There once was a time when a Americans built businesses where it made sense. Before the days of interstates and FedEx, one was generally more profitable building one’s products as close to markets as was feasible. Sleighs were not generally built in South Florida, nor were kayaks manufactured in Oklahoma.
Much has changed since those simpler days, including the reasons that a business might choose to build a manufacturing plant in one location rather than another. Ensuring that one will not be subject to crippling strikes every few years would seem to be a sound reason for locating a new facility in a right-to-work state. Such sound reasons do not seem to resonate with the stuck-in-1935 National Labor Relations Board:
In 2009 Boeing announced plans to build a new plant to meet demand for its new 787 Dreamliner. Though its union contract didn’t require it, Boeing executives negotiated with the International Association of Machinists and Aerospace Workers to build the plane 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 and 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. As Boeing chief Jim McNerney noted on a conference call at the time, the company couldn’t have “strikes happening every three to four years.” 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.
It would seem that Boeing made a good faith effort to work within the constraints of its union environment. A seat on the board and a promise to build everything in one location (regardless of what the future market supports) is more than a little bold on the part of the union. Given the decreasing power of the private sector unions, it would appear that this demand was part of the union’s bid to ensure that its relationship with Boeing was nearly unbreakable. However, the union asked for more than Boeing could afford, so Boeing went elsewhere.
This reasonable business decision created more than 1,000 jobs and has brought around $2 billion of investment to South Carolina. The aerospace workers in Puget Sound remain among the best paid in America, but the union nonetheless asked the NLRB to stop Boeing’s plans before the company starts to assemble planes in North Charleston this July.
The NLRB obliged with its complaint yesterday asking an administrative law judge to stop Boeing’s South Carolina production because its executives had cited the risk of strikes as a reason for the move. Boeing acted out of “anti-union animus,” says the complaint by acting general counsel Lafe Solomon, and its decision to move had the effect of “discouraging membership in a labor organization” and thus violates federal law.
And some wonder why so many of us are claiming that our federal government is increasingly socialist?
By definition, a company exists to be profitable. It does not exist for the benefit of its employees–though they should receive benefit from their labors. Any company which should even attempt to exist solely for the benefit of its employees will not last long in a competitive market. Non- and not-for-profit entities are a different matter–but Boeing is hardly in that category.
Here is hoping that the massive overreach of the complaint–which would mean that any company which has union employees and chooses to expand in a non-union state is in violation of federal labor law–will be clearly and effectively shot down. It may be too much to ask, but Congress might find it beneficial to examine whether the dinosaur that is the NLRB should be encouraged into extinction.