Boeing has agreed to a sweeping labor agreement with the International Association of Machinists (IAM) that will keep production of its new 737 MAX jet in the Pacific Northwest.
South Carolina had hoped to land the 737 MAX – which has already received close to 700 orders and is expected to enter service in 2016.
The four-year collective bargaining deal reached by Boeing and the IAM is also likely to end the standoff between the aircraft manufacturer and Barack Obama’s appointees on the National Labor Relations Board (NLRB) – which sued Boeing earlier this year over its decision to locate one of its 787 Dreamliner assembly plants in South Carolina.
According to the NLRB’s complaint, Boeing’s decision to move 30 percent of its Dreamliner production to South Carolina was an attempt to punish the union – even though the company has created more than 2,500 union jobs in Washington State since announcing its intention to open a Lowcountry, S.C. facility.
The NLRB seemed distinctly pleased with the Boeing-IAM deal – although it stopped short of announcing that it would drop its lawsuit.
“The tentative agreement announced today between Boeing and the Machinists Union is a very significant and hopeful development,” NLRB attorney Lafe Solomon said in a statement. “The tentative agreement is subject to ratification by the employees, and, if ratified, we will be in discussions with the parties about the next steps in the process.”
Boeing received an estimated $900 million in taxpayer-funded incentives from the state of South Carolina in exchange for its decision to locate its new Dreamliner facility in North Charleston. At the federal level, the company has also benefited substantially from federal contracts as well as its relationship with the Obama administration.
So … who won and who lost in this shakedown?
Given that all of the 737 MAX planes will now be built by union laborers in Renton, Washington, the IAM clearly scored a major victory – as did the state of Washington.
“The agreement should immediately provide job security in Washington state,” The Seattle Times reported.
Another winner? The NLRB, which used an unprecedented assault on the right of a private company to locate jobs wherever it chooses as leverage in this fight on behalf of union workers.
UPDATE: According to S.C. Gov. Nikki Haley, Boeing’s decision is a “win” for both the company and South Carolina.