Documents prove the Boeing Co. picked South Carolina for a 787 jet assembly line to escape problems with the union despite believing it a high-risk option, Machinists Union officials said Friday.
The internal documents are part of a high-profile labor dispute in which Boeing has been accused
by the National Labor Relations Board of retaliating against the union for labor strikes in the Puget Sound region.
Presented to Boeing’s board of directors in 2009 — they show Boeing officials believed opening the South Carolina plant was the highest-risk option they studied with the highest likelihood of failure. Another option was to open the second line in Everett, where the company was already building the plane.
But the documents also say the South Carolina plan, dubbed “Project Gemini,” would help in “rebalancing an unbalanced and uncompetitive labor relationship.”
One document listing rationale supporting the South Carolina plan said it “creates a non-union, competitive labor choice” and “lowers labor costs and avoids the current hostage situation,” an apparent reference to past strikes at plants in Washington, Oregon and Kansas. The same document also lists other positive reasons for choosing South Carolina, including logistical efficiency, geographic diversity and gaining political support in a key state.
“The Project Gemini documents prove what we’ve suspected all along — that Boeing moved to Charleston to punish our members for exercising their union rights,” said Connie Kelliher, a spokeswoman for the union’s District 751.
A Boeing spokesman had no immediate comment. Boeing has denied it opened the new plant to retaliate against the union, saying it did so for valid economic reasons.
The latest documents were obtained through a subpoena during the government’s lawsuit now pending before an administrative law judge in Seattle. The NLRB brought its case after the Machinists union filed a complaint charging Boeing with violating the law.
The NLRB contends that Boeing opened the second line in right-to-work South Carolina to punish union workers in Washington state over a series of costly strikes, including a 58-day work stoppage in 2008. NLRB assistant general counsel Lafe Solomon wants Boeing to open another 787 in Washington state for unfairly opening the South Carolina one.
It was already known that Boeing executives had made public comments that criticized union activity and mentioned it as a reason to open a new line outside Washington. Boeing officials said those comments were twisted out of context and that just because the company complained about the union didn’t necessarily mean those issues drove the decision to open a new line in South Carolina.
Boeing officials say granting the government relief would force it to close a $1 billion plant and lay off more than a thousand South Carolina workers. The company says the government has no legal right to interfere with business decisions about where to locate production. However, industry observers say Boeing could use the extra 787 production capacity.
The case has become an issue in the campaign for the Republican presidential nomination and GOP lawmakers have used the issue to bash the Obama administration’s economic policies.
The eight-week strike by the Machinists in late 2008 shut down Boeing’s commercial airplane production. The union walkout covered some 27,000 Boeing employees in Washington state, Oregon and Kansas.
Boeing has said the strike was a factor in delays for its new 787 and a new version of its 747. Boeing is delivering its first 787, three years late, on Monday. Other factors included design issues and an electrical fire during a test flight in November.
The documents released by the Machinists on Friday show that Boeing was concerned about an “unbalanced” relationship with the union. The company has long been concerned that its unions have too much leverage with their ability to shut down its production line.
Adding a line in Charleston creates “a competitive labor choice and counterbalance to Union leverage,” the documents say. The documents also note that adding a line in Charleston makes its supply chain and management tasks more complex.
Still, the internal documents said going to South Carolina would have a long-term “negative impact to 787 program profitability.” The new plant would cost between $1.5 billion and $2 billion, “significantly greater” than the cost of keeping the line in Everett, the documents said. Boeing officials also warned the company that the new Charleston workers would not be as productive as those in Everett, increasing the possibility of missed deliveries.
Boeing claims the NLRB can’t make a case of retaliation because no workers in Washington lost their jobs. Instead, the company says, it created new jobs in South Carolina.
But the Machinists estimate that Boeing’s move to South Carolina will cost the Seattle area between 1,800 and 3,000 jobs that should have stayed in the area.
“Those are real people,” Kelliher said. “Boeing shifting jobs from Washington state to South Carolina, how that equals job creation for America? I guess it’s the same math that told them it’s the right business decision.”