Did Boeing retaliate?

  • By Michelle Dunlop Herald Writer
  • Wednesday, April 20, 2011 11:06am
  • Business

The Boeing Co.’s decision to set up its second 787 line in South Carolina has been called an act of retaliation against the company’s Machinist union for strikes here in the Puget Sound region.

To remedy the situation, the general counsel for the National Labor Relations Board suggests Boeing establish a second 787 line in Washington state. The proposal comes just months before Boeing opens its newly built 787 facility in North Charleston, S.C.

A hearing over the matter is scheduled for June 14 in Seattle, the labor board announced Wednesday.

“We … recognize the rights of employers to make business decisions based on their economic interests, but they must do so within the law,” said Lafe Solomon, general counsel for the labor board.

Boeing Machinist members applauded the labor board’s move, which was based on allegations originally lodged by the union in March 2010. Boeing officials, however, pledged to vigorously defend the company’s decision.

Analyst Scott Hamilton, with Issaquah-based Leeham Co., called the whole thing meaningless and irrelevant, likening it to the years-long trade dispute between Boeing and its European rival Airbus.

“Boeing has made a $1 billion investment in Charleston. They’re not going to abandon that,” he said. “They would negotiate a settlement with the union if it came to that.”

Hamilton also points out that Boeing essentially already has a second 787 line here in Everett. After selecting South Carolina as home for another 787 final assembly line, the company established a “surge line” in Everett until South Carolina’s line is in place. However, in recent months, Boeing officials have indicated the surge line likely will become permanent.

Spokeswoman Nancy Cleeland said the labor board isn’t trying to tell Boeing it has to shut down its South Carolina site.

“We’re not telling them what to do with it,” she said.

Boeing picked the North Charleston location in October 2009, after a 58-day strike by the Machinists union in 2008. Boeing officials blamed the strike for delaying the delivery of its 787, a plane that is more than three years behind schedule. They also suggested a need to diversify the company’s workforce because of labor strikes in the Puget Sound region.

“By opening the line in Charleston, Boeing tried to intimidate our members with the idea that the company would take away their work unless they made concessions at the bargaining table,” said Tom Wroblewski, president of the Machinists union.

The labor board found merit in the union’s allegations. Boeing’s general counsel, J. Michael Luttig, said the company has the right to build production capacity in areas outside the Puget Sound area. The company criticized the timing of the complaint, given that it has hired roughly 1,000 workers in South Carolina and has almost finished building a new factory there.

“We fully expect to complete our new state-of-the-art facility in South Carolina in the weeks ahead, and we will be producing 787s — America’s next great export — from our factories in both Puget Sound and South Carolina for decades to come,” Luttig said.

Analyst Hamilton doesn’t expect a quick resolution to the dispute over the second line. Instead, he’s worried about how the ongoing clash will affect next year’s contract negotiations between Boeing and the Machinists union.

“I’m concerned it’s going to be a real setback,” he said.

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