TOPICS > Economy

Boeing Battle: Was Dreamliner Move to S.C. Legal or Strike Retaliation?

June 17, 2011 at 12:00 AM EDT
A new $750 million Boeing factory in South Carolina is at the heart of a controversial National Labor Relations Board case. It was opened as a second location to build 787 Dreamliner jets after a series of union strikes in Washington state plants. Margaret Warner discusses the matter with The New York Times' Steven Greenhouse.
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JIM LEHRER: Next, back in this country, a fight among government, labor and business over the location of a manufacturing plant.

Margaret Warner has our story.

MARGARET WARNER: The fight is over a case brought by the government’s National Labor Relations Board, or NLRB, an independent agency where Democrats currently hold the majority — at issue, a just-opened $750 million Boeing factory in South Carolina, where the company plans to build some of its 787 Dreamliner passenger jets.

The new lightweight planes are already being built at Boeing’s main factory complex in the Seattle area. But after a series of union strikes in Washington State, the company decided to open its second 787 assembly line in North Charleston, South Carolina, a right-to-work state.

In April, the NLRB charged Boeing with illegally retaliating against unionized workers. Hearings in the case began before an administrative law judge in Seattle this week. Separately, a Republican-led House committee held a hearing on all this in North Charleston today.

And, for more, we turn to Steven Greenhouse with The New York Times.

Steven, thank you for joining us.

Flesh out this complaint for us. What is the agency charging is illegal about Boeing putting this plant in South Carolina?

STEVEN GREENHOUSE, The New York Times: Nice to be here, Margaret.

So, the National Labor Relations Board is asserting that Boeing, in deciding to open this plant in South Carolina, is illegally retaliating against workers in Seattle because they had exercised what the Labor Board says was their legal, their federally protected right to strike.

And the union up in Seattle has gone on strike five times since 1977, including a 58-day strike in 2008, which Boeing says cost the company $1.8 billion in losses. So, when Boeing announced two years ago that it wanted to open up a new factory in South Carolina, some Boeing executives said, we’re tired of all these disruptions. That’s a major reason we’re leaving.

And the Labor Board said you can’t punish the workers in that way. That’s illegal. You’re retaliating against them for exercising their right to strike.

Boeing says that’s not quite right. Boeing insists that the main reason it’s moving is for the lower labor costs in South Carolina. So there’s a real difference about the reason why Boeing is moving the plant.

MARGARET WARNER: Now, companies, U.S. companies, have been moving plants south to right-to-work states for decades. Has a case like this ever been filed before?

STEVEN GREENHOUSE: Not quite like this, Margaret.

There have been other cases where, in the middle of a union contract, the company will say, we’re going to close shop and move, and the NLRB will bring a lawsuit and say, you can’t do that. That’s retaliation. You’re violating the contract.

So, the NLRB has moved against companies moving — that have moved plants to the South. I think the problem here is Boeing — according to the NLRB, that Boeing was caught red-handed saying, we’re doing this to punish you for striking and to prevent you from striking again.

And they say that’s illegal kind of suppression of workers’ rights. And folks in South Carolina are outraged by that. They say — and Boeing is outraged. They say Boeing should have the right, like any company, to decide where it wants to locate a plant, and federal bureaucrats shouldn’t get in the way.

MARGARET WARNER: Now, what is the union’s role in all this? I noticed at the hearing this week in Seattle the judge was urging Boeing and the union to settle.

STEVEN GREENHOUSE: Right.

So the machinists brought the case to the National Labor Relations Board, saying that all workers are being illegally retaliated against. They filed a complaint with the federal agency. And then that agency, the Labor Board, decided to move forward with a case saying that Boeing had acted illegally.

So, now the judge in — the administrative law judge in Seattle, who worries that this case is going to go on for weeks, even years, says look, guys, you have got to really try to settle. And it — and he’s trying to forge a deal between the machinists union on one hand and Boeing on the other, and maybe Boeing would commit to build additional planes, maybe decide to locate a whole new line of aircraft manufacturing in Washington State, which would create and guarantee many, many jobs for unionized workers in Washington State.

MARGARET WARNER: Finally, briefly, what’s the political dimension here? Big one.

STEVEN GREENHOUSE: This is — Margaret, this has blown up into a political firestorm.

There’s the little thing, the presidential — the Republican presidential primary coming up, and — that will be in South Carolina. And the Republican candidates are climbing over each other to condemn the Obama administration and the National Labor Relations Board for improperly discriminating against right-to-work states and Southern states.

And also, I think, in South Carolina, there’s a feeling that the federal bureaucrats, the socialists, the regulators, the pro-union forces are unfairly discriminating against, taking advantage of, trying to take jobs away from South Carolina. And South Carolina says we just want to find jobs for our workers. Our unemployment rate is above the national average. This is a great thing — having Boeing come is a great thing for South Carolina. It’s the biggest single investment in the history of the South Carolina.

And they’re just very, very upset.

MARGARET WARNER: So, more to come.

Steven Greenhouse with The New York Times, thank you.

STEVEN GREENHOUSE: Thanks very much, Margaret. Nice to be here.