This recession has been long on horror stories. From persistent unemployment to crisis-leveldeficits, there have been very few things to provide us with any sense of optimism,much less cheer about. But Boeing has been the rare glimmer of hope. In thedarkest days of the recession they made a decision to invest $1 billion in anew factory in South Carolina. It was a project that employed thousands in the constructionphase and now promises to employ thousands more as workers are being trained to build planes in the brand new 1.2million square foot plant.
Unfortunately,what should have been an American success story, a reminder of the promise ofAmerica’s unrivaled free-markets, has instead become yet another depressingepisode of government intervention.
The NationalLabor Relations Board (NLRB), which has taken a decidedly pro-union turn underthe Obama Administration, filed a complaint in late April over its decision toopen the plant in South Carolina rather than Washington State where it hasoperated a production facility for the last 20 years.
At issue iswhether Boeing acted in a “retaliatory” manner in deciding to expand productionin South Carolina, which is a right to work state, versus union-friendlyWashington. Admittedly, Boeing has had significant trouble in their dealingswith unionized workers. In the past 20 years, Boeing union workers have gone onstrike four times, the longest being 69 days.Analysts estimated that the most recent strike in 2008 costs the company asmuch as $120 million per day. What the NLRB is labeling “retaliation” mostwould consider sound business judgment.
As Boeing CEO Jim McNerney explainedin an op-ed in today’s Wall StreetJournal,
Our decision to expand in South Carolina resulted from anobjective analysis of the same factors we use in every site selection. We consideredlocations in several states but narrowed the choice to either North Charleston(where sections of the 787 are built already) or Everett, Wash., which won theinitial 787 assembly line in 2003.
Our union contracts expressly permit us to locate new work at ourdiscretion. However, we viewed Everett as an attractive option and engagedvoluntarily in talks with union officials to see if we could make the businesscase work. Among the considerations we sought were a long-term "no-strikeclause" that would ensure production stability for our customers, and awage and benefit growth trajectory that would help in our cost battle againstAirbus and other state-sponsored competitors.
The move did nothing to eliminate oreven reduce production in Washington’s Puget Sound area. In fact, Boeingcontinues to add jobs in Washington. The New YorkTimes reported that Boeing has increased its unionized employment by2,000 workers since its decision to expand to South Carolina. Furthermore,within the past year Boeing has added another manufacturing facility inIllinois, a pro-union state.
The NLRB’s complaint is nothing more than anaked assault on America’s free market heritage. Such unprecedented legalaction attempts to insert the pro-union desires of the Obama Administration forthe economic and financial sense of the company when making business decisions.The end result of such blatant overreaching will be to further push economicgrowth overseas.
Our corporationsare already laboring under the second highest corporate tax rate in the worldand an antiquated “worldwide” tax system that double-taxes their repatriatedearnings. Is it wise to now intimidate them into only locating inunion-friendly states which may demand uncompetitive wages or benefits? AsSenate Republicans stated in their letterto President Obama, “America will not win the future if Washington penalizesworkers in states that have discovered winning economic strategies.”
Sadly, it appearsObama’s vision for winning the future has little to do with fostering economicgrowth, and a lot to do with placating his union friends.