Washington Job-Destroying Hubris Gone Wild
CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Sunday, April 24, 2011
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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21 Comments:
Link is broken:
http://washingtonexaminer.com/opinion/2011/04/federal-labor-board-seeks-ground-boeing
Thanks Elliott, it's fixed now.
Why doesn't this constitute constraint of trade? Not entirely facetious, but I would think that Boeing has a case against the NLRB to show that this is not selective interpretation of the law.
Have other companies been allowed to move and been halted due to an NLRB hearing?
Of course, Boeing could also take the 'big risk' and threaten to move all the jobs to Europe or China?
Europe, Walt? Out of the frying pan and into the fire? ;)
I thought I'd back that up with an example.
"I thought I'd back that up with an example"...
Pardon me Sprewell but maybe the better example for Boeing to follow would be that of Halliburton...
From Seeking Alpha: Why Halliburton's Move to Dubai Makes Cents
March 13, 2007
In a recent press release Halliburton has announced that they will move their corporate headquarters to Dubai. Dubai is pro free markets and is rapidly becoming a booming area for Western businesses to take interest in. In terms of oil, Dubai is a prime location that can also offer substantial corporate tax savings for businesses...
juandos
I wonder if Mexico might not be a better choice for aircraft delivered to US customers?
"I wonder if Mexico might not be a better choice for aircraft delivered to US customers?"...
That was a question I also considered Ron H but Mexico isn't nearly as business friendly as Dubai is it seems...
There is also this problem that is both ongoing and expensive in Mexico...
Who is the Chairman of the National Labor Relations Board?
Wilma B Liebman
From Wilma B Liebman's bio:
"Prior to joining FMCS in January 1994, Ms. Liebman was Labor Counsel for the Bricklayers and Allied Craftsmen from 1990 through 1993. She served as Legal Counsel to the International Brotherhood of Teamsters for nine years and as staff attorney with the NLRB from 1974 to 1980."
Hmmm
Regardless of how this case eventually turns out, the cost of defending itself is a drag on Boeing's resources. As a result, it will produce less and employ fewer people.
Government is the biggest enemy of labour.
Buddy R. Pacifico,
It is fairly common for Democratic presidents to appoint people with a union background to the NLRB and for Republican presidents to appoint people with a non-union background to the NLRB. We have had Republican presidents 20 of the last 34 years. Who should be ahead playing that game?
I think the NRLA needs to be amended for the 21st century. It does not serve its purpose for a global labor market, but it’s still the law for now.
Boeing needs to put a gag on some executives' mouths. If you read the case (19-CA-32431), you will see Boeing caused their own problems using the current NLRA with a very poor choice of words (obvious Section 7 and 8 ULPs).
Why is it that unions take the blame for managements' inability to manage with poor media relations skills and other blunders? Only an idiot would proclaim there are no legitimate business reasons to move the jobs except to eliminate a unionized workforce. That is clearly an admission of violating protected concerted activity. The Supreme Court allowed legitimate business related speech concerning unions. Violating the NLRA is not legitimate. I doubt if the remedy the NLRB asked for—to not operate the SC plant--would ever be approved. The NLRB has a strong case simply because Boeing screwed up.
"Boeing needs to put a gag on some executives' mouths."
Yes, how dare anyone point out that unions are a cancerous blight on American industry.
Che,
I did not say it was wrong. I said it was dumb. CEOs get paid not to make mistakes like that. I have a ton of Boeing in my mutual fund portfolio, so I am speaking as a stockholder with a stake in the Boeing game.
Instead of saying something legal like this that I can even come up with: "We arrived at the decision to move the line to South Carolina after looking at all the economic factors . . ." This was widely communicated by Boeing:
The investigation found that Boeing officials communicated the unlawful motivation in multiple statements to employees and the media. For example, a senior Boeing official said in a videotaped interview with the Seattle Times newspaper: "The overriding factor (in transferring the line) was not the business climate. And it was not the wages we’re paying today. It was that we cannot afford to have a work stoppage, you know, every three years."
