Why the Suit Against Boeing is Bad for America

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It’s critical for our Grandchildren’s future that labor and the NLRB recognize America is now competing in the 21st century global economy. 

I’ve been following the suit by the National Labor Relations Board against the Boeing Company. 

Background – The NLRB alleges that Boeing violated federal labor laws against retaliation when it built the new 787 Dreamliner factory in South Carolina (a right to work state) rather than in the Seattle area (Washington is a closed shop state).  Boeing included expensive, business damaging, strikes at the Seattle area plants among the many reason for constructing the new factory in South Carolina.  Note: The NLRB initiated the action after a complaint by the International Machinists Union that this was unlawful retribution for the strikes. 

My opinion on Unions – Unions have been a key force in giving America’s middle class a fair day’s pay for a fair day’s work.  They help level the playing field involving business AND labor.  Note, I said business AND labor not business VERSUS labor, more on this in a minute.  Unions provide the Ballances to business’s desire to minimize costs, however the laws need to Check union power so that management can manage, including where to locate new facotries. Which brings me to the “business AND labor” concept.  In a global economy American business and American labor need to cooperate to grow business, to expand the pie for all.  “A rising tide floats all boats.” 

Why this suit is bad for America – There are no good outcomes.

First, the NLRB is not objective, being populated by President Obama with former labor leaders.  Second, with so much at stake (in the words of a friend of mine) “It is a safe bet that this one will go all the way to the Big Show (Supreme Court).”

Outcome 1, Boeing wins and operates the S.C. plant – This is the best outcome because it maximizes the number of good [long-term] manufacturing jobs in America, and protects management’s right to manage (locate businesses as they see fit).  The bad part is that a lot of taxpayer dollars will be spent to reach this conclusion.

Outcome 2, Boeing loses the suit and eats the cost of the new S.C. Plant, and builds a replacement in the Seattle area.  Boeing stock goes down and businesses in general are discouraged – both bad for America overall; the cost of the 787 goes up, making the Dreamliner less competitive, resulting in Airbus and other competitors selling more jets, reducing the number of jobs in America over the long term.

Outcome 3, Boeing loses the suit, eats the cost of the new S.C. Plant, and builds a replacement outside the U.S. – More American manufacturing moves out of the country.  See the July 29, 2011 WSJ article on Learjet, manufactured in Mexico.

Outcome 4, Boeing sells the S.C. Plant to minimize losses. – This plant was designed and built to manufacture large aircraft so who might pay top dollar?  Maybe Airbus? American workers building the planes – good; management salaries and  business profits go to foreign countries – bad.  How long before this manufacturing is moved overseas and these American manufacturing jobs are lost?

Outcome 5, Worst Case Scenario, Boeing loses the suit and sells the S.C. Plant to minimize losses. – Who has an overabundance of American dollars to spend?  – Our good friends the Chinese… who buy the plant then move or replicate it.  They have already started building fighters (that Russia taught them how to build) and selling them to former Russian customers.  (See WSJ Dec. 4, 2010)  How long before China is competing with Boeing instead of buying from Boeing?  More American manufacturing jobs lost.

 Proposed path forward

You and I: write to our Congressmen and women.  Tell them to support the bill by S.C. Representative Tim Scot which would prohibit the NLRB “from ordering any employer to relocate, shut down, or transfer employment…”

Machinists Union, District 751 (the real driver behind the NLRB suit): if they withdraw their complaint, the NLRB will drop their suit.  They need to learn wisdom from two groups: 1-U.S. Women’s Soccer Team,  i.e. This game didn’t go according to plan, we can learn from it and move on.  Help the National Machinists organize the Boeing workers in S.C. by providing solid advantages, then don’t bite the hand that feeds.  2- United Auto Wokers (see WSJ, July 25,2011), i.e. Living and competing in the 21st Century global economy. 

 NLRB: Recognize that they play a key role in moving the U.S. into the 21st Century Global Economy.  They need to make decisions based on what is good for our country for the next 20 years, not what is good for a small constituency till the next election. This is crucial to our Grandchildren’s future.  If America is not globally competitive, we will be left behind.

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