The NLRB Strikes Again!

For those of you who know what the NLRB is I hope you got the pun. For those that don’t, the NLRB is the National Labor Relations Board. The story of the day is that the NLRB is bringing charges against Boeing, the aircraft manufacturer, for opening a production facility for it’s new line of aircraft in a state that is not the state it had it’s old manufacturing plant. So what the hell does that mean right?

Boeing has a production plant in Washington State. Washington is not a Right-to-Work state, which means, among other things, that unions are mandatory. As such the unions in Washington are fairly strong, and in the past they have executed successful strikes in order to get favorable dealings from Boeing. These strikes come about every three years or so since the plant opened. Strikes, if you don’t know, can be extraordinarily devastating to a manufacturer trying to meet a contract. I work at a power plant, and when we’re down for a day we lose a million dollars in electricity supply. Most manufacturing facilities easily top that number if they are down for a single day, due in large part to the disruption of the whole manufacturing chain.

Boeing decided to build it’s new factory in South Carolina, a Right-to-Work State. One of the deciding factors stated by the Boeing executives in their decision to build a factory in a state that is not Washington was the lack of likelihood of striking workers closing their plant down and costing them millions of dollars. Seems like a solid business plan to me, and one adopted by damn near every company that has ever outsourced work.

Federal Law states that a company cannot discriminate against unionized workers for unionizing or for striking. In this instance the NLRB has decided that since striking was a deciding factor in opening their new plant elsewhere, that Boeing was discriminating against its Washington workers for striking. Something to note here: Boeing is not closing their Washington factory and has in-fact added an additional 2000 jobs to their operations there in the last year and half. Not only that, but the NLRB’s solution to the “problem”: Close down the factory in South Carolina, a factory already in operation with hundreds of employees, and open a new one in Washington.

As expected many workers in South Carolina feel discriminated against by the NLRB because they are in a right-to-work state where unions aren’t mandatory. Joining them are 16 state’s attorney generals who are now attacking the NLRB for what they see as a potential to drive business out of right-to-work states. And they’re right to do so. If the NLRB was to win in this case it would effectively trap U.S. companies with factories in non right-to-work states from being able to open factories outside those states for fear they would be pursued by the NLRB.

Let me spell out the rest of the consequences from there: No new U.S. companies will form in non right-to-work states as long as they can help it, because they know that if they get big enough they won’t be able to expand. No new manufacturing will open in non right-to-work states, for the same reason. Most U.S. companies that want to expand beyond the borders of their non right-to-work state’s will fold up shop in the U.S. and open their companies up again overseas. Heck you might even see a drastic withdrawal of service industry companies from non right-to-work states because they will fear attacks from the NLRB on their employees in right-to-work states. Ultimate you have a shutdown of business growth in states that desperately need it and the advance of more U.S. companies “going global”. Even if the NLRB wins in this case, it loses the long game because no one will hire unionized workers in the future.