June 15 (Bloomberg) -- Yesterday in Seattle, an obscure administrative court heard a case that unions are hoping will help them stem the painful decline in labor’s bargaining power. In this instance, the unions have picked the wrong battle.
The issue at hand: Whether Boeing Co. illegally punished the local machinists’ union when it decided in 2009 to locate a new plant to build its 787 Dreamliner in North Charleston, South Carolina, instead of the Puget Sound region of Washington, where Boeing has built planes since 1936. In April, the National Labor Relations Board determined that Boeing’s decision violated federal labor law, because it amounted to retaliation for strikes.
The details of the case, though, aren’t quite so cut and dried. Boeing initially offered to build the 787 plant in Puget Sound, on the condition that the union agree not to strike for at least 10 years. After talks broke down, Boeing accepted $170 million in grants and tens of millions more in tax breaks to build the plant in South Carolina. By locating its new plant in one of the 22 right-to-work states that have adopted laws supporting non-union employment, the company followed the well-worn path of textile manufacturers, automakers and others that have moved south to reduce labor costs.
In defining the move as illegal retaliation, the labor board cited company executives’ public statements about their desire to avoid strikes. That, the board concluded, demonstrated the executives’ intention to punish the workers, who had staged strikes at Boeing factories four times since 1989.
Right to Strike
Just to be clear: Workers have the right to strike. But companies are equally entitled to make strategic plans to avoid work stoppages. Boeing, which has more than 50,000 union workers in a global labor force of 157,000, didn’t break a strike, crush a union or intimidate union employees. In fact, employment at Boeing’s unionized Puget Sound plants is up by 2,000 since the South Carolina plant was announced.
Employers’ quest for low-cost labor has been devastating to American workers. Textile and apparel manufacturing has moved largely offshore, at a loss of more than 1 million American jobs. Automakers who once paid high wages are offering new employees $14 per hour. Boeing’s machinists understandably worry that the company’s move to South Carolina signals a future of declining wages.
However, the pain inflicted on individual workers by companies’ efforts to boost their competitiveness doesn’t necessarily make those efforts illegal. Before the labor board files a complaint, it should be clear that the target of the complaint has crossed a legal line. No such transgression exists in this case. Rather than the company punishing the union for striking, it appears that the board is seeking to punish the company for opening a plant in a right-to-work state.
A victory for the union wouldn’t do much good for manufacturing workers. Having hired 1,000 workers and invested $2 billion in the South Carolina plant, Boeing expects its first 787 to be completed in July. If federal courts, the next likely venue if the administrative case isn’t settled, endorse the labor board’s ruling, work at the plant would stop.
With unemployment about 9 percent and conservative governors in Wisconsin, Ohio and elsewhere seeking to neuter public-employee unions, the U.S. labor movement has its back to the wall. The labor board was reflexively anti-union under the Bush administration. Under the board’s new Democratic majority, unions are no doubt eager to receive a better shake. Unfortunately, the complaint against Boeing is merely shaky.
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