Wednesday, May 11, 2011

NLRB's Fundamental Assault on Capitalist Principles

Boeing CEO Jim Mcnerney writing in today's WSJ:

"Deep into the recent recession, Boeing decided to invest more than $1 billion in a new factory in South Carolina. Surging global demand for our innovative, new 787 Dreamliner exceeded what we could build on one production line and we needed to open another.

This was good news for Boeing and for the economy. The new jetliner assembly plant would be the first one built in the U.S. in 40 years. It would create new American jobs at a time when most employers are hunkered down. It would expand the domestic footprint of the nation's leading exporter and make it more competitive against emerging plane makers from China, Russia and elsewhere. And it would bring hope to a state burdened by double-digit unemployment—with the construction phase alone estimated to create more than 9,000 total jobs.

Eighteen months later, a North Charleston swamp has been transformed into a state-of-the-art, green-energy powered, 1.2 million square-foot airplane assembly plant. One thousand new workers are hired and being trained to start building planes in July. It is an American industrial success story by every measure.

Yet the National Labor Relations Board (NLRB) believes it was a mistake and that our actions were unlawful. It claims we improperly transferred existing work, and that our decision reflected "animus" and constituted "retaliation" against union-represented employees in Washington state. Its remedy: Reverse course, Boeing, and build the assembly line where we tell you to build it.

The NLRB is wrong and has far overreached its authority. Its action is a fundamental assault on the capitalist principles that have sustained America's competitiveness since it became the world's largest economy nearly 140 years ago. We've made a rational, legal business decision about the allocation of our capital and the placement of new work within the U.S. We're confident the federal courts will reject the claim, but only after a significant and unnecessary expense to taxpayers."


At 5/11/2011 9:45 AM, Blogger Buddy R Pacifico said...

Alan Wilson is the Attorney General of South Carolina. Wilson had this thought on union state businesses not being able to expand into other states:

"It's kind of like Roach Motel, they can check in but they can never check out."

Why would any company want to set up shop in a union state, if the NLRB enforces Roach Motel status?

At 5/11/2011 9:49 AM, Blogger juandos said...

I'm guessing the NLRB just hate the idea of being called to a question & answer session by Sen. Rand Paul...

At 5/11/2011 10:48 AM, Blogger morganovich said...

"the NRLB - harming non union workers and consumers to favor their own since 1935. your deadweight loss is our gain!"

At 5/11/2011 11:30 AM, Blogger Benjamin Cole said...

This is where the D-Party goes so wrong. Business is not the enemy. Business is the friend.

At 5/11/2011 11:38 AM, Blogger morganovich said...

"the business of America IS business".

man, those were the days.

compare that to the populist drivel from DC today and it's not difficult to see where we're going wrong...

At 5/11/2011 11:50 AM, Blogger Michael Hoff said...

How long before someone just balls up a fist and pops a bureaucrat right in the mouth?

This is why I'd be a bad corporate lawyer.

At 5/11/2011 2:21 PM, Blogger Mike said...

I don't know very much about the rules they agreed to when they negotiated their labor agreement in Washington, but it seems that Boeing could have more easily moved operations to another country than to S.C.
Would someone please tell me that I'm mistaken?

At 5/11/2011 3:31 PM, Anonymous Anonymous said...


Boeing can do anything they legally want to do. Their "crime" was saying they were building a plant in another location to avert strikes by a legal union. They should have known better because that is a clear violation of the NLRA that forbids union member intimidation. Corporate executives get paid millions of dollars to not make mistakes like that, so don't blame the union for their mistakes.

You have a choice to believe the Boeing executives were dumb or they were making a strategic speech to influence future negotiations through intimidation. There really is no other choices. Which choice do you want to believe?

At 5/11/2011 4:17 PM, Blogger Hydra said...

How were they able to build in a wetland?

At 5/11/2011 4:46 PM, Blogger Mike said...

I don't want to believe either until I know more about it. My first reaction would be that it's silly to label competitive business practice as intimidation. Couldn't a 3rd option be that Boeing is smart to ride what appears to be an anti-union wave across many states to get out of a deal that they feel is not in their best interest?
I understand that not everybody feels that way.
Just curious, I fired my old lawn guy the other day who I've had for years because he kept raising his price... so, I hired a new one that charges less. Am I guilty of intimidation? I'm guessing my old guy doesn't like me much, but my new guy loves me...I win, my new guy wins and the people who will end up getting my left-over money win.
Funny thing, my old guy could have kept his job if he'd just not tried to go above the prevailing rate and promised to show up every week.

