Boeing, Punishment, and Retaliation
Yesterday, I had what has become par for the course on USAir -- a 3-hour flight delay for idiotic reasons on the outbound flight and more delays on the return flight. I am out $200 for the accommodations I had to make to overcome the delay (a ticket on Southwest) and I was late to my meeting. I understand that USAir's formal liability is limited to the amount I paid them for the first leg of the ticket, but I am going to "punish" USAir by taking my next flight this summer on Southwest and "retaliate" against USAir by looking to do as much traveling as I can on other airlines in the future. My desire to punish and retaliate might cost me some extra money, but it's my money to spend. A law that required me to fly USAir rather than Southwest despite the lousy service would be laughable.
I think that's how most people understand rules of the game in our society, and that's why I think the National Labor Relations Board's case against Boeing is going to be a political loser for the Democrats for as long as it is in the news. If you haven't been following this issue, you can get a quick overview here (or in the video posted below). The key paragraphs are:
Mr. Solomon said that he understood that the complaint had made local workers "feel vulnerable and anxious," but that it had been brought because of concerns that Boeing had been motivated by retaliation against workers exercising their right to strike. "These are difficult economic times, and I truly regret the anxiety this case has caused them and their families," he said during his testimony. "The issuance of the complaint was not intended to harm the workers of South Carolina, but rather, to protect the rights of workers, regardless of where they are employed, to engage in activities protected by the National Labor Relations Act, without fearing discrimination."
Mr. Solomon filed a complaint in April alleging that Boeing decided to locate a new assembly line to build 787 Dreamliner jets in South Carolina because it was trying to punish union workers in Washington state for their past strikes. Boeing says the charge is groundless and has said it will fight the case to the Supreme Court.
I think the claim that failing to expand in a given area because it is cheaper to expand in another area is a violation of any law that is worth being upheld is going to be a tough one to make. It is further complicated, in this particular case, by the fact that there is no evidence that any specific workers have lost jobs in Washington, Boeing's home and the location of the existing assembly lines for the 787.
In a narrow sense, this post
In a narrow sense, this post makes a reasonable point. It's an easy, one-step argument to say that a consumer (or a business) should have freedom of choice to seek a desired combination of value vs. cost. However, the argument about how this ultimately sells politically will depend upon whether or not the discourse becomes generalized (i.e., will the discussion include unionism and economic inequality).
As stated in the video, companies have been moving to the south for decades. But maybe the current throes of economic difficulty will lead people to question why this has been happening. The absence of regulations in the south (labor, environmentalism) are appealing to businesses for short-term profits. But these trends are comparable to "smokestack chasing" in third-world countries. Is this the economy that we seek?
Yeah, I'm having a hard time seeing where a law was broken
"Mr. Solomon filed a complaint in April alleging that Boeing decided to locate a new assembly line to build 787 Dreamliner jets in South Carolina because it was trying to punish union workers in Washington state for their past strikes."
"It is further complicated, in this particular case, by the fact that there is no evidence that any specific workers have lost jobs in Washington, Boeing's home and the location of the existing assembly lines for the 787."
Is the claim that no existing business can choose to build new facilities in a state other than its home state? I'd be pretty upset if I were a South Carolina worker or taxpayer.
The Devil's Advocate
I agree the suit brought by the NLRB sounds silly, but for the fun of it, let me try to articulate what I think the union and the NLRB are concerned about. Under the labor laws, a union has the right to strike (under conditions) and an employer cannot retailiate against a union for legally striking. If an employer were to retaliate against a legal strike, that would have a "chilling effect" on the union's right to strike in the future, and thus the right to strike which is protected by law would be abrogated. That's the theory and one can perhaps see similarities here between this rationale and the rationale behind, say, Whistleblower laws.
It's tough to draw the line between outright "retalition" (which sounds kinda personal) and an employer making a rational economic decision that, hey, it's too expensive to do business in this state so I'm going to locate my future expansion elsewhere. There may likely be, of course, some causal connection between the presence of the union in Washington state and its past strike history there and the costs of doing business there. That would mean, at the extreme, that Boeing would be forever prohibited from expanding its future business in a (cheaper) "right to work" state. In fact, as a strategic matter, it would mean that every union should strike at least once in order to set up this line of retaliation argument.
So, likely what this means is that the union must show some animus on the part of Boeing, that is, that Boeing had the subjective intent to retaliate against the union for its past strike activities. Were it not for the very stupid remark of one Boeing official suggesting that the strike history may have had something to do with the move (he did not just refer to the higher cost of business in Washington, but the fact that there had been 5 strikes in the past, suggesting, perhaps, that the two might be related), the union and the NLRB would not have a chance. I suspect that Boeing might have a very strong motive to retaliate against that particular executive. I also suspect the defense (if it goes to hearing) will likely be that this executive does not speak for Boeing.
Where I think the NLRB will likely fail is the fact (as pointed out by Samwick) that no union employee has lost his job because of this and the union still enjoys the right to strike with respect to its existing activities in Washington. If Boeing were to have actually shut down a plant in Washington and moved it to SC that would be a far different matter.
I found it interesting that the judge in the case is trying to force a settlement. I think that would set an unfortunate precedent (not legally, but practically) since it would signal to unions that they can extract concessions by simpling raising a very dubious claim whenever an employer wants to set up a plant elsewhere. I also wonder to what extent the judge might be engaged in presidential politics. I know one fellow who would very much like this to go away before the next election.
