Neither side is budging in an increasingly bitter fight over aerospace giant Boeing’s plans to start production on its 787 Dreamliner fleet at a new $2 billion plant in South Carolina — a move the National Labor Relations Board says was made to punish the company’s union workers.
NLRB officials insist they are simply enforcing existing labor laws, relying on statements and internal evidence from Boeing that they say clearly show company officials discussing the South Carolina investment as a way to circumvent its union, in violation of federal law.
But Boeing, leading business groups and nearly two dozen Republican senators say the board — now dominated by President Obama’s appointees — has greatly overstepped its authority and interfered with a private business decision, all to placate Mr. Obama’s labor supporters.
“Why should companies invest in expanding business in the United States if, at the drop of a hat, a federal bureaucrat can simply reverse that decision and destroy that investment?” asked Sen. Orrin G. Hatch of Utah, one of 19 GOP senators who signed a letter to Mr. Obama last week vowing to block the nominations of top NLRB officials if the Boeing decision is not reversed.
The Business Roundtable, a collection of some of the nation’s largest corporations, said in its statement that the April 20 NLRB action, which calls for Boeing to bring the jobs planned for South Carolina back to Washington state, “represents a drastic departure from NLRB and Supreme Court precedent.”
While relatively obscure, the NLRB has long been a flash point in union-management relations. Labor leaders complained the agency did little to protect union rights and collective bargaining under former President George W. Bush, and now business groups fear the Obama-dominated board will take an activist stand against business interests.
The Boeing complaint has also caused an uproar in South Carolina, long a right-to-work state, where GOP Gov. Nikki Haley, the state’s two Republican U.S. senators and many of the state’s leading newspapers warn the NLRB action has put in jeopardy a major job-creating investment for the state.
“No government agency should inflict such pointless expense on companies for making what have long been legal business decisions,” the Charleston Post and Courier said in an editorial.
The stakes in the case are not trivial, with workers putting the finishing touches on what will be a $2 billion manufacturing facility for Boeing in South Carolina that has already created some 1,000 local jobs.
Chicago-based Boeing, the worlds largest aerospace company, wanted to start production on its highly touted Dreamliner fleet at a new plant in North Charleston, S.C., in July, to supplement production at the company’s existing unionized operations in Washington state.
In its defense, Boeing notes that it isn’t cutting jobs or production in the Puget Sound area of Washington state and has added more than 2,000 positions there since the 2009 decision to open a second production plant elsewhere.
“If this is Boeing’s way of intimidating employees,” said Fred Wszolek, spokesman for Workforce Fairness Institute, an advocacy group that has long been critical of the NLRB, “it sure seems like a strange way of going about it.”
But the International Association of Machinists and Aerospace Workers in Seattle, backed by the NLRB, wants the second facility to be based in Washington as well. They argue that Boeing originally planned to build the plant there, and that the company changed its mind to punish the union for past strikes. They have videotapes they think can prove this allegation.
“The key thing here is motivation,” said NLRB spokeswoman Nancy Cleeland. “In our complaint, we allege they made it very clear to the union members they were doing this to retaliate against them.”
Boeing contends that shifting some for the Dreamliner production to North Charleston is a smart business decision, not a means of retaliation.
“We’ve been upfront about the fact that one of those reasons [for the South Carolina plant] had to do with the history of strikes we have had in Puget Sound,” Boeing spokesman Tim Neale said. “We believe that legally companies are entitled to take things like labor history into account when deciding where to invest.”
Boeing was caught off guard by the complaint. The stakes are much higher now with reports circulating that the company has already invested $2 billion in a nearly completed facility.
But the NLRB said it warned Boeing of the investigation more than a year ago in March 2010.
Mr. Wszolek said the NLRB action is chilling business investment across the country. Boeing’s investment could be for naught, while suppliers who started investing in the area will also be harmed, he said.
“It’s a ‘job-destroying machine,’ ” he said, adding new uncertainty to investments in right-to-work states and, potentially, forcing American manufacturers to consider investing overseas.
In their letter to Mr. Obama last week, the 19 GOP senators demanded he withdraw his nominations of NLRB Acting General Counsel Lafe Solomon and board member Craig Becker — the two men who are largely seen as responsible for the complaint.
The senators say Mr. Obama was “circumventing the will of the U.S. Senate” when he appointed both Mr. Solomon and Mr. Becker to their NLRB posts. The Senate rejected Mr. Becker’s nomination in February 2010, and never got a chance to vote on Mr. Solomon, a career NLRB attorney.
Separately, a group of attorneys general from nine states also demanded the NLRB withdraw the complaint. The initial court date for the complaint is set for June 14, but it could take months or years to resolve.
The NLRB filed its complaint against Boeing on April 20. Despite the uproar, Mr. Solomon insisted in a statement Monday that the agency was standing its ground.
“Contrary to certain public statements made in recent weeks, there is nothing remarkable or unprecedented” about the Boeing action, he said in the statement.
“The complaint involves matters of fact and law that are not unique to this case, and it was issued only after a thorough investigation in the field, a further careful review by our attorneys in Washington, and an invitation by me to the parties to present their case and discuss the possibility of a settlement.”