Alexander Says NLRB Complaint Against Boeing “Will Cause the Export of Jobs, Not the Export of Airplanes”

Says complaint will hurt unionized states as well as right-to-work states by sending jobs overseas

Posted on May 17, 2011

“This is an assault on every middle-income American, and especially on the millions of middle-income Americans who have manufacturing jobs.”

– Lamar Alexander 

WASHINGTON – On the floor of the United States Senate today, U.S. Senator Lamar Alexander (R-Tenn.) said the decision by the acting counsel of the National Labor Relations Board to file a complaint against Boeing for expanding production to South Carolina would “freeze job expansion in the United States at a time when we need job expansion the most.”

Alexander continued: “If jobs cannot move into Tennessee and other right-to-work states because of the Boeing complaint, they may not move into the states that do not have a right-to-work law…. If you want to put a plant in, say, Michigan, which is a unionized state, you might not do that because you then could not move to South Carolina or Tennessee or Arkansas or any other state with a right-to-work law.”

Senators Alexander, Graham, and DeMint last week introduced the Job Protection Act of 2011 to preserve federal law’s existing protections of state right-to-work laws, clarify that the NLRB would not be able to order an employer to relocate jobs from one location to another, and guarantee an employer the right to decide where to do business within the United States.

The full text of his remarks follows:

“I wish to speak about the events of the last few weeks that have followed the decision by the National Labor Relations Board’s acting counsel to file a complaint against the Boeing Company, alleging basically that the fact that they are expanding their production of airliners at a new plant in South Carolina, which is a right-to-work state, is prima facie evidence of an unfair labor practice.

“This would, in effect, establish for the first time since the Taft-Hartley Act was passed in 1947, the idea that it is against the federal law for a company that is producing in a union state to move or expand its facilities in a right-to-work state, of which there are 22.

“We are talking about the first new plant in 40 years to build large airplanes. The Boeing Company builds most of its planes in Washington State. It is the nation's largest exporter. It has 170,000 employees around the world, and 155,000 of them are employees in the United States. These are good jobs.

“But at the Senate Health, Education, and Labor Committee hearing on Thursday, the general counsel of Boeing said the company expects to lose its appeal of the general counsel’s complaint when it is heard before an administrative judge on June 14. Then they expect to lose the appeal of that decision to the National Labor Relations Board because the company assumes that the general counsel is following the same view of the law that the President's appointees on the NLRB are following. However, then Boeing expects to win the case when it goes to the U.S. Court of Appeals or, perhaps, even to the Supreme Court. But it will take two to five years for all that to happen.

“I ask: What happens to American jobs in the meantime?

“Well, first, this complaint against Boeing will slow the number of good, new jobs coming into my state of Tennessee, which has a 9 percent unemployment rate, and it has had that for two years. I have watched our state grow over the last 30 years, from the time I was governor. We had a hearing last week that Senator Harkin, chairman of the Health, Education, and Labor Committee, called about middle-class incomes. What I said at the hearing was that the effect on middle-class incomes in Tennessee -- the state I know the most about -- is that 30 years ago we were the third poorest state. Because the auto industry chose to come to our state, partly because it was a central location in the population market and because it is a right-to-work state with a different sort of labor environment than other states, middle incomes have gone up.

“One-third of the manufacturing jobs in our state are now auto jobs. Nissan is there. General Motors is there. Volkswagen just came there. Hundreds of suppliers have come to Tennessee. They like the environment. They like the road system. They like the central location. But they also like the right-to-work law.

“Suddenly, any supplier or any manufacturer who wants to create a new facility in one of the 22 right-to-work states, including Tennessee, according to the National Labor Relations Board’s acting counsel, is going to have to think twice because that company, which could be a small company, may not want to spend two to five years before the National Labor Relations Board. I think the acting counsel knew exactly what he was doing. He was trying to freeze job expansion in the United States at a time when we need job expansion the most.

“There is an unintended consequence to this. If jobs cannot move into Tennessee and other right-to-work states because of the Boeing complaint, they may not move into the states that do not have a right-to-work law. Why is that?

“According to Jim McNerney, the CEO of Boeing: ‘An unintended consequence of the Boeing complaint [is that] forward thinking CEOs also would be reluctant to place new plants in unionized states -- lest they be forever restricted from placing future plants across the country.’

