Fight over Boeing's S.C. factory erupts onto national stage

McClatchy NewspapersJune 12, 2011 

WASHINGTON — What began as an administrative complaint over the opening of a factory in South Carolina has grown into an all-out political brawl over union bosses and the future of U.S. capitalism.

When an administrative law judge takes up the National Labor Relations Board's case against Boeing in Seattle on Tuesday, he will incite Republicans who accuse President Barack Obama of thwarting job growth to appease union cronies and advance his big-government policies.

"All eyes will be on Seattle next Tuesday, when one of our nation's greatest assets and contributors to our economic future will be put on trial for investing, creating and innovating at a time when we are in the middle of an economic recession," Sen. Lamar Alexander, a Tennessee Republican, said on the Senate floor last week.

At issue is whether Boeing engaged in union-busting with its 2009 decision to open a plant in North Charleston, S.C., to make 787 jets for airlines around the world that have already pre-purchased more than 800 of the aerospace giant's cutting-edge Dreamliners.

The NLRB's top lawyer says Boeing built the factory in South Carolina, a right-to-work state with few labor disputes, to retaliate against its unionized employees for past strikes at the Fortune 500 firm's hub in Everett, Wash.

Lafe Solomon, the NLRB acting general counsel, downplayed the dispute in saying "a thorough investigation" led him to file the April 20 complaint that will get its first formal airing in the Seattle courtroom.

"During this hearing, all parties will have a chance to present their arguments and evidence," Solomon said in an interview. "It will be up to the judge to weigh that evidence and issue a decision."

Boeing, the world's largest aerospace company, appears determined to defy the NLRB proceeding.

The firm held a ribbon-cutting ceremony Friday outside the plant next to Charleston International Airport, even though it won't open until next month and won't produce any Dreamliners until the fall.

Boeing officials said the ceremony's timing days before the Seattle hearing was coincidental and denied that it was staged as an in-your-face gesture at Washington.

"We at the Boeing Company are celebrating an important day in American manufacturing," said Sean McCormack, communications head of the firm's government operations. "We are confident that we will prevail against the National Labor Relations Board complaint, but today for us is not about that dispute."

Republican leaders were less measured in framing the symbolic factory opening as a political shot across the bow aimed at Obama and unions that have made millions of dollars in campaign contributions to him and other Democratic candidates.

"Full speed ahead, damn the torpedoes!" chortled Sen. Lindsey Graham. "South Carolina earned the right to build airplanes for Boeing in our state, and no one is going to take that away from us."

Graham, a military lawyer who was in private practice before joining Congress in 1995, derided the NLRB case as a "frivolous" act of "political theater."

Virtually every major business group, from the U.S. Chamber of Commerce to the National Association of Manufacturers, is backing Boeing in the dispute.

Those Republican-leaning groups, along with their hundreds of member companies, have provided their own millions to GOP political candidates.

Obama aides repeatedly have refused to comment on the case, saying the NLRB is an independent agency that must operate free of White House influence.

Leading labor law experts, including some who have served on the NLRB, disagree over whether the federal agency is overreaching — and whether its case against Boeing is routine or unusual.

Stanford University law professor William Gould, who chaired the NLRB in the 1990s under Democratic President Bill Clinton, said Solomon's case is weak.

While the National Labor Relations Act created the NLRB in 1935 and charged it with protecting workers' collective-bargaining rights, Gould said, the law allows firms to consider past strikes and production disruptions in deciding where to locate their plants.

"I don't find merit in the general counsel's position (on Boeing)," Gould said in an interview. "It's perfectly appropriate under our federal labor law for an employer to make managerial decisions based upon its ability to meet production deadlines. And part of that consideration is going to be related to strikes."

Catherine Fisk, a law professor at the University of California at Irvine, said the Boeing case is similar to a string of NLRB actions going back decades in which the labor agency charged companies with shifting jobs from union to non-organized workers.

"The heart of the NLRB case (against Boeing) is that opening the South Carolina plant was done for purposes of intimidating the Washington employees from striking again or from being unduly aggressive in their wage demands," Fisk said.

Labor law permits unions to waive their federally protected right to strike for set periods of time in negotiated agreements with firms.

In talks over where to produce the new Dreamliners, the International Association of Machinists and Aerospace Workers, which represents 25,000 Boeing employees in Washington's Puget Sound region, says it offered an 11-year moratorium on strikes, but Boeing wanted a 20-year guarantee.

Boeing has produced dozens of the 787 planes at a temporary facility in Everett, hiring 2,000 more union workers to help make them, but they can't be delivered to airline customers until the Federal Aviation Administration provides safety certification of the new design.

Boeing built the South Carolina factory to make more Dreamliners — three per month at the start — and to catch up on its 800-plus purchase backlog.

South Carolina, whose 9.8 unemployment rate is among the nation's highest, gave Boeing $900 million in tax credits and other incentives to build a plant with 1,000 workers now in training and in-state suppliers it says will provide thousands more jobs.

Boeing says that its hiring of 2,000 additional Washington state union workers since its October 2009 decision to open the South Carolina plant will make it hard for the NLRB to prove that move was retaliatory or demonstrates anti-union hostility.

Gould buys that argument; Fisk finds it irrelevant.

"What (Boeing) has essentially said (to its union employees) is, 'If you strike again, we can always expand production in South Carolina and those 2,000 people we hired in Washington can always be laid off,' " Fisk said.

Some of the NLRB's past union-busting cases have gone all the way to the Supreme Court, and its complaint against Boeing may take years to resolve.

With both sides dug in, the case could wind a long path from the administrative law judge to the full NLRB board, and then through the federal courts.

Fisk said that even if the NLRB ultimately prevails on the policy merits of its cases, Boeing may prove the ultimate winner with a flourishing South Carolina factory that the agency would have no power to close.

"Even if the original decision was illegal, it's a hard thing to remedy given the fact that the (NLRB) board does not have strong remedial powers and can't award damages," she said. "And courts historically have been very reluctant to order companies to transfer work back to a unionized facility."

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