I don't look at what I did as dumb or smart, just obvious. And the only intimidation I could see is if a 3rd party stepped in and told me that I had to keep paying the old guy more just because I had been. Why wouldn't Boeing have the same right?

Really wasn't my question though. My question was: if Boeing had just decided to close and move this operation to Mexico, would that have been less difficult than the proposed move to S.C.?

At 5/11/2011 5:01 PM, Anonymous Anonymous said...


If Boeing just decided to move anywhere, they can. The problem was they made official statements they should not have made. The statements could be determined to be illegal using current labor law. That's why Boeing is in court. It's pretty bad when you provide the only evidence needed for the other side. No evidence--no case.

The NLRA law is clear. Section 7 gives the employees the right to collectively bargain and Section 8 says the employees cannot be interfered with during that process. You simply cannot make statements or take action to intimidate union members. How can saying you are building somewhere else because of strikes and not business reasons such as wages or work rules not influence current or future negotiations?

That you don't understand the NLRA is understandable. That Boeing doesn't is not.

At 5/11/2011 5:36 PM, Blogger Mike said...

You're right, I don't understand the NLRA.
For example, how could striking workforces not be considered a business reason when delivery deadlines are so important?

IMO, the worst thing Boeing could do to these union members is not to tell them why their jobs are in jeopardy, leaving them with only the union side of the story and a gut full of hard feelings.

Maybe I'm just a simpleton, but I think unions need to get in to the business of competing instead of competing with business in PR-land.

Boeing may have broken a law/rule, but I guess it doesn't much matter to me if the law/rule was silly to begin with. If it's cheaper for them to build a whole new factory and move than it is to just do biz...clearly, something is screwy.
Boeing can't tell the union that they will move for fear of strikes, but the union retains the right to strike, shut down Boeing and ruin their business.

I'm sorry. I understand what you're saying, but I'm still not getting it.

At 5/11/2011 7:08 PM, Blogger Che is dead said...

"Boeing can do anything they legally want to do. Their "crime" was saying they were building a plant in another location to avert strikes by a legal union. They should have known better because that is a clear violation of the NLRA that forbids union member intimidation."

You continually assert this, in post after post, as if it were an established fact. Boeing executive vice president and general counsel Michael Luttig also happens to be a former federal judge who was on the White House short list for a Supreme Court appointment begs to differ:

"A number of these statements, which are critical to your case against Boeing, fundamentally misquote or mischaracterize statements by Boeing executives and actions taken by the Company ... First, Boeing did not, as alleged by NLRB, "transfer" any existing work being done by unionized employees in Washington state to the new plant in South Carolina. Second, the board complaint misquoted Boeing Commercial Airplanes CEO Jim Albaugh as saying the prospect of "future strikes" was a prime reason for the move to South Carolina. Third, the NLRB cannot quote any Boeing executive saying the South Carolina decision intended to "punish" the company's unionized employees because none made such a statement ..."

Interesting how in Walt's world threatening a strike which could cost the company billions and jeopardize it's existence isn't intimidation, but saying that the company will move to a more business friendly part of the country in order to escape that same threat is.

At 5/11/2011 8:07 PM, Blogger cluemeister said...

The day my employees come to me and say they are unionizing is the day I decide to downsize and become a one man operation.

At 5/11/2011 11:52 PM, Blogger Willaim said...

The Obama administration is trying to create amongst public and private unions a strong base of rent seekers who are permanent clients of the Democratic Party. These is the result of corrupting the rule of law in the service of the UAW in the Chrysler bankruptcy priorities, and now buy expanding “unfair labor practices” to new activities. These unions will now be permanent clients of the Democratic Party just like unions for example in Peronist Argentina or Italy are permanent clients of particular parties, or prior to Mrs. Thatcher the miners were attached to British Labor Party. At the last Democratic National Convention approximately 40% of the delegates were union members; many time the national rate of membership.

At 5/12/2011 7:31 AM, Anonymous Anonymous said...


You might decide not to hire black people or old people, but you don't want to make a public statement saying that. I bet the legal department at Boeing had a heart attack when they read Boeing said they were building elsewhere over legally protected union activities such as strikes.

The NLRA is archaic, but it is what it is, and it is pretty clear you can't say what Boeing executives said, and they should certainly know that. So again, either the statements were dumb or a strategic move on their part to illegally influence current or future negotiations. Look for a slap on the wrist for Boeing from the NLRB as their decision. The remedy asked for of shutting the S.C. line down will never happen, and it shouldn’t.


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