The White House and American business
Don't bully Boeing, Barack
Want to prove you are “pro-business”? Condemn a loony-left complaint against America’s biggest exporter
May 19th 2011 | from the print edition
IF YOU book a holiday and the flight is cancelled, you may decide to use a different airline the next time. Airlines know this, which is why Sir Richard Branson, the boss of Virgin Group, was so angry when Boeing failed to deliver the planes he needed to ferry thousands of passengers to sunny climes one Christmas. He blamed a strike by Boeing workers in Washington state. “If union leaders and management can’t get their act together to avoid strikes, we’re not going to come back here again,” he told reporters. “We’re already thinking: ‘Would we ever risk putting another order with Boeing?’”
No one disputes a traveller’s right to switch airlines, or an airline’s right to switch suppliers. But woe betide an aircraft-maker that tries to shift production from a strike-plagued American state to a more business-friendly one; at least, if the National Labour Relations Board (NLRB) gets its way. Under President Barack Obama, the federal agency charged with policing interactions between firms and employees has started to interpret old laws in new and troubling ways.
Its case against Boeing goes like this. Since 1995 Boeing has suffered three strikes at its unionised factories near Seattle. The longest stoppage, in 2008, lasted for eight weeks, cost the firm $2 billion and prompted customers such as Sir Richard to use phrases like “absolutely and utterly ghastly”. Oddly enough, when deciding where to expand production, Boeing took this into account. In 2009 it announced that it would build a new factory to assemble 787 Dreamliner jumbos in South Carolina. That, the NLRB’s general counsel claims, was an illegal act of “retaliation” against strikers in Washington, aimed at intimidating them into not striking in the future. Its proposed remedy is for Boeing to move the work to Washington. What would become of the $1 billion it has already invested in the new factory, and the 1,000 South Carolinians it has hired, is anyone’s guess. The case will be heard next month (see article).
Be careful what you wish for
The 1935 National Labour Relations Act has never been construed so broadly. Boeing is not actually reducing the amount of work it does in Washington. Quite the opposite: it increased its workforce there by 2,000. It is not closing the factories where the strikes occurred, nor is it sacking the strikers. It is merely choosing to add capacity in a state where labour relations are more cordial. In Washington, once workers at a company vote to unionise, every employee can be forced to join (and pay dues to) the union. In South Carolina they cannot. It is one of 22 “right to work” states where such compulsion is illegal (and to which millions of jobs have migrated).
Labour unions hate right-to-work laws, and are hoping that the NLRB will undermine them. They should be careful what they wish for. The NLRB’s line of reasoning would make it potentially illegal to build a new factory in a right-to-work state if you already operate one in a heavily unionised state—creating a powerful incentive never to do business in a heavily unionised state in the first place. It would be safer to make things only in places like South Carolina, or perhaps south China.
The NLRB is an autonomous body, but its board members are appointed by the president. Under a Democratic president, American businesses expect a more pro-union line, but the agency’s recent militancy is shocking, reminiscent of “loony-left” posturing in Britain in the 1970s. Not only does the agency in effect claim the power to tell firms where they may build factories. It is also suing two states (Arizona and South Dakota) where voters have decided that workers should be guaranteed a secret-ballot election before their workplace is unionised. Mr Obama has so far said nothing about any of these cases. The president claims he understands business. Condemning the NLRB would be a good way to prove it.
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