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Obama Jobs Push Collides With NLRB Complaint

President Barack Obama, emphasizing job creation in his 2012 re-election push, faces a drag on his message from his own appointees to the board created as a watchdog for workers’ rights.

After picking the members of the National Labor Relations Board, Obama finds himself pressured by Republicans and business groups to distance himself from the NLRB’s complaint against Boeing Co. (BA)’s 2009 decision to build a factory in South Carolina.

While the case pivots narrowly on whether Boeing retaliated against Seattle-area union members by citing past strikes in moving work to a nonunion state, Obama’s critics have recast it as meddling with a growing employer in a recovery with too few new jobs, according to scholars such as Princeton University’s Julian Zelizer and Clark University’s Gary Chaison.

“It does hurt him,” said Chaison, who is based in Worcester, Massachusetts. “On the surface it appears that Obama’s creation of jobs is really a secondary priority and satisfying his political allies comes first.”

Each side in the debate is symbolic to its partisans