Boeing, the NLRB and government’s golden handcuffs

Boeing was the recipient of an outrageous ruling last week by the National Labor Relations Board, which said the aerospace giant couldn’t retaliate against labor-union strikes by moving some manufacturing operations out of union-friendly Washington state to right-to-work South Carolina. The ruling was outrageous on several levels: a federal government entity telling a private company where it can and can’t locate certain operations; the basis for that ruling being the company’s desire to avoid strikes that have cost it millions of dollars in recent years; the federal entity very obviously siding with one state that happens to be a reliable vote for the political party of the current occupant of the White House over another that happens to be a reliable vote for the other major political party.

But…

As the Washington Examiner’s Timothy Carney reminds us today, Boeing is in no position to complain about government interference in its operations, given its reliance on government favor:

Boeing and Obama, both based in Chicago, have a real political friendship. In 2008, Obama was by far the biggest recipient of campaign contributions from Boeing employees and executives, hauling in $197,000 — five times as much as John McCain, and more than the top eight Republicans combined.

Boeing’s lobbyists include some of Obama’s closest allies. The Podesta Group, co-founded by Obama’s transition director and John Podesta, represents the jet maker, with Democratic fundraiser Tony Podesta and former Obama campaign aide and administration official Oscar Ramirez as two of the lobbyists on the account. Linda Daschle, wife of Obama confidant Tom Daschle, is a longtime Boeing lobbyist.

When Obama began his export initiative, he named Boeing CEO Jim McNerney chairman of the President’s Export Council.

And Boeing has pocketed even more taxpayer loot under Obama than it did under George W. Bush. Obama’s export initiative has included ramping up subsidies from Ex-Im, and Boeing has reaped the benefits. In fiscal 2009, Ex-Im guaranteed $8.4 billion of loans to benefit Boeing, an astounding 90 percent of all of Ex-Im’s loan guarantees. This past fiscal year, according to a recent annual report, Boeing won $6.4 billion in Ex-Im loan guarantees, 63 percent of the total.

In fiscal 2009, 2010 and 2011 so far, Boeing has received more than $45 million in government contracts. Documents made public by Wikileaks showed how much work U.S. diplomats do to persuade foreign leaders to buy Boeing jets for their state-owned airlines.

So now when the Obama administration kneecaps Boeing, bending labor law in order to benefit a labor union that gives more than 95 percent of its money to Democrats, Boeing is vulnerable. Can Boeing believably use free-market arguments to defend its right to build planes in whichever factory it wants?

Carney doesn’t even mention by name the $35 billion contract the Air Force awarded Boeing earlier this year for mid-air refueling tankers. Boeing beat out EADS, the European aerospace company and corporate parent of Airbus, for a contract that was hung up by politics and scandal for many years — forcing the Air Force to keep some Eisenhower-era tankers in service.

Contracts are one thing — if you don’t want government to actually make airplanes, you have to recognize it’s going to buy them from someone — but subsidies and loan guarantees are quite another. And Carney does refer indirectly to the subsidies that the federal government, and various state and local governments, have awarded Boeing over the years, and which Washington has spent much time and money defending against European challenges at the World Trade Organization. My position has long been that Europe’s subsidies to Airbus and EADS were worse, but Boeing’s were bad as well. Neither of the companies, which comprise a globally dominant duopoly, should require subsidies to survive.

The NLRB ruling is outrageous simply as an over-reaching precedent. But other companies that spend much of their time lobbying the government for business — GE, pharmaceutical makers and so on — should take note of the golden handcuffs that keep Boeing from raising its hands too high in protest.

– By Kyle Wingfield

Find me on Facebook or follow me on Twitter

69 comments Add your comment

carlosgvv

April 25th, 2011
11:40 am

A good understanding of what the Military-Industrial-Complex is will help you to make sense out of this.

Kyle Wingfield

April 25th, 2011
11:52 am

True, carlosgvv, but defense contractors are hardly the only companies that have such a symbiotic relationship with the govt.

Hillbilly Deluxe

April 25th, 2011
12:02 pm

Boeing beat out EADS, the European aerospace company

That, in itself, is not a bad thing. In my opinion, all military contracts should be to U.S. companies and the manufacturing done in the U.S. In the event of war, you might have no one to depend on but yourself. It’s best to control your own destiny, if you can.

Bart Abel

April 25th, 2011
12:09 pm

The writer of the Washington Examiner article seems to want to have it both ways. Obama is horrible for “kneecapping” one of his large campaign contributors. Obama is horrible for helping his union campaign contributors.