I have choices too
Airbus, for one.
Seriously?
Um, don't know if you've read any recent laws or anything, but it is illegal for businesses (not consumers) to make decisions based on certain categories. For example, US Air could not refuse to sell you a ticket because you are male or because you are white. Similarly, businesses cannot retaliate against employees for filing sexual harassment suits (even if those employees cause delays and increased costs, etc.).
Given that unions are protected by the Sherman Act (among others, but lets face it Sherman is the most organic of the bunch), I think it's perfectly fair to say that retaliation for union activity is similarly out of bounds. You may not think it worthy of protection, but the analogy to your decision to purchase a ticket is goofy. Americans, as a society, have deemed union activity worthy of protection and have codified that protection into law. Asking Boeing, who makes billions of dollars of money off of taxpayer-funded government contracts, to respect and obey those laws is fair, reasonable and just.
Yes, the damn fools
Yes, the damn fools apparently said out loud just what they were thinking! That strikes are expensive, and the probability of a strike in SC is much lower than in WA. If they'd only said they were investing in SC for the warmer, dryer weather! Too late now - shutter the plant, fire the new hires - BA is guilty of thought crime!
And the clear lesson to all unions, get a strike or two on the record ASAP! Never know what wonderful things may flow from such behavior.
Boeing in SC
The complaint was brought in large measure because Boeing executives said in public and very specifically that they were setting up the SC lines because of the strikes in Seattle. If the executives had said the new production line was placed in SC due to lower costs, no action. If you're stupid enough to wave a red flag in front of the NLRB you deserve to get hauled up.
Boeing Exec Incompetence
Living outside of Seattle and reading about this company quite frequently in the newspaper, one gets the distinct impression that the Boeing execs are rater weak. They enlisted Sen Murray to help withe the negotiations re having the 787 second line in Wash state. She was still talking to the union when the announcement was made in Charlotte. In iother words she was sent on a fools errand and used. Her spokesman replied that she would still work w/Boeing re jobs in Washington. Left unsaid was screw you, if you want help for the st Louis plant defense contract.
Some university professors have written and published a book highly critical of Boeing's relationship with management, after years of study. It's not just the machinists.
The outsoucing of the design and the development of the 787 was an absolute fiasco. Boeing gave away all the intellectual property rights to the wing box, etc by giving the desigh responsibility to overseas suppliers. Even the machinists can figure out the future after this.
All projects are delayed. The wedge tail, sold to the Austrailian Air Force was years late. The 767 cargo design is late even though people in Canada and Isreal can modify exixting 767's for cargo.
While the NLRB issue will be solved in Boeing's favor, management remains a collection of dolts.
And for you Ford fans out there, The Ford honcho was at Boeing when the decision was made to outsource the design of the 787.
If Boeing Loses
If Boeing loses and is forced to close its plant in South Carolina (or suffer similar adverse consequences) would this ultimately be a victory for labor unions? I'm skeptical.
The lesson that would likely be taken by businesses and by new investors in the United States (say, a Japanese auto manufacturer) would be to never, ever, set up a plant in a union shop state. To do so would mean that they subject to the threat of litigation (legitmate or graymail) if they ever wanted to expand into a right to work state.
Another aspect of this controversy that has, to my knowledge, escaped much comment, is that "right to work" states, such as South Carolina, don't prohibit unions. The union representing Boeing workers in Washington is perfectly free to hold an election in South Carolina and, if the workers so choose, the union can represent them there. Of course, this would not mean that every worker would be forced to join the union or have dues docked automatically from their pay, but it would mean that, just as in Washington state, the union can bargain with Boeing on wages and conditions. That might not play heavily in resolving the legal issue, but I think it should play heavily on the policy issue. The media, I think, is generally giving the very false impression that, because Boeing is setting up shop in South Carolina, the union cannot represent workers there.
In discussing "right to work"
In discussing "right to work" you neglect to mention that the workers who choose not to join the union and pay dues still get to reap the rewards of union efforts to obtain better wages, benefits and working conditions. what "right to work" does is allow some workers to free ride on the effort and money of their co-workers.
The reason this case has
The reason this case has reached the stage it has is because Boeing executives made public statements to the effect they were retaliating against the union for excercising its constitutional and statutory right to strike when negotiating a new CBA after the old CBA hade expired. I also note that one of the reasons D.C. and media elites don't care about mass unemployement is because the union movement, after 40 years of mostly hostile NLRB boards filled with appointments from Nixon through Reagan, Bush I, and Bush II and Clinton's anti-manufacturing policies of the "strong dollar" while negotiating NAFTA and China's admission to the WTO has reduced union membership down to 7% from 35% in the mid-sixties. This has pretty much made the U.S. in effect an oligarchic republic where the a few thousand CEOs and owners can pretty much select who is President and who goes into Congress. This is probably the last stand of the old New Deal order before we transition to the world of "Blade Runner."
It is all Boeing's Fault
Boeing complained about the losses from the last strike, but strikes can be avoided and usually happen when management is trying to put one over on labor (like the NFL owners are currently doing).
Boeing could have bought labor peace for a reasonable cost and decided not to do so and then actually had the stupidity to say it was opening in South Carolina due to the strike! Fools!
Indeed, the NLRB case against
Indeed, the NLRB case against Boeing is a "don't ask/don't tell" issue. Boeing is only liable because they told the truth to the press and their stockholders about why a plant in the South was a good idea.