After a long-running dispute between Boeing and the International Association of Machinists and Aerospace Workers, there's a lot of happy talk coming out of Washington state today. That's because the two sides reached a tentative deal, pending the approval of union members next week. If approved, the Machinists say they will drop their grievances before the National Labor Relations Board, which had led the board to take the unprecedented action of suing Boeing to prevent it from opening a non-union factory in South Carolina. Beneath the happy talk, however, we're left with an ominous reality -- the appearance of a union using the NLRB as its personal weapon to shake down a private company.
It's worth remembering what happened in this case. The union, in the midst of a labor dispute, complained to the NLRB that Boeing was building a non-union factory in the right to work state of South Carolina to service a backlog of orders on its 787 Dreamliner airplanes. And the NLRB's general counsel, Lafe Solomon, responded by suing Boeing and demanding that they move work from the newly constructed $750 million South Carolina facility to the unionized Washington state. The suit was completely frivolous and unlikely to ultimately prevail. However, businesses, especially those that are publicly traded, hate uncertainty. So they decided to reach a settlement with the union. To be clear, nothing is a done deal, and there's no guarantee that NLRB will now drop its suit, but Solomon did call the agreement a "a very significant and hopeful development."
Though Boeing did not agree to shut down its South Carolina facility, the company did agree to build its 737 MAX passenger jets in unionized Washington state, though they had been considering building them elsewhere. In addition, the Machinists report the tentative deal includes:
- Annual wage increases of 2 percent, plus cost-of-living adjustments;
- An incentive program intended to pay bonuses between 2 and 4 percent;
- A ratification bonus of $5,000 for each member;
- Increases to the formula for calculating pensions in each year of the pact; and
- Guarantees that new hires would continue to receive traditional pensions.
In other words, the Machinists were able to extract a lot of concessions from Boeing that they otherwise might not have gotten, because the Obama administration's NLRB filed a frivolous lawsuit on their behalf.