Boeing's decision to move to South Carolina has turned into a legal nightmare 

Bad Dreams

Operations at Boeing's Dreamliner plant in North Charleston should begin with in a month

Photos courtesy of Boeing

Operations at Boeing's Dreamliner plant in North Charleston should begin with in a month

Last week, South Carolina's top politicians gathered together to celebrate the official opening of Boeing's Dreamliner plant in North Charleston. But this week, the U.S. House Committee on Oversight and Government Reform will conduct hearings in the city on a lawsuit filed by the National Labor Relations Board against the airline manufacturer. At issue is whether Boeing illegally retaliated against its unionized workforce in Washington state by building a second Dreamliner plant in North Charleston, a move that will create an estimated 3,800 new jobs in South Carolina.

Prior to the announcement, Boeing had pursued plans to create a second plant in Everett, Wash., but the company nixed that idea when the workforce refused an agreement that would have barred them from striking for 10 years. The airline manufacturer's original Dreamliner plant is still in operation, and it appears that Boeing has no intention of ending operations there. Since the announcement of the North Charleston plant, some 2,000 jobs have been created by Boeing in Washington.

The National Labor Relations Board has said that Boeing's decision to build a new Dreamliner plant in the Palmetto State is tantamount to union busting. And in a lawsuit filed in April, the NLRB sent a strong message to big business that the labor agency might be upping its game when it comes to pro-labor positions. Under President Barack Obama, Democrats now control the five-member board, and the suit shows a shift from its more pro-business orientation under George W. Bush.

"The NLRB is doing its job," says Donna DeWitt, president of S.C. AFL-CIO, the state's leading labor organization. "The problem has been it has not been doing its job for a couple of decades."

The board's complaint is a strong one: It aims to yank Boeing out of South Carolina and drag the aerospace giant back to Washington so a unionized workforce can assemble the jetliner there. At the time the suit was filed, Boeing Executive Vice President J. Michael Luttig called it "frivolous."

However, Hoyt Wheeler, a retired professor of business management at the University of South Carolina who taught classes on collective bargaining and works as a part-time labor arbitrator, says the suit has merit.

"The charge is that Boeing made the decision to locate this particular production line here rather than in Washington in order to punish the union and its workers for having struck in the past and in order to intimidate it with respect to strikes in the future," he says.

In 2009, the S.C. General Assembly lured Boeing to North Charleston with a packet of incentives. But officials with the air giant later said problems the company had encountered with strikes by union workers — four over a 22-year period — led it to move to South Carolina, a right-to-work state with one of the lowest unionized workforces in the nation.

In 2008, the International Association of Machinists and Aerospace Workers, a union that represents much of Boeing's Washington workforce, had gone on strike for 58 days. Many credit these strikes with contributing to the embarrassing and costly delays involving the 787. (Prior to the Dreamliner announcement, Boeing workers in South Carolina voted to disband their union.)

"The [NLRB's] argument is that by making the public statements that Boeing made, what they did was indicate that the reason they were doing this was to punish the workers for having done something they had the legal right to do, which was engage in strikes," Wheeler says. "And that's the case."

As it turns out, if an anti-union attitude was what Boeing was seeking, it found a comfortable foothold in the Palmetto State. In December, Gov. Nikki Haley appointed a lawyer with a long history of union busting to head the state's labor agency. At the time, Haley said Catherine Templeton, the new director of the Department of Labor, Licensing and Regulation, would help her "fight the unions" — specifically helping to block unions from organizing at the Boeing plant. Since then, Haley's anti-union rhetoric hasn't died down. Shortly after the NLRB brought its lawsuit, Haley called the tactic "heavy handed" and vowed to "talk smack" to the unions.

But Haley's smack talk has also earned her and Templeton a lawsuit of their own from the International Association of Machinists. Haley and Templeton have asked a judge to dismiss the suit, and a hearing on it was scheduled to take place on June 13.

