South Carolina Boeing Workers Reject Machinists Union Representation

The International Association of Machinists and Aerospace Workers (IAM) has never lacked for persistence.  But after more than seven years of trying to organize workers at the Boeing assembly plant in North Charleston, S.C., it has little choice right now but to lay low.  On February 15, three-fourths of the employees at the facility, which builds the Boeing Dreamliner 787 commercial jet, voted against union representation.  The vote also represents a rebuke to the National Labor Relations Board, which back in December 2011 dropped an Unfair Labor Practices complaint against the company in the wake of an IAM victory in contract talks.  Significantly, the vote came one day before a visit by President Donald Trump, who has made domestic manufacturing a top priority issue.

Union Corruption Update covered this test of wills more than once in 2011, explaining the implications of the South Carolina situation for labor-management relations throughout the country.  Boeing, though based in Chicago, by far has its greatest presence in the Seattle-Tacoma area.  Close to a decade ago, the company, now with about 35,000 employees at two dozen U.S. plants, announced its latest addition to its commercial fleet:  the Dreamliner 787, a $185 million per unit luxury jumbo passenger jet.  The International Association of Machinists tried to convince the company to unionize all aspects of its production.  But Boeing management, having capitulated to the IAM over the past couple decades, most recently in 2008 in the face of a strike at Everett, Wash. (north of Seattle) plant.  Management understandably didn’t want to repeat that experience.

Based on its market analysis, Boeing announced in October 2009 that it would open a then-vacant 1.2 million-square-foot assembly plant in North Charleston, S.C. to complement the Dreamliner 787 union shop in Everett.  The plant previously had been occupied by Vought Aircraft.  The State of South Carolina pulled out all the stops to entice Boeing into a long-term commitment, adding nearly $900 million in tax and other incentives to the $750 million purchase.  Orders for the jet, beginning with its 7E7 predecessor, had been coming in since 2004.  The choice of location was heavily driven by South Carolina’s Right to Work law; workers cannot be compelled to join a union or pay partial dues (“agency fees”) in lieu of joining.  At the same time, as Boeing officials emphasized that no union jobs back in Washington State would be lost.  This looked like a win-win scenario.

The International Association of Machinists didn’t think so.  Noting that wages for Boeing workers in unionized Washington state were around a third higher than in South Carolina (though ignoring regional differences), the union took action.  On March 26, 2010, the Machinists filed a complaint with the National Labor Relations Board claiming that Boeing senior executives, by situating its secondary production line in anti-union South Carolina, had retaliated illegally against a worker’s protected right to strike.  The NLRB agreed to review the case.  A year later, on April 20, 2011, the board filed a 10-page Unfair Labor Practices suit against Boeing.  “A worker’s right to strike is a fundamental right guaranteed by the National Labor Relations Act,” wrote NLRB Acting General Counsel Lafe Solomon in an accompanying statement.  “We also recognize the rights of employers to make business decisions based on their economic interests, but they must do so within the law.”  This board’s action represented a certain creative liberty.  Solomon effectively was arguing that an enterprise has no right to expand operations into to a Right to Work state if it is motivated in any way by a desire to avoid strikes.  The NLRB scheduled a hearing in June before an Administrative Law Judge in Seattle.

The Machinists had its own case going.  Three months earlier, on January 20, 2011, the union had filed a federal lawsuit against South Carolina Republican Governor Nikki Haley, barely in office for a week, accusing her of depriving state residents of free speech, free association and due process rights guaranteed by the Constitution and the National Labor Relations Act.  “Governor Haley placed her hand on a bible and swore to defend the Constitution of the United States,” moralized IAM Southern Territory Vice President Bob Martinez.  “But her stated intention is to actively oppose workers in South Carolina who wish to exercise their legal right to join a union.”  The union also named Haley’s nominee for head of the Department of Labor, Licensing and Regulation, Catherine Templeton (later confirmed), as a co-defendant.  Haley, who left her post this past January to become President Trump’s UN ambassador, fired back in an editorial in the Wall Street Journal that April:  “We don’t need unions playing middleman between our companies and our employees.  We don’t want them forcefully inserted into our promising business climate.”

The union suit against Haley and Templeton, to little surprise, went nowhere.  The NLRB suit had a different ending.  On December 9, 2011, the board dropped its complaint against Boeing just two days after the company and the Machinists ratified a four-year contract extension.  Under the agreement, the union would drop its charges against the company; in turn, the company would build its narrow-body 737 Max commercial jet at its union plant in Renton, Wash., making every effort to keep its aircraft manufacturing in the Puget Sound area.  Superficially a victory for Boeing and the Right to Work, the settlement amounted to a gift to the International Association of Machinists.  The NLRB, in effect, was ordering Boeing not to open its South Carolina Dreamliner plant.  Sen. Jim DeMint, R-S.C., who would resign his Senate seat a year later to become president of The Heritage Foundation, expressed his disapproval this way:  “The NLRB’s dismissal of charges against Boeing only after union approval of their new contract only confirms the charges were a politically motivated negotiation tactic, not a serious complaint based on merit.”

Boeing, in apparent defiance of the NLRB, opened its North Charleston plant in June 2011.  The Machinists responded with an organizing drive.  It proved to be a long and unproductive one.  Echoing her Wall Street Journal piece, Gov. Haley tweeted in March 2015:  “We don’t need their bully middleman tactics between our associates and their employer.”  Not long after, the IAM called off a scheduled vote in the face of what union officials described as a high-pressure misinformation campaign by Boeing management and South Carolina politicians.  Though the drive would resume, in the end it fell way short.  A little over three weeks ago, on February 15, about 2,800 employees at the facility – around 90 percent of all workers there – voted against union representation by 74 percent to 26 percent.  Joan Robinson-Berry, plant general manager, was elated.  “We will continue to move forward as one team,” she said.  “We have a bright future ahead of us and we’re eager to focus on the accomplishments of this great team and to developing new opportunities.”

It was a bitter pill to swallow for the union, eager to hold an election before President Trump could fill two vacant NLRB seats.  Lead organizer Mike Evans, though not happy, accepted the outcome.  He appealed to the company to “pay attention to your issues and make Boeing a better place, not just for a few, but for everybody.”  Trump himself paid a visit to the plant on February 16, the day after the vote, to attend the rollout of Boeing’s 787-10 Dreamliner, a somewhat larger successor to the 787-8 and 787-9 models.  “That is one beautiful airplane,” proclaimed Trump to the well-attended throng.  “What an amazing piece of art.  What an amazing piece of work.”  It also may turn out to be a profitable one.  By the time of the vote, Boeing already had received a combined nearly 150 orders from nine customers.  As for the union plant in Everett, it’s added 2,000 positions since 2009, the year of the South Carolina announcement.  So the Machinists have come out of all this in good shape.

The Boeing battle in South Carolina is over, at least for now.  But the debate over how to protect and expand America’s industrial base continues to roil.  Donald Trump was elected president last November largely on the strength of support from union families in northern swing states such as Michigan, Ohio and Pennsylvania, each having experienced substantial industrial job losses since 2000.  Exit polls, in fact, showed that Trump did better among union households than any Republican presidential candidate since Ronald Reagan in 1984.  Unions in all industries frame their appeal in terms of higher wages and job security.  But these outcomes depend on profitability.  In the auto industry, decades of aggressive wage and benefit contract victories scored by the United Auto Workers eventually drove domestic manufacturers to near-extinction.  Boeing workers in South Carolina now have registered their displeasure over the possibility of a similar situation.