Boeing Labor Dispute Is Making New Factory a Political Football

By STEVEN GREENHOUSE

Published: June 30, 2011 - New York Times

NORTH CHARLESTON, S.C. — Boeing’s gigantic new $750 million airplane factory here is the pride of South Carolina, the biggest single investment ever made in a state that is far more associated with old-line textile mills than state-of-the-art manufacturing. In just a few weeks, 1,000 workers will begin assembling the first of what they hope will be hundreds of 787 Dreamliners.

That is, unless the federal government takes it all away.

In a case that has enraged South Carolinians and become a cause célèbre among Republican lawmakers and presidential hopefuls, the National Labor Relations Board has accused Boeing of illegally setting up shop in South Carolina because of past strikes by the unionized workers at its main manufacturing base in the Seattle area. The board is asking a judge to order Boeing to move the Dreamliner production — and the associated jobs — to Washington State.

Companies can generally move a plant anywhere they choose, although federal law bars them from doing so if a move involves punishing employees for exercising their federally protected right to unionize or strike. On several occasions, Boeing executives mentioned past strikes as a reason for the move to South Carolina — most directly, when one told the Seattle Times that the “overriding factor” in the decision was “we can’t afford to have a work stoppage every three years.”

The unusual legal action, filed in April at the behest of Boeing’s principal union, has grown into a political conflagration, fanned by deep resentments between North and South, Democrats and Republicans, union and nonunion workers, and fans and foes of Big Government.

Republican presidential candidates have denounced the case as a symbol of President Obama’s liberal agenda because he appointed the labor board’s top officials. This week, Mitt Romney called the labor board’s case a job killer. Newt Gingrich has proposed terminating the board’s funding, and Tim Pawlenty said the case evokes “the Soviet Union circa 1970s.”

At a time of great economic anxiety, the case raises questions about the federal government’s role in promoting — or impeding — corporate investment and job creation.

Facing so much heat, Mr. Obama said on Wednesday that he did not want to discuss details of the case because the N.L.R.B. was an independent agency.

However, “as a general proposition, companies need to have the freedom to relocate,” he said. “We can’t afford to have labor and management fighting all the time, at a time when we’re competing against Germany and China and other countries that want to sell goods all around the world.”

Business and government leaders in the South argue that the labor board is undermining Boeing’s competitive advantage, and they are particularly incensed that officials seem to be favoring unionized workers and plants.

“This is a huge issue because economic development in the South has really been accelerated by the growth of nonunion plants,” said Merle Black, a political science professor at Emory University. “This case directly threatens the Southern model of economic development.”

For South Carolina, the Boeing plant means far more than just the thousands of jobs it will create directly and indirectly. Boeing is a marquee company, and state leaders hope its presence will help erase South Carolina’s lingering image as an industrial backwater.

“Boeing was a dream come true for South Carolina,” said Gov. Nikki R. Haley in an interview. “They came in and brought the hope of the American dream to this state to create real, good-quality jobs.”

Those kinds of jobs are hard to come by in the Charleston area.

“Everybody I talk to here is excited about this plant,” said one worker, Wayne Gravot. On a recent day at the plant, which is the size of 12 football fields, he and five co-workers were practicing drilling through carbon fiber — a lightweight composite material, as hard as metal, used for much of the Dreamliner’s body.

“It’s a good job, a secure job,” said Mr. Gravot, 45, an Air Force veteran and father of two. Not long ago, he was laid off from a medical devices company and he does not want to end up unemployed again.

The outcome of the case may not be certain for years, as it winds through N.L.R.B. proceedings and likely court appeals. If Boeing loses, it could be ordered to move its three-a-month Dreamliner assembly line from South Carolina to Washington State.

As Ms. Haley and South Carolina’s members of Congress see it, federal bureaucrats have no right to snatch away the state’s prize or tell a global company where to locate a factory.

Like many Republicans, Ms. Haley holds President Obama responsible. “He didn’t just slap South Carolina, he slapped a great company that chose to do business here,” she said. “The president talks about doing something to create jobs — that’s the last thing he’s doing here.”

Board officials say that they have never discussed the case with the White House.

Increasing the sense of disbelief for many here in South Carolina, the board filed the case just as the new plant was nearly completed. Production is scheduled to begin in mid-July.

The case stems from a complaint the International Association of Machinists and Aerospace Engineers filed last year, asserting that Boeing was illegally retaliating against its members in Washington State for exercising their right to strike. Those workers have gone on strike five times since 1977, including a 58-day walkout in 2008.

Christopher Corson, the machinists’ general counsel, said, “Boeing broke the law, and there are consequences when someone breaks the law.”

Boeing officials deny violating any labor laws, saying that the main reason they chose South Carolina was to lower production costs. On Thursday, an administrative law judge in Seattle denied Boeing’s request to dismiss the case.

Connie Kelliher, a spokeswoman for the machinists, said the union was not seeking to shut down the South Carolina plant. In its settlement negotiations with Boeing, the union has suggested that the company keep the plant operating by moving some outsourced parts production from other countries to South Carolina — an idea that Boeing and industry analysts consider unrealistic.

For the machinists, the stakes are high. They fear that if Dreamliner production is allowed to go forward in South Carolina, then much of Boeing’s future expansion will take place there.

For South Carolina, battered by the closing of textile mills and furniture factories, the plant is equally vital.

“These things come along at best once a decade,” said Douglas P. Woodward, an economics professor at the University of South Carolina. “It’s as big as anything that’s happened to South Carolina since BMW.”

Indeed, BMW opened near Spartanburg in 1994, with 1,200 workers. Since then, employment has expanded to 7,000, and officials say the factory has produced 21,000 spinoff jobs. South Carolinians are hoping for a similar trajectory with Boeing.

“If Boeing takes off, South Carolina will soar with it,” Professor Woodward said.

A version of this article appeared in print on July 1, 2011, on page A1 of the New York edition with the headline: Boeing Labor Dispute Is Making New Factory a Political Football.