NORTH CHARLESTON, S.C. — With the federal government’s labor board stepping into a bitter fight between aerospace giant Boeing and its main union, President Obama faces a political quandary because of his administration’s close ties to both sides.
Obama’s chief of staff, William Daley, and his nominee for Commerce secretary, John Bryson, until months ago both served on Boeing’s board. Obama also tapped Boeing’s chief executive, Jim McNerney, to head the President’s Export Council, designed to help achieve the adminstration’s goal of doubling exports by 2015.
Meanwhile, Obama rode into office with broad support from labor. His campaign organization helped coordinate protests for public employees when their bargaining rights were at stake in Wisconsin and other states. And he has reshaped the National Labor Relations Board, which enforces labor laws and has moved to a more pro-union stance after years of siding with employers under President George W. Bush.
The dispute has escalated in recent months with a suit brought by the NLRB, an independent agency, accusing Boeing of opening its gleaming white-and-blue Dreamliner assembly plant here, rather than in Washington state, in retaliation for strikes at the company’s West Coast operations.
As Obama seeks support from both business and labor for his reelection campaign, the fight has put him in an awkward position. The White House on Monday deferred questions to statements made last week by press secretary Jay Carney, who said that because the NLRB is an independent agency, the administration would not get involved.
But McNerney has not held back, calling the NLRB’s action “a fundamental assault on the capitalist principles that have sustained America’s competitiveness.”
The Republican party has been just as vocal, accusing Obama of siding with labor and standing in the way of businesses that are creating jobs.
Last week Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, held a hearing here and argued that the labor board’s actions could be “disastrous.” Republican presidential candidates, including former Massachusetts governor Mitt Romney, former Minnesota governor Tim Pawlenty, and former House speaker Newt Gingrich, have also attacked the NLRB’s moves as they gear up to campaign in South Carolina, a critical state in the GOP primaries.
The International Association of Machinists and Aerospace Workers (IAMAW), which initiated the complaint, said it does not want the president to take sides.
“As far as the president becoming involved, we see him as leading by example and staying out of it. This is not a matter for politicians to be throwing their weight around on,” said Frank Larkin, a spokesman for the union. “This is an enforcement issue, and there is a process for handling enforcement issues.”
Barring a settlement, the legal process could stretch on for years, putting a damper on the excitement created here when the huge aircraft manufacturer opened its new plant earlier this month.
The $750 million assembly plant created more than 1,000 new jobs — in addition to 3,000 other Boeing jobs already here — launching what officials in this hard-pressed state called a new economic era in the Charleston area.
“By investing billions of dollars in the state and creating thousands of quality jobs, Boeing — with just one announcement — changed the face of South Carolina forever,” said a letter to the NLRB last week signed by South Carolina Gov. Nikki Haley and 15 other Republican governors. The state has been suffering from the long decline of the textile industry and is now saddled with a 10 percent jobless rate, one of the highest in the nation.
Speaking at a congressional field hearing in Charleston on Friday, Haley put responsibility for the NLRB action squarely in Obama’s lap.
“My job is to do whatever I can to create more [jobs]. I never thought that a president and his appointees at the National Labor Relations Board would be one of the biggest opponents,” Haley said. “If you tell a great American company like Boeing that they cannot create jobs in South Carolina all you are doing is incentivizing those companies to go overseas.”
The case was initiated last year when IAMAW, which represents Boeing workers in Washington, filed a complaint with the NLRB saying that Boeing’s decision to build the plant in South Carolina was to punish workers for a two-month strike that slowed production of the Dreamliner in 2008.
After an investigation, the NLRB’s acting general counsel, Lafe Solomon, agreed that Boeing’s move amounted to retaliation against the union, which is illegal.
A key piece of evidence in the case is a videotaped interview that Boeing executive vice president Jim Albaugh gave to the Seattle Times. In it, he explained the decision to put the assembly plant in South Carolina, saying: “The overriding factor was not the business climate, and it was not the wages we’re paying people today. It was that we can’t afford to have a work stoppage every three years.”
Albaugh continued: “We can’t afford to continue the rate of escalation of wages as we have in the past. You know, those are the overriding factors. And my bias was to stay here.”
Solomon decided that Albaugh’s statement was “coercive to employees” and that Boeing’s decision to add jobs in South Carolina was “motivated by a desire to retaliate for past strikes and chill future strike activity.”
Boeing does not deny that concern about strikes played a part in the decision. But the company says that other reasons include the lower labor costs, taxes, and government incentives in South Carolina. Tim Neale, a Boeing spokesman, pointed out that even as Boeing adds jobs in South Carolina, it is also expanding its unionized workforce in Washington state.
“This is clearly not an indication of anti-union bias,” he said.
The case is now before an administrative law judge in Seattle. From there, it could go before the NLRB and then to federal court. Boeing filed a motion to dismiss the case last week. The NLRB is expected to file an opposition to that motion Tuesday.