Boeing's decision a setback for unions
Friday, October 30, 2009
Boeing's decision to open a second assembly line for its 787 jetliner in South Carolina is another blow for organized labor, experts say, signaling that major manufacturers are increasingly willing to look for non-union workforces during a time of economic stress.
Chicago-based Boeing said Wednesday that it had picked North Charleston over Everett, Wash., the home of Boeing's commercial aircraft division, because it best fit its production plans for the 787 Dreamliner. Full production of the jet has been much anticipated because it has more than 800 orders and is designed to carry up to 250 passengers. But the Dreamliner, which is assembled from parts made by suppliers around the globe, is two years behind schedule. It has been plagued by production problems and delays, including strikes by union machinists in Everett and other sites in Washington state that forced the company to take costly write-downs as it closed commercial aircraft operations last year for eight weeks.
Boeing's move comes at an especially tough time for organized labor in the United States. The car industry is struggling to survive and is wringing historic concessions from its unions. Steel and other industries have restructured their deals with unions, as more manufacturing heads overseas or to "right-to-work" states in the South.
"This is the escape from collective bargaining," said Gary Chaison, a labor expert at Clark University. "Boeing is creating its own trend in heavy manufacturing, and more and more manufacturing is going to move south."
Boeing and officials from the International Association of Machinists and Aerospace Workers had been negotiating recently to put the second 787 assembly line in Washington state, but those talks broke down, according to union and state officials.
Tom Wroblewski, president of the union there, issued a sharply critical statement Wednesday, saying Boeing had "betrayed our loyalty." He went on to say that Boeing was "only using our talks as a smoke screen, and as a bargaining chip to extort a bigger tax handout from South Carolina."
Yvonne Leach, a Boeing spokeswoman, said that the union offered its "best and final proposal" last week and that it didn't have the "production stability" the company wanted. There were also issues with cost-of-living increases, pensions and bonuses, guarantees on no strikes, and wages, according to those involved in and close to the talks.
Boeing said it expects to start construction on its assembly plant in South Carolina next month, with the first planes expected to be finished by the first quarter of 2012. It expects to produce 10 of the 787s per month by 2013 -- with seven being built in Everett and three in North Charleston.
Leach said putting the second assembly line in South Carolina was the "most efficient way to meet the needs of our customers. It gives us the manufacturing diversity we need."
The company already operates a factory in North Charleston, and it owns a stake in a plant that makes parts and sections of the 787. Boeing considered opening a second assembly line for the jet in California, Kansas, North Carolina and Texas. South Carolina officials offered Boeing $170 million in tax incentives in exchange for the promise of creating up to 3,800 jobs.
Harley Shaiken, a labor expert at the University of California at Berkeley, said Boeing is "sending a message to the union that this is our other alternative" by moving the second assembly line to South Carolina.
He said that Boeing has had disagreements with the machinists union and that they "marred the fact that they have a skilled and capable workforce" in Everett. Experts say it could weaken union support as Boeing is expected to decide in the coming years where to build the next generation of its 777 and 737 aircraft.
That could come as a blow for the Puget Sound area, which depends heavily on the aerospace industry.
"Puget Sound is going to be in direct competition with South Carolina," said Jefferson Cowie, a labor expert at Cornell University. "You have this competitive geography of labor relations that Boeing will be able to whip saw one location off of another. It is very difficult to rise above that for the union. Boeing will have a non-union workforce in a right-to-work state with a favorable business climate. It is emblematic of contemporary labor relations.
"This goes all the way back to garment manufacturers moving out of New York to electronics and textiles," he said. "You've seen it in auto, and now you're seeing it with the biggest aircraft. This is the kind of thing that is bad news for organized labor."