeing attempted to intimidate and threaten union workers by citing recent strikes as part of the decision to build the plant in South Carolina, a state that doesn't allowed closed union shops. But at a Chamber of Commerce roundtable Tuesday, Republicans attempted to seize on the move as not only an ill-timed and "unprecedented" attack on American industry, but as a stake in the ground for a brewing battle of political will between industrial, and largely union-friendly, Northern states and the 22 "right-to-work" states in the South and West.

"On one side you've got presidential politics and the labor movement's strained relationship with the Democrats, and on the other side you have states' rights, free enterprise and sweeping antiunion sentiments," says Gary Chaison, an industrial relations professor at Clark University, in Worcester, Mass. "It's an incredibly volatile mixture."

Boeing is getting set to open the $2 billion, 3,800-employee facility this summer. But the NLRB complaint, made in response to the AFL-CIO and the International Association of Machinists, points to specific statements by Boeing officials connecting the South Carolina move to the 2008 strikes, which could put the company in violation of federal labor law. The complaint pointed to a specific statement made by a Boeing official to the Seattle Times, where he said that the "overriding factor" behind the South Carolina decision "was that we cannot afford to have a work stoppage, you know, every three years."

In its defense, Boeing has said there were many other factors undergirding the South Carolina decision, including its international port and lower cost of doing business. Boeing also notes that it's added 2,000 jobs to the Washington line since 2009, a fact that it believes makes the NLRB complaint that Boeing is bent on punishing Puget Sound workers "legally frivolous."

Even before this year's battles over collective bargaining in Wisconsin and other Midwestern states, Boeing's 2009 decision to fill some of the 800 Dreamliner 787 orders with a new line in North Charleston was widely seen as a devastating blow against unions, which have steadily lost influence over industrial policy over the last decades. Expensive union contracts were also cited by automakers during the 2008 hearings that led to a government bailout of General Motors and Chrysler.

Union officials across the US see the Boeing complaint as a Maginot Line with the potential to stem what could become a more dramatic outflow of industry from unions states to right-to-work states, and a subsequent further weakening of union clout, as the US economy recalibrates after the Great Recession.

"The truth is, every job on the unlawful second line in South Carolina displaces good middle-class, union jobs in Washington, and our communities and the state lose desperately needed revenue and economic activity," writes Jeff Johnson, president of the Washington State Labor Council, in a Seattle Times op-ed.

GOP presidential aspirant Tim Pawlenty raised the Boeing complaint at a recent GOP event, and at the Chamber of Commerce roundtable, Haley and other Republicans again addressed what they call an "attack" by the Obama administration on free enterprise and the 22 right-to-work states.

Sen. Rand Paul of Kentucky went so far as to wonder aloud at the event whether Obama has an "enemies" list targeting Republican-leaning states.

"Are we going to use the full power and bully nature of government to say business cannot be located in a state that might happen to vote Republican?" Sen. Paul said. "I find this appalling, and I respectfully ask the president to immediately rescind this assault on business.”

The White House has said it won't comment on an independent agency matter, though Republicans have threatened to hold up several key appointments unless Obama forces the NLRB to drop the complaint. It's not uncommon for the NLRB to lean in the general political direction of the person in the White House. President Reagan's NLRB board, for example, took over a dozen anti-union stances in a single year during his presidency.

But even as the NLRB's Mr. Solomon appeared to soften his tone this week, opening the door to a possible settlement, it's still not clear what the NLRB ultimately wants. Does it seek labor concessions from Boeing? Or is it demanding that it abandon its new North Charleston plant and move the line back to Seattle?

Harvard Law professor Ben Sachs told the news blog TPM Muckraker that the Obama administration is still gauging the complaint, which means the implications remain unclear.

"One possibility is this is just an odd case where, for whatever reason, we have management saying on the record that they're doing this because they don't like strikes," Prof. Sachs said. "But if it's indicative of the NLRB's view you can't relocate to avoid unions it's far more significant."

Depending on the ruling by an NLRB administrative judge at a June 14 hearing, as well as possible subsequent full-board hearings and court challenges, the Boeing complaint has the potential to stir deeper passions in an America in the middle of what many feel is a jobless recovery, says Prof. Chaison. While the US added 244,000 jobs last month, the unemployment rate rose from 8.8 percent to 9 percent, signaling the US economy's difficulty in finding traction.

"The [Boeing controversy] really deals with some primal fears not just about competition between the US and other countries for jobs, but between states for jobs," he says. "To have a labor board in Washington declare that an employer can't make decisions about plant relocation to people in South Carolina seems like a states' rights issue, but to people in other states it seems like the [NLRB] is just enforcing the law and preventing an employer from doing something coercive."

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