The National Labor Relations Act of 1935 recognized the rights of employees to be represented by unions in negotiations involving employee compensation and workplace conditions.  The law also formed the National Labor Relations Board (NLRB) to adjudicate complaints as to whether any action of an employer or union was deemed an “unfair labor practice.”  The NLRB was also endowed with the right to direct employers or unions to remedy unfair practices and to assess fees or other penalties.  Upon a ruling the NLRB’s general counsel seeks an order in federal court  to compel its remedies upon the offending party.

The law makes it illegal for employers to retaliate or threaten retaliation should an employee take part in a strike.  The International Association of Machinists and Aerospace Workers conducted strikes against Boeing in 1977, 1989, 1995, 2005, and 2008, each time shutting down production of Boeing airliners and costing the company millions of dollars.

787 Dreamliner - Photo by Dave Sizer

787 Dreamliner - Photo by Dave Sizer

Boeing’s new airliner, the 787 Dreamliner, was designed and is being built at their Puget Sound assembly plant, where 3 planes are completed each month.  The demand for the plane has grown dramatically and in late 2009 Boeing determined a second production line for the 787 Dreamliner was required.

Boeing executives decided that the loss of production during past strikes would not be financially tolerable on a second 787 Dreamliner production line, and sought out a location in a ‘Right to Work’ state, settling on North Charleston, South Carolina. South Carolina provided Boeing $170 million in upfront grants for startup costs, plus future tax breaks and Boeing spent nearly $2 billion in constructing the plant.

In April, the NLRB ruled that Boeing’s action represented an unfair labor practice as operating a second 787 line in a right to work state served as retaliation for past strikes and represented a threat to employees in Washington State that future strikes might mean the loss of additional jobs.  The NLRB ruling stated that Boeing must operate the second 787 line in Washington State, must use local suppliers and must tell all its employees about the NLRB ruling.

The problem with the NLRB’s ruling is that Boeing didn’t move any positions in Washington to the new operations in South Carolina.  In fact Boeing has increased its workforce at the Puget Sound and Portland operations by over 2,000 employees.  The plant in South Carolina has no effect on employees represented by The International Association of Machinists and Aerospace Workers.  What it does is reduce the number of new employees that would be subject to union representation as the 2nd production line resides in a right to work state, and reduces Boeing exposure to strikes and monetary losses associated with production stoppages.

The law doesn’t, in any way, prohibit an employer from relocating or expanding operations into right to work states.  More importantly, nothing in the law would prohibit Boeing from taking operations overseas beyond the reach of the unions and the NLRB.  Had Boeing relocated positions in the 1st production line to South Carolina, the union and the NLRB might have had a valid case, however expansion cannot be punitive.  The NLRB’s ruling assumes that opening a plant in a right to work state is an implied threat against current employees in Washington that should they strike in the future the company may move their jobs to a right to work state.

Boeing didn’t need to threaten the union employees in Washington State to make their point, the writing was on the wall long ago.  Businesses have a right to locate their business anywhere they are welcomed.  Businesses locate themselves where the economic conditions are conducive to their business, and work stoppages and the heavy financial demands are not.  The NLRB should thank their lucky stars that Boeing chose to open the new plant in South Carolina instead of South Korea.  The thousands of positions created in North Charleston will help the U.S. economy and in turn benefit every American.

Unions are a dying breed for one simple reason: they make American products often too expensive to compete with those produced overseas.  Unions are the single greatest cause of the loss of manufacturing jobs in the U.S., though federal regulations are a close second.

Boeing’s employees at the plant in South Carolina will be extremely well compensated; on par with those in Washington, but Boeing’s employee costs will be much more predictable and the potential of sudden loss of production will be eliminated.

Never before has the federal government tried to dictate where a U.S. employer located or expanded its business.  Today the Congress held a very rare on-site hearing at the Boeing plant on the NLRB’s actions.  Call it a boondoggle or show, it does hint that the NLRB may have signed its own death warrant.  The NLRB is dominated by political appointees, now heavily Democrat.  The Democrat’s unseemly association with trade unions has been going on for decades, and when the Democrats want to curry union favor (translation: money,) another attack on private business is unleashed.

Actions like this have a chilling effect on private businesses.  Many will think, if they can go after the behemoth Boeing, what stops them from coming after me?  Expect this ruling to decrease business growth in the U.S. and to spur flight to more friendly countries; just what the U.S. economy doesn’t need right now.

This ruling will eventually be overturned in the court system, perhaps even at the supreme court, but years will have passed before this ridiculous ruling heads to the bad Liberal policy dump.  Mr. Obama needs to reign in his Liberal cohorts and stop the anti-business tactics or the U.S. economy will continue to suffer for many decades beyond his failed presidency.  When the economic climate isn’t favorable in one place, businesses move to where they are, so Democrats need to decide if their unholy alliance with unions is worth watching American jobs head to Asia.  If getting union money is their priority, they need to be on the next on the plane headed for the land where American jobs go to die.