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May 21, 2011

Boeing in SC

I've been poring over the coverage of the recent brouhaha over the National Labor Relations Board complaint that when Boeing sited its new 787 Dreamliner facility in South Carolina it did so in order to intimidate union workers at its Puget Sound facilities.  For all the bloviating over this issue from politicians and shoot-from-the-lip commentators, I must say that I find the issues murky and difficult to judge.

On the one hand, Boeing management did explicitly link the move to union negotiations, which appears to be a pretty clear unfair labor practice (Note that many of those screaming about the complaint basically think the law on unfair labor practices is ridiculous; intimidating workers is just fine in their book, especially if they can benefit from it).  On the other hand, no union jobs were actually eliminated by this move; indeed, Puget Sound has added Boeing jobs.  The timing of the complaint--two years after the move, and several months before the beginning of production in North Charleston--is also problematic--although given previous "ownership" at the NLRB, it's understandable.  In any case, though, it's just a complaint, not a ruling; there will be hearings, and in all likelihood a court case.  It'll drag on for years.  For all the allegations that the complaint is politically motivated, the politicization seems to be coming primarily from its opponents.

One interesting feature, though, of how the controversy has played out in my native state: folks there are framing it (please curb your astonishment) as a "states' rights" issue.  These, after all, are "local" jobs, provided by a "local" employer, under assault from a foreign invader.  A prime example of this is this recent cartoon by Robert Ariail of the Spartanburg Herald-Journal.  I must confess I'm not sure what Ariail himself thinks of this argument (I generally like his work), but it seems to capture a lot of instate sentiment.  Suffice it to say that this is a crock.  These are not South Carolina's jobs (and for that matter they aren't Puget Sound's jobs, either); they're Boeing's jobs.  South Carolina only, er, services them, with deference to management prerogatives and massive subsidies.  Really, the South's been down this road before.  I recall with amusement how some years ago a company ironically still named Murray Ohio [well after it had picked up and moved to Middle Tennessee] was the target of a hostile takeover bid from a Swedish firm.  Management responded with a massive publicity campaign demanding  "Tennessee jobs for Tennesseans"--until they recruited a white-knight counteroffer from a British firm.  Their Tennessee plant closed some years ago, BTW, devastating the small town of Lawrenceburg.  Easy come, easy go.  Boeing, TBS, isn't as likely to go easily; the investment's too big.  Also (and this is the big hope of such development schemes) it could well become the hub for a complex of suppliers.  Unlike Murray, which never did much to build capacity in Lawrenceburg apart from its own sprawling factory, Boeing may well nurture a community of skilled labor and entrepreneurship in the Low Country that could generate economic dynamism on its own and supplant Boeing should it later decide to depart.  Or it may rely for its inputs on an increasingly global supply chain and build little capacity locally at all.  The truth is probably somewhere in between (I may well more to say about this in a future posting).

I continue to suspect that big-fish catches like Boeing, while they're great for local bragging rights, are a really problematic way to do what economic development policy really needs to do, namely build the capacity for self-sustaining growth.  Wide swatches of the South have been finding that out to their sorrow over the past twenty years, as jobs added at BMW or Nissan have been more than counterbalanced by manufacturing losses elsewhere.  But building capacity requires a strategy somewhat different than selling oneself cheap to an outsider who needs you less than you need him.  Can such a strategy be formulated in the present climate?  Stay tuned.

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