"What [Haley] is doing is taking away the right of every employee to make a choice under the right-to-work law," says DeWitt of the state AFL-CIO, "because the right-to-work law says we can't intimidate and force them to join a union but the employer can't either. They have a choice there, and she's saying, 'There's not going to be a choice. We're not going to have any unions in South Carolina.' "

Naturally, the whole issue has caused hyper-partisan political drama, especially in this early GOP primary state. Lately, potential Obama-slayers have been making the rounds here, sidling up to Haley in an attempt to appeal to a state full of Republican voters that have accurately predicted the party's eventual nominee since 1980.

At a Tea Party convention held down the block from the first GOP presidential debate on May 5 in Greenville, Haley said she wanted to know each candidate's position on the lawsuit. During the Fox News-hosted televised debate shortly after, the cameras frequently found a smiling, nodding Haley in the audience each time the candidates stuck up for Boeing in their fight against the NLRB.

More recently, Republican Congressman Tim Scott, who represents the 1st U.S. Congressional District, said he personally asked Obama to intervene in the lawsuit. "[The president's] response was ultimately this has become a legal issue, and ultimately, it's challenging for him to weigh in," Scott told The Post and Courier about his encounter.

U.S. Sen. Jim DeMint, a darling of the Tea Party, has been more colorful. He recently told the National Review that the situation "borders on tyranny" and "smacks of a Third World–type dictatorship." He added that the implications reach far outside the boundaries of South Carolina; after all, the NLRB has more or less proclaimed that the U.S. government can decide if, when, and where a company can expand or relocate. DeMint has also filed a Freedom of Information Act request that seeks communications between the NLRB, the Obama administration, the International Association of Machinists, and other members of Congress.

Meanwhile, an aide to U.S. Sen. Lindsey Graham told The Wall Street Journal that the state's senior senator was considering cutting funding for the agency.

Midlands Republican Congressman Joe Wilson and Rep. Trey Gowdy, of the Upstate, have also come out swinging against the NLRB. S.C. Attorney General Alan Wilson, a Republican, issued an opinion that slammed the lawsuit as well.

USC's Wheeler finds the seemingly coordinated Republican attacks on the NLRB troubling. "It is really horribly, terribly improper and really a corruption of the system for all this political pressure to be brought to bear for a federal agency to try to get it to back off from prosecuting what they believe is a violation of the law," Wheeler says. "One can argue the merits either way, but all this hullabaloo and political pressure — threats to the funding of the agency, Jim DeMint calling them thugs — it's really over the top, and I think it's political opportunism."

Wheeler has also been a management lawyer and has worked with the NLRB for close to half a century. His son worked for the agency for about a decade. "So I know it pretty well," he says. "And it does not pay political debts for the president. I mean, that's just not what's going on, and that's what's being alleged. And from talking to people that I know, I know people have come to believe that, that somehow this is part of some great conspiracy."

For Obama's part, he has chosen to stay out of the fight, but his recent pick for secretary of the U.S. Department of Commerce has raised eyebrows. The president nominated John Bryson, a former CEO who serves on Boeing's board, for the post. Meanwhile, the mayors of the state's two biggest cities, North Charleston's Keith Summey and Charleston's Joseph P. Riley Jr., have defended Boeing from the perceived attacks by the NLRB. (Riley is a Democrat while Summey is a Republican.)

Riley is not the only powerful state Democrat taking issue with the actions of the NLRB. South Carolina's lone Democrat in the U.S. House of Representatives, Assistant Minority Leader James Clyburn, is decidedly pro-Boeing.

Clyburn spent an hour last week with the company's CEO, Jim McNerney. Clyburn said McNerney thanked the congressman for the position he's taken on Boeing. "My opinion is that Boeing came here as the result of a very sound business decision ... and I don't know how I can say it any better than that," Clyburn said at a roundtable for reporters in Columbia on June 6. "I'm not in the business of demagoguing this issue, and those people who see some political benefit in demagoguing, that's fine."

Clyburn said that some people might say the issue is about unions, but to him it's about something else. "When you look at Charleston and the trained workforce that's there, you look at the tech schools down there and what they're capable of doing, if it were not for that, they wouldn't have come to Charleston," he said of why the company chose to relocate. "It's just that simple."

Despite his pro-Boeing position, Clyburn says he's one South Carolina politician you'll never hear being critical of labor unions. He says, "I am pro-business. I am pro-union. I am not anti-business. I am not anti-union," he says.


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