Then Kyle Wingfield implies that Obama is horrible for preferring an American manufacturer over European manufacturers. If Obama had placed more business with European companies, then the same crowd would be criticizing Obama for that too.

The bottom line is that he’s damned if he does and he’s damned if he doesn’t.

carlosgvv

April 25th, 2011
12:10 pm

Kyle, that is correct and sometimes I wonder if that will be our eventual downfall.

Pablo

April 25th, 2011
12:51 pm

The lesson to be learned by Boeing is that the entity that gives can take away, and sometimes take a lot more than you would expect. I can only think that Boeing will think long and hard before trusting politicians again…

Dunwoodian

April 25th, 2011
12:59 pm

So it is alright for Boeing and other military contractors to make money from the government, for, of, and by the people. But when these for, of, and by people want a little too, the government needs to back off?

I’d rather pay Boeing extra for the tankers if I knew the money would trickle down to the union employees, unlike AIG’s bailout and the subsequent trickle up to Goldman’s bonuses.

JF McNamara

April 25th, 2011
1:11 pm

I think the lesson is that maybe Boeing shouldn’t whine. They’ve got a pretty sweet deal. They have gotten massive support from the federal government and even more from the state of Washington.

Should a company be told they can move employees to avoid unions? Probably not. Should a company get special representation, sweetheart deals, and favorable tax breaks? Probably not.

Maybe that’s a stalemate.

Logical Dude

April 25th, 2011
1:27 pm

Quoted: Linda Daschle, wife of Obama confidant Tom Daschle, is a longtime Boeing lobbyist.

So, tossing this into the mix really blares at you:
The GOVERNMENT IS LITERALLY IN BED WITH THE LOBBYISTS!!!

But then, most of us already knew that, but it’s usually not this literally displayed.

Fix-It

April 25th, 2011
1:28 pm

Take it to court, state and federal law should trump the NLRB stupidity..

[...] Labor relations Board (NLRB) has decided to stick its nose into Boeing’s business and investigate whether the company should be permitted to move the manufacturing of one of its 737 Dreamliner lines to the [...]

joe

April 25th, 2011
1:31 pm

“The NLRB ruling is outrageous simply as an over-reaching” president. Works both way, don’t it? Me thinks Boeing should rethink who it supports/donates to in the 2012 election.

markie mark

April 25th, 2011
2:07 pm

hmmm…this may be that textbook example of “what goes around comes around” that is always referred to…

Linda

April 25th, 2011
2:07 pm

And we wonder why our jobs are leaving the country, why unemployment is so high, why companies are not hiring, why companies are moving from blue states to red states, why unions are fighting for their lives in numerous states & why O’s approval ratings are so low…

bill

April 25th, 2011
2:07 pm

Don’t believe the unions or government should have the ability to tell private enterprise anything about where they can locate. Don’t think any private enterprise is entitled to any bailouts…….PERIOD!!! (believe in “right to work”, however not on topic)

Scooter (The Orginal)

April 25th, 2011
2:14 pm

Nothing was changed in Chicago, but D.C. is looking more and more like it as the days go by.

Kyle Wingfield

April 25th, 2011
2:16 pm

“Then Kyle Wingfield implies that Obama is horrible for preferring an American manufacturer over European manufacturers.”

Where do you get “Obama is horrible” from what I wrote? I was listing another example of Boeing’s dealings with the government.

Don't Tread

April 25th, 2011
2:37 pm

GE better look out…they will be next on the hit list.

Wonder what would happen if GM or Chrysler decided to open a new facility in the South now?

Bart Abel

April 25th, 2011
2:43 pm

Kyle,

Sorry if I misunderstood. I thought the point of listing Boeing’s dealings with the government was to illustrate the theory that Obama makes decisions specifically to help a campaign contributor. At the same time, you’re complaining about the administration kneecapping the very same campaign contributor. I guess I’m not actually sure what you’re trying to say. It just seems like Obama’s critics don’t mind contradicting themselves as long as they can automatically take the opposite position that he takes.

By the way, the Obama administration didn’t have anything to do with this decision against Boeing. The NLRB is independent of the administration and part of its job is to enforce violations of the National Labor Relations Act. The NLRB found that Boeing broke the law, and they’re enforcing it. It’s the critics of this decision who are inserting politics into. Not the Obama administration.

