During contract negotiations with Boeing, the International Association of Machinists (IAM) agreed to drop their charges against the company for building a new plant in South Carolina. This is a victory for conservatives. The National Labor Relations Board’s (NLRB) attempt to dictate where businesses invest has failed.
The IAM is spinning this as a victory, claiming that in exchange Boeing will build their new 737 Max planes in Washington State. However, if Boeing did want to build their 737 plant elsewhere, the promise of dropping charges would not be nearly enough to change their mind.
This deal looks a lot like a face-saving way for the IAM and the NLRB to give up. Boeing had probably already decided to build the 737 Max in Washington (though we cannot know that for sure) and that is why they agreed to the “deal.” On the union side, the IAM knew the courts were very unlikely to shut down the South Carolina plant, while the NLRB itself will soon lack a quorum — and ability to act.
The union movement took a lot of heat for trying to destroy jobs in South Carolina. The Obama administration would have a difficult time defending it on the campaign trail. Today’s contract allows the IAM and the administration to back down without formally admitting they made a mistake. Hopefully they have learned a lesson: The government should not try to dictate to businesses where they can and cannot invest.
— James Sherk is a senior policy analyst in labor economics at the Heritage Foundation.