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.
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