Linda

April 25th, 2011
2:43 pm

According to this article, “Over the past 25 yrs., job growth in right-to-work states has been over twice as high as in unionized states, 51% compared to 21%. Between ‘00 & ‘10, employment has grown by 2% in RTW states & declined by 4% in unionized states…On Wed., the (NLRB) issued a propsed rule to require employers to display posters to notify workers of their rights to join a union…is yet another message to employers that the adm. regards them with hostility…The board wants to require management to read aloud to the work force the workers’ rights to join a union. It wants unions to have access to firms’ bulletin boards & newsletters…give unions lists of workers’ names & home addresses, facilitating intimidation & identity theft…”

http://washingtonexaminer.com/opinion/columnists/2010/12/diana-furchtgott-roth-americans-dodge-unions-feds-insist-them-anyway

(I was to write less, but lefties don’t read sites.)

Kyle Wingfield

April 25th, 2011
2:47 pm

Bart, I think you’re looking too hard for an insult to President Obama. The point of the post is in the final paragraph.

Bart Abel

April 25th, 2011
2:55 pm

Wait. I have to correct Kyle and myself. The NLRB hasn’t made a ruling. There are only allegations of violations. The complaint has yet to be heard by a judge. The judge’s decision can appealed to the Board, and the Board’s decision can be appealed in federal court.

Boeing complaint fact sheet: http://www.nlrb.gov/node/443

Linda

April 25th, 2011
2:55 pm

Bart@2::43, Not only did Obama appoint union boss lawyer Craig Becker to the 5-member NLRB, he was appointed during a recess after he was rejected by the Senate as being too radical. He & Obama both have close ties to ACORN.

http://online.wsj.com/article/SB10001424052748704107204574471393545371128.html

john

April 25th, 2011
3:00 pm

great article

Bart Abel

April 25th, 2011
3:01 pm

Honestly, all I’m doing is reading the words on the page. One doesn’t have to look very hard. I mean, what’s the point of all this?

“Boeing and Obama, both based in Chicago, have a real political friendship. In 2008, Obama was by far the biggest recipient of campaign contributions from Boeing employees and executives, hauling in $197,000 — five times as much as John McCain, and more than the top eight Republicans combined.

Boeing’s lobbyists include some of Obama’s closest allies. The Podesta Group, co-founded by Obama’s transition director and John Podesta, represents the jet maker, with Democratic fundraiser Tony Podesta and former Obama campaign aide and administration official Oscar Ramirez as two of the lobbyists on the account. Linda Daschle, wife of Obama confidant Tom Daschle, is a longtime Boeing lobbyist.

When Obama began his export initiative, he named Boeing CEO Jim McNerney chairman of the President’s Export Council.

And Boeing has pocketed even more taxpayer loot under Obama than it did under George W. Bush.”

“Carney doesn’t even mention by name the $35 billion contract the Air Force awarded Boeing earlier this year for mid-air refueling tankers.”

Kyle Wingfield

April 25th, 2011
3:05 pm

Bart, if the final paragraph is too long, then just read the final sentence.

Kyle Wingfield

April 25th, 2011
3:07 pm

All the rest is to explain how the handcuffs got there.

Bart Abel

April 25th, 2011
3:11 pm

Linda,

1. Becker couldn’t have been rejected by the Senate because the Republicans successfully blocked an up-or-down vote on his confirmation with the filibuster. If they had allowed a vote, Becker had the votes for confirmation.

2. Becker is one of five appointees. Do you know who appointed the four other members of the Board?

3. Once appointed, Board members do not answer to the President. Their decisions are independent.

Linda

April 25th, 2011
3:18 pm

If I was in an abusive relationship & had I & my family been “struck” 4 times in 10 yrs. (5 times total) & it cost me $1.8 billion & I could not convince my abuser from promising me in writing that he would not strike me again for a long time (a long-term, no-strike contract), would I be an idiot to stay in the relationship? Would it matter that the last time I was “struck,” I was in the hospital 2 months?

A Conservative Voice

April 25th, 2011
3:19 pm

@Bart Abel

April 25th, 2011
2:43 pm
Kyle,

By the way, the Obama administration didn’t have anything to do with this decision against Boeing. The NLRB is independent of the administration and part of its job is to enforce violations of the National Labor Relations Act. The NLRB found that Boeing broke the law, and they’re enforcing it.

BS

HDB

April 25th, 2011
3:19 pm

The key to the ruling can be found in this statement by Kyle: “the aerospace giant couldn’t RETALIATE against labor-union strikes…”. All this is to do is to foster EARNEST negotiations between management and labor in labor disbutes….rather than labor getting screwed by managerial largese.