“If you want to put a plant in, say, Michigan, which is a unionized state, you might not do that because you then could not move to South Carolina or Tennessee or Arkansas or any other state with a right-to-work law.

“If you cannot go to a unionized state, and if you cannot go to a right-to-work state, then where do you go if you want to make things? You go overseas. This action by the NLRB’s acting counsel is the single most important action I can imagine that would make it more difficult to create good, new jobs in Tennessee and would make it more likely that manufacturing jobs would go overseas.

“The President of the United States asked the chief executive of Boeing, Mr. McNerney, to chair the President’s Export Council. I presume what President Obama would like for Mr. McNerney to do is to export airplanes, not export jobs. But what the NLRB ruling will do is cause the export of jobs, not the export of airplanes.

“Boeing has 170,000 employees. About 90 percent of them are in the United States. But Boeing sells its airplanes everywhere in the world, and Boeing can make its airplanes anywhere in the world. There may be other countries that come to Boeing and to other manufacturers in the United States and say: We want you to make in our country what you sell in our country. After this NLRB decision, they may be more tempted to do that.

“Fortunately, there are other trends suggesting that manufacturing companies around the world may be more likely in the next few years to make here what they sell in the United States. That is what President Carter said to the governors 30 years ago. Governors, he said, go to Japan. Persuade them to make in the United States what they sell in the United States. Off I went to Tokyo. I asked Nissan to come to Tennessee. They chose us because of our central location and right-to-work law, just as other auto [companies] have done. Nissan tells me soon 85 percent of what they sell in the United States will be made in the United States. Thirty years ago they were making in the U.S. almost none of what they sold in the United States. They were making it in Japan. We were worried then that Japan was going to take us over. That has changed. Now they are making here what they sell here.

“An article in the Economist this week says there may be a manufacturing renaissance coming. What is happening in China where they are making things today is a lot like what happened in Japan 30 years ago. As China becomes more prosperous, wages will go up. As Japan became more prosperous 30 years ago, wages went up. In the auto industry, where wages only constitute maybe 20 percent of the total cost of what a supplier may have to spend to make a part for a Volkswagen assembly plant, wages get to be less important.

“People look at other things. Manufacturers would look at a variety of actions by a government before deciding where to make the airplane or where to make the car or where to make the appliance that might be sold in a country.

“They are going to have plenty of incentives naturally to make a lot of products in the United States because the country that produces 25 percent of all the money in the world, which we do, is going to be buying a lot of stuff unless we do our best to throw a big wet blanket on making here what we sell here, which is precisely what this administration has been doing.

“We have a high corporate income tax. But give the President the credit – he said maybe we want to change that. We should because a high corporate income tax makes it better for manufacturers to make products overseas. The health care law takes profits away from companies that they might use to create new jobs here. I have had heads of restaurant companies tell me they are not going to invest anymore in the United States because the health care taxes take away all of their profits. Regulations make credit harder to get, and regulations drive up energy and gasoline prices. All of this makes it harder to make here what manufacturers sell here.

“Now we have an action from the National Labor Relations Board’s acting counsel that may have the effect of law for two to five years that says it is prima facie evidence of an unfair labor practice if a company that is producing in a union state expands or moves to a right-to-work state. This is an assault on every middle-income Tennessean and on millions of middle-income Americans who have manufacturing jobs -- certainly, everyone in the 22 right-to-work states. But as the Boeing chief executive said, it could be just as much of a disincentive to a state such as Michigan or Illinois or some other state that does not have a right-to-work law because why would you put a plant in Michigan if later you would not be allowed to put it in Tennessee?

“If General Motors has plants in both right-to-work and non-right-to-work states, we are going to make it more difficult for General Motors to expand in America. Where are they going to expand? They can expand overseas. They can be making there what they sell there instead of making it here.

“Some of my friends on the other side of the aisle like to talk about outsourcing jobs. This is the mother of all outsourcing jobs plans.

“For the next two to five years, we have the unhealthy situation for jobs that any manufacturer who wants to expand will have to think twice about expanding in a right-to-work state and then think at least once about coming in the first place to a state that does not have a right-to-work law. The only other option I can see for those jobs is to make them overseas. That will not only slow job growth in the United States where we desperately need it, but it will speed up the sending of American jobs overseas.”

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