"... Boeing first sought to build the new plant near its existing facility in Puget Sound, but negotiations with the International Association of Machinists broke down when the union refused to agree to a long-term no-strike clause. The IAM had struck four times since 1989, costing Boeing at least $1.8 billion in revenue. That’s when Boeing chose South Carolina, a right-to-work state where, unlike Washington, workers are not forced to join unions."
Examiner
This is all you need to know about the union. The most important thing, as far as they are concerned, is not making sure that their members have secure, high-paying jobs. No, thier priority is retaining the power to extort some future concession by bringing the company to halt, costing it billions and putting it's very survival in jeopardy.
Again, I am not saying the union is right. I am saying Boeing screwed up with their public statements.
But Boeing is doing pretty well under President Obama regardless of the NLRB action.
“When Obama began his export initiative, he named Boeing CEO Jim McNerney chairman of the President’s Export Council. And Boeing has pocketed even more taxpayer loot under Obama than it did under George W. Bush. Obama’s export initiative has included ramping up subsidies from Ex-Im, and Boeing has reaped the benefits. In fiscal 2009, Ex-Im guaranteed $8.4 billion of loans to benefit Boeing, an astounding 90 percent of all of Ex-Im’s loan guarantees. This past fiscal year, according to a recent annual report, Boeing won $6.4 billion in Ex-Im loan guarantees, 63 percent of the total.” (Source: Kyle Wingfield, Atlanta Journal, 4-25-2011)
"Instead of saying something legal ... Boeing officials communicated the unlawful motivation in multiple statements to employees and the media."
Wow, and what was this EVIL UNLAWFUL MOTIVATION? It's the companies determination to remain in business: " ... we cannot afford to have a work stoppage, you know, every three years." This union is a cancer, and the NLRB's decision simply exposes the corrupt bargain between the unions and their political harpies in the Democrat Party.
Walt G.
As always, the union defender no matter what the overarching issue.
"We have had Republican presidents 20 of the last 34 years. Who should be ahead playing that game?"
This is meaningless. It's not a tally of presidents or number of years. The only one that matters is the current one.
"Boeing needs to put a gag on some executives' mouths. If you read the case (19-CA-32431), you will see Boeing caused their own problems using the current NLRA with a very poor choice of words (obvious Section 7 and 8 ULPs)."
For once, I agree with you. It is only the "coercive speech" that is at issue here. The same meaning and intent could have been conveyed with a slightly different choice of words, for instance expressing concern for a strike's impact on Boeing's customers would have been OK.
And, of course taking its current action without any "coercive speech" would have been OK also.
"I think the NRLA needs to be amended for the 21st century. It does not serve its purpose for a global labor market, but it’s still the law for now."
You're right about that. GLOBAL being the keyword. The more difficult it becomes to manufacture aircraft in the US, the more attractive those foreign shores become. Luckily for Boeing, its major competitor in Europe suffers from the same drags on business.
I suppose that the only lessons to be learned from the demise of the US steel and auto industries, is that if a business is "too big to fail", the government may inject its corpse with taxpayer money, so it appears to remain viable.
See if you can disagree with Methinks excellent point. Notice that she said "labour", not "unions". Like many of us, she recognizes the distinction.
Ron H.
My Democratic to Republican comparison was a response to one point made by Buddy R Pacifico. You’re right--It will not hold up to a much deeper discussion.
Labor unions have enough problems without being blamed for CEO mistakes. We pay those guys top dollar to make good decisions.
I think labor law and corporate taxation both must be changed to compete in the 21st century. Adversarial positions between government, labor, and management will just drive the work overseas. We have to work harder to keep our jobs in the U.S. now.
Did you miss inserting a link for methinks?
Yes, Che. You can't legally say what Boeing said. That's interfering with a protected concerted activity. They very simply should have known that. I have occasions where I choose my words very carefully. Knowing when those occasions are is important and the mark of a true professional.
build the plant in china
Walt G.
Sorry, Methinks left a comment on this thread. I thought you had seen it.
Here it is:
"Regardless of how this case eventually turns out, the cost of defending itself is a drag on Boeing's resources. As a result, it will produce less and employ fewer people.
Government is the biggest enemy of labour."
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