Freedom Lover

April 25th, 2011
3:21 pm

As the Great Ron Paul once said “When one gets in bed with government, one must expect the diseases it spreads.” Nice to see the death merchants paying the price for their complicity in the world-destroying military-industrial-complex. Couldn’t have happened to a nicer bunch of folks. What a shame that Halliburton doesn’t suffer similar or even worse fates.

Will

April 25th, 2011
3:27 pm

Kyle:

The annual Easter Egg hunt was held on the White House Lawn today.

As a republican newspaper writer, I thought I would let you know so that you can begin finding some fault with the Obama Administration’s handling of this matter.

Linda

April 25th, 2011
3:31 pm

Bart@3:11, 1. Read this:

http://netrightdaily.com/2010/09/obama-recess-appointees-even-too-radical-to-be-confirmed-by-democrat-controlled-senate/

2. No. Do you?

3. How old are you? Obama is a smart man. He would never appoint anyone to any department (or czar chair) that did not agree with his policies 100% & carry them out as he, Obama, wants them carried out to the nth degree. Period.

booger

April 25th, 2011
3:37 pm

Left out of this conversation so far is South Carolina. They have spent millions to get this business, only to have a low level admin paper pusher spoil the whole thing. This would have brought 1700 needed jobs to a depressed economy. I assume when people bemoan the fact that Boeing is attacking the middle class, it only counts if the middle class organized.

jt

April 25th, 2011
3:40 pm

Mr. Wingfield gets it.

Kudos to you sir………….instead of the perpetual wardrum beating …………….beating for our “defense”.

I have no sympathy for government protected unions……………likewise……….government sponsored merchants of death.Boeing also has cashed in on “homeland security”, with its multi-million dollar contracts for child-support, police equipment, and drone surveliance….here in the states.

EFFFF the coorperation of Boeing and any other enemy of the American people….and the merchants of death and misery.

Ya reap what you sow ….and you will rightfully get it.(the Nuremberg Defense doesn’t work).

joe

April 25th, 2011
3:40 pm

Did ya’ll read Morris Brown is getting bailed out of paying back $9.5 Million to the Dept of Education? Obama’s bailouts keep on going…

Linda

April 25th, 2011
3:44 pm

Will@3:27, I saw that!
It took 2 weeks & cost the US taxpayers $4 billion for union members to hide the eggs, which turned out to be extremely difficult to find, since they were all green eggs in all green grass. They only hid 6 dozen eggs, since eggs are now so expensive, since we are burning our food & chicken feed in our gas tanks, because the globe is warming due to air.

Linda

April 25th, 2011
3:53 pm

booger@3:37, The WA plant builds 7 planes per mt. Boeing wanted to open a 2nd assembly line to build 3 planes per mt. & chose SC. The NRLB does not seek to close the SC plant but to force Boeing to have a third plant in WA, as I understand it. Should the unions win, it will be up to Boeing what to do with their SC plant. It will ultimately be up to Boeing what country they will do business in.

Bart Abel

April 25th, 2011
3:53 pm

Linda,

You’ve been fooled by a headline. If the minority would allow an up-or-down vote, each one of those nominees would be confirmed.

That fact that NetRightDaily thinks that these persons are radical is not surprising or persuasive. They believe that Bob Dole, Lindsay Graham, and Dick Lugar are radical.

Ayn Rant

April 25th, 2011
3:55 pm

Boeing and EADS are the poster children for state-subsidized capitalism. The huge aircraft makers are unrelenting rivals in the airliner market. Boeing had an early start with the KC-135 (Eisenhower-era) tanker; the military contract paid much of the development costs of the highly-successful 707 airliner.

EADS started later, but has now filled every niche in the airliner market with technologically advanced products. Boeing has been forced to the edge of a financial cliff with the 787 (Dreamliner), a plastic airplane with risky technology and a cumbersome international manufacturing scheme.

But Boeing has a clever scheme for milking a big new subsidy from the US military. The USAF needs to replacement the KC-135 tankers fleet with modern aircraft. The cost is estimated at $35 billion for the new aircraft and $200 billion for support over a 30 year life cycle.

Unfortunately, Boeing’s current product line doesn’t include an airframe appropriate for modification as a tanker . However, Boeing would find it profitable and convenient to win the USAF tanker contract with a modified 706 airliner. That aircraft is a technologically obsolete airframe; it is being phased out of service by the airlines, and Boeing will have to shut down the 706 assembly line unless it can win the air force contract.

