The Corner

‘Boeing’s Threat to American Enterprise’

. . . is the title of Thomas Geoghegan’s piece today in the Wall Street Journal.

There’s much in the article to comment upon, but I’ll confine myself to his observation that “there’s little bar to a runaway shop if the CEO is careful with his public statements.” This presumes that Boeing’s location of its 787 Dreamliner plant in South Carolina constitutes a “runaway shop” remediable by an NLRB restoration order. That presumption is problematic.

Save for an appearance on the Bill Bennett show last month, I’ve refrained from commenting on the particulars of the Boeing case, in part because the hearing before the administrative law judge began only last week and salient facts have yet to be adduced. Nonetheless, based on undisputed, publicly available facts, Boeing’s placement of the plant in South Carolina doesn’t make this a standard ”runaway shop” case.

In a typical “runaway shop” case, the employer moves some or all of the work work presently being performed in its unionized Mayberry facility to a nonunion facility in Green Acres. The employer does this to avoid the costs and restrictions related to being unionized. The employer moves the work without giving the union an opportunity to bargain about labor costs and make them more competitive with the nonunion operation. The union plant is either completely shut down or some of the operations are eliminated, often with machinery and other equipment being transferred to the nonunion shop. Invariably, some or all of the employees in the Mayberry facility lose their jobs.

In the above scenario, the NLRB may issue a “restoration” order, requiring the employer to return to the status quo ante and give the union an opportunity to bargain in an effort to retain the jobs in Mayberry. In the Boeing case, however, no existing work or machinery was transferred from Washington to South Carolina, no unionized Washington employees lost their jobs (in fact 2,000 jobs were added), and the General Counsel doesn’t even allege that Boeing refused to bargain with the union in violation of Section 8(a)(5) of the National Labor Relations Act. As former NLRB chairman William Gould says, the General Counsel’s complaint is unprecedented.

Even if the General Counsel can establish that Boeing violated the NLRA, there are at least two other remedies-related problems with the General Counsel’s case that I’ll address in the next few days. Suffice it to say that Boeing’s South Carolina plant isn’t going anywhere soon.

— Peter Kirsanow is a former member of the National Labor Relations Board.


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