NLRB-Boeing Fracas Imperils Obama, Democrats

Tuesday, 21 Jun 2011 06:43 PM

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The National Labor Relations Board’s (NLRB) claim that a Boeing plant was moved to retaliate against a union has ignited a war within President Barack Obama’s administration that threatens the president’s re-election chances and those of other Democrats looking toward 2012.

Union support helped propel Obama into office in 2008, and he ran to unions' aid during the recent battles over collective-bargaining rights in Wisconsin and other states. However, with 2012 looming, Obama finds himself in need of both business and unions and is walking a tightrope between competing interests.

Boeing, NLRBThe dispute stems from Boeing’s decision to open a $750 million assembly plant for its Dreamliner plane in South Carolina. The International Association of Machinists and Aerospace Workers claimed the move was retaliation for a strike in Washington state that slowed production of the plane in 2008.

Obama chose Boeing CEO Jim McNerney to head the President’s Export Council, an organization that offers advice on foreign trade. McNerney has made no secret of his dislike for the NLRB complaint and warned that it could lead to more U.S. jobs heading overseas.

“The NLRB is wrong and has far overreached its authority,” McNerney wrote in an Op-Ed in The Wall Street Journal. “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.

“More worrisome, though, are the potential implications of such brazen regulatory activism on the U.S. manufacturing base and long-term job creation. The NLRB's overreach could accelerate the overseas flight of good, middle-class American jobs.”

So far, Obama, who also nominated Boeing board member John Bryson to be secretary of Commerce, has tried to stay neutral. The White House has been deferring all questions on the matter to the NLRB, which is an independent agency, The Washington Post reported.

However, the administration may not be able to stay out of the fray for long. In addition to McNerney’s broadside, congressional hearings have been convened, and GOP presidential candidates have attacked the decision. Other GOP candidates also are beginning to weigh in.

George Allen, who is seeking to regain the U.S. Senate seat from Virginia he lost in 2006, labeled the NLRB complaint an “attack on job-creating businesses and the economic competitiveness of all right-to-work states” and called on his Democratic opponent, former Virginia Gov. and Democratic National Committee Chairman Tim Kaine, to denounce it.

“The NRLB’s complaint against Boeing is an assault on the economic freedom and competitiveness of all right-to-work states — potentially costing America jobs as companies look for more hospitable environments elsewhere,” Allen said. “Do we really want the government telling our job creating businesses where they are allowed to build plants, hire workers and produce? I certainly don't, but unfortunately my opponent, Tim Kaine, has remained silent on this important issue.”

An investigation by NLRB acting General Counsel Lafe Solomon concluded that Boeing’s move amounted to illegal retaliation against the union. Evidence in the case includes comments by a Boeing executive the Post quoted as saying, “The overriding factor was not the business climate, and it was not the wages we’re paying people today. It was that we can’t afford to have a work stoppage every three years.”

Solomon said the statement was “coercive to employees” and that Boeing’s decision to put an assembly plant in South Carolina was “motivated by a desire to retaliate for past strikes and chill future strike activity.”

The company maintains that the move was to done to lower labor costs and taxes. “This is clearly not an indication of anti-union bias.”

Those on the Democratic side no doubt would like the issue to just fade away.

Union spokesman Frank Larkin told the Post, “As far as the president becoming involved, we see him as leading by example and staying out of it. This is not a matter for politicians to be throwing their weight around on. This is an enforcement issue, and there is a process for handling enforcement issues.”

However, NLRB cases move at a snail’s pace, and this one is just at the starting line before an administrative law judge in Seattle and, barring a settlement, years of litigation are probably ahead. Regardless, Boeing’s McNerney knows where the case could lead.

“U.S. tax and regulatory policies already make it more attractive for many companies to build new manufacturing capacity overseas,” he wrote. “That's something the administration has said it wants to change and is taking steps to address. It appears that message hasn't made it to the front offices of the NLRB.”

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