In 2003, Boeing was awarded a sole source contract for the new tanker program. Senator John McCain exposed corruption behind the non-competitive award, and forced the air force to open the bidding to all suppliers. The winner of the competition was a consortium of companies that proposed an aircraft based on the EADS A330 airliner. The A330 airframe is technologically superior to the 706 (it’s the wing!), and offers the additional flexibility of quick conversion to a military transport. The A330 tanker had already been ordered by the air forces of our major European allies, as well as Japan and Australia. That tanker is already in service, and is available for hands-on demonstration.

Boeing pulled political strings to get the contract award re-opened with more restrictive criteria that put the larger A330 aircraft at a disadvantage with the 706. Boeing was awarded the contract.

The current intention is to proceed with squandering $35 billion for tanker aircraft with an obsolete airframe. A sensible alternative is to buy a few off-the-shelf A330 tankers for the USAF, and count on our allies to provide tanker support with their A330Ts in any future military forays. (It’s the type of support they are most willing to provide.)

that's goofy

April 25th, 2011
4:23 pm

what if Boeing is in violation of Federal law?

“Boeing’s decision to build a 787 assembly line in South Carolina sent a message that Boeing workers would suffer financial harm for exercising their collective bargaining rights,” said Rich Michalski, the union’s vice president. “Federal law is clear: It’s illegal to threaten or penalize workers who engage in concerted activity.”

The union claims that Boeing rejected new labor agreements in accepting almost $900 million in incentives and tax relief from South Carolina to build the Dreamliner in North Charleston.

Read more: http://www.thestate.com/2011/04/21/1787012/feds-try-to-block-boeing-from.html#ixzz1KZH64scR

However, if the existing contract had expired – Boeing should be free to do what they want. Proving this is a retaliatory move will be difficult.

[...] webmaster@technorati.com wrote an interesting post today onHere’s a quick excerpt [...]

Linda

April 25th, 2011
4:34 pm

Bart@3:53, Becker was not confirmed because the Democrats did not back him. The Senate needed 60 votes (2/3 majority) to confirm Becker. They had counted on Scott Brown for the 60th vote & he balked. As it turned out, there were only 52 Democrats who voted yea, so Becker missed by a long shot. 2 Democrats voted against him. In an unusual fait accompli, 15 Senators refused to vote at all, including 4 Democrats & the lone Socialist.

http://senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00022

Jefferson

April 25th, 2011
4:37 pm

Kyle, I hope these folks here relalize you write much fiction and it not true what you want them to belive.

Linda

April 25th, 2011
4:51 pm

Bart@3:35, Taking about radical, are you aware that the fed. govt. is borrowing 40 cents of every dollar it is spending, that, simplified, we need to cut 40% of the fed. govt. just to break even, that we need to cut 50% to even begin to pay down the natl. debt.? Can you imagine the fed. govt. being cut in half?
If someone in DC or a presidential candidate promised to cut the deficit in half within 4 years, would you think he or she is radical?

Junior Samples

April 25th, 2011
4:56 pm

Regardless of the politics, I’m glad a lobbyist wasn’t able to buy their way into a favorable deal. Sure, lobbying is protected by the constitution. But that shouldn’t mean the highest bidder wins.

Bart Abel

April 25th, 2011
5:13 pm

Linda,

You don’t need 60 votes to confirm a presidential nominee. You need 51 votes.

You need 60 votes to break a filibuster that’s blocking an up-or-down vote. A vote to confirm these nominees was never held. A vote to end the filibuster against them was held.

In Becker’s case, 53 voted to break the filibuster and 33 voted to maintain the filibuster. Only in the dysfunctional world of the U.S. Senate does 33 votes beat 52 votes.

As I said. If the Republicans would allow an up-or-down vote on these nominees, there are enough votes to confirm them.

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

April 25th, 2011
5:22 pm

The Gulf is fine but the bloodsuckers thrive-

NEW ORLEANS — Scientists say it is taking far too long to dole out millions of dollars in BP funds for badly needed Gulf oil spill research, and it could be too late to assess the crude’s impact on pelicans, shrimp and other species by the time studies begin.

Rita Colwell, a University of Maryland scientist who chairs the board overseeing the money, said the protocol for distributing the remaining $450 million would be announced today at the National Press Club Washington. -Urinal

I thought this money was supposed to help the people of the Gulf region, not the leaches of Washington DC?

Is there any money that these parasites won’t steal?

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

April 25th, 2011
5:25 pm

And of course the AJC shows no shame, makes no untoward connections, they just gleefully help the thieves rip off all the moolah.

Must be some dummycrat kkkampaign kontributions to be had.