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Originally published April 20, 2011 at 12:43 PM | Page modified April 21, 2011 at 6:03 PM

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Boeing to fight NLRB complaint on 787 South Carolina plant

Boeing was retaliating illegally against its largest union when it decided to put a second Dreamliner assembly line in a nonunion plant in South Carolina, the National Labor Relations Board charged, adding that Boeing should operate the second line at a union plant in Washington. Boeing says it won't stop its South Carolina plans.

Seattle Times business reporter

A growing footprint

Boeing's South Carolina 787 plant

Chronology: In July 2009, Boeing agreed to buy the 787 rear-fuselage assembly plant in Charleston, S.C., from troubled supplier Vought for about $1 billion. In October, after secret talks with the Machinists union didn't produce a 10-year no-strike agreement, Boeing selected Charleston for its second 787 plant, a planned 750,000-square-foot complex. In December 2009, it bought out supplier Alenia's half interest in the adjacent Global Aeronautica mid-fuselage assembly plant, giving it full control of the Charleston complex.

Boeing also plans a South Carolina facility to provide aircraft interiors for its Charleston-built 787s and says it intends to duplicate on the East Coast all its Puget Sound-area production capabilities related to the 787.

Investment expected by S. Carolina: $750 million.

Jobs expected by S.C.: Up to 3,800.

Planned output: 3 planes per month.

Start of operations: July.

Expected flight of first S.C.-built plane: In about a year.

Source: Seattle Times archives, The Associated Press

Boeing executives on Charleston decision

Some comments referred to the NLRB complaint

"Diversifying our labor pool and labor relationships has some benefits. ... Some of the modest inefficiencies associated with a move to Charleston are certainly more than overcome by strikes happening every three or four years in Puget Sound and the very negative financial impact on the company."

Boeing chairman and CEO Jim McNerney, in Oct. 21, 2009, conference call

"My preference is to do the work here in the future. But we'll do work here if we can make sure that we have the stability of the production lines and we can be competitive over the long haul. ... I'm very hopeful as we continue to have discussions with the union that we'll be able to come up with ways of being competitive here and we can come up with ways of ensuring that we're not going to have labor strikes. ... None of us are going to have jobs if we continue to have strikes that go on for three or four months every three years."

Boeing Commercial Airplanes CEO Jim Albaugh, in videotaped Seattle Times interview, March 1, 2010

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Boeing was retaliating illegally against its largest union when it decided in 2009 to put a second 787 Dreamliner assembly line in a nonunion plant in South Carolina, the National Labor Relations Board (NLRB) charged in a complaint filed Wednesday.

To remedy the alleged violation, the complaint says, Boeing should be ordered to operate the second line at a union plant in Washington.

Boeing said it would "vigorously contest" the case and proceed with plans to start assembling planes in Charleston, S.C., in July. "This doesn't change anything," spokesman Tim Neale said.

The South Carolina plant could be operating for years before the dispute is decided, a labor-law expert said.

"This process can take a long, long time to play out," said Ross Runkel, a professor emeritus of law at Willamette University and labor-law specialist.

The first step in that process — a hearing in Seattle before an administrative-law judge — is scheduled June 14.

NLRB Acting General Counsel Lafe Solomon filed the complaint after a yearlong investigation of an unfair-labor practices charge brought in March 2010 by Seattle-based International Association of Machinists (IAM) District 751, the largest union at Boeing.

The IAM said Boeing was retaliating for a 2008 strike, and seeking to discourage potential future strikes, when it chose to locate the second line in Charleston rather than in the Puget Sound area.

Solomon agreed, citing numerous public statements by Boeing executives that South Carolina was chosen in large part to avoid production disruptions from potential strikes.

Boeing's actions were "inherently destructive of the rights guaranteed employees" by federal labor law, the NLRB said.

Boeing plans to assemble seven planes a month at its unionized plant in Everett and three planes a month at its nonunion plant in Charleston.

To win the Boeing plant, South Carolina offered the company $170 million in upfront grants for startup costs, plus tax breaks that would be worth tens of millions of dollars more.

The Machinists union has struck Boeing's Puget Sound-area factories four times since 1989, most recently in 2008. Before Boeing announced where it would build the second 787 line, the company and the union held secret talks over a potential 10-year no-strike agreement.

The union hailed the NLRB's complaint as "a victory for all American workers."

The Charleston plant was an initiative by Boeing "to intimidate our members with the idea that the company would take away their work unless they made concessions at the bargaining table," District 751 President Tom Wroblewski said in a prepared statement.

Boeing continues to engage in the kind of activity the NLRB condemns, said union spokeswoman Connie Kelliher. She noted the recent move to have some Dreamliner parts for the South Carolina line made at a nonunion plant in North Carolina — rather than at unionized plants here — to keep the line running in case of strikes.

Michael Luttig, Boeing's executive vice president and general counsel, said in a prepared statement that the NLRB's complaint is "legally frivolous and represents a radical departure from both NLRB and Supreme Court precedent."

Two 1965 U.S. Supreme Court cases affirm employers' right to consider potential strikes in making business decisions, Boeing spokesman Neale said: "We're very optimistic that the law is on our side."

But the NLRB said the law and previous board decisions clearly bar employers from threatening workers with job losses for union-related activities.

NLRB spokeswoman Nancy Cleeland said the agency has held numerous settlement discussions with Boeing and the IAM since the union filed its complaint. She said she knows of no such talks under way now.

If there's no agreement, the administrative-law judge's ruling on the complaint can be appealed to the full, five-member NRLB.

The board always has been highly political, said Runkel, the law professor, and its handling of cases that involve companies moving work from union to nonunion sites has varied radically, depending on which party is in the majority.

Any board decision, in turn, can be appealed to federal courts.

Three of the five NLRB board seats now are held by Democrats. "I expect them to take a hard line on this," Runkel said.

Solomon, the general counsel filing the complaint, is an Obama administration appointee who operates independently of the board.

It's rare for the NLRB to seek to force an employer to move work back to a unionized plant from a nonunion one when it determines labor law has been violated, Runkel said.

He couldn't recollect a recent example and said he knows of no Supreme Court decision directly addressing that scenario.

The NLRB's case would be stronger, he added, if Boeing had reduced employment in Washington when it decided to open the plant in South Carolina.

Boeing said that, while it has hired more than 1,000 new workers in South Carolina, IAM employment in the Puget Sound area actually has increased by 2,000 since October 2009, when the Charleston plant was announced.

But Kelliher, the union spokeswoman, said most of those local jobs aren't related to the Dreamliner.

While the South Carolina plant gets up to speed, Boeing is setting up a second, temporary 787 assembly bay in Everett, what it calls a "surge" line to help ramp up production of the long-delayed plane.

U.S. Sen. Lindsey Graham, R-S.C., said the NLRB complaint, if successful, would give unions a virtual veto over business decisions.

"Left to their own devices, the NLRB would routinely punish right-to-work states that value and promote their pro-business climates."

Joe Trauger, a vice president with the National Association of Manufacturers, also slammed the complaint. If it is upheld, he wrote in a blog post, "no company will be safe from the NLRB stepping in to second-guess its business decisions on where to expand or whom to hire."

The Boeing case is the latest example of a labor board that has been more active in defending the rights of unions since gaining a Democratic majority last year, the first time in nearly a decade. In recent months, the board has cracked down on companies that fire employees during union organizing drives. It also made waves in January when it threatened to sue South Carolina and three other states over constitutional amendments that guarantee the right to a secret ballot in union elections.

Information from The Associated Press and Seattle Times archives is included in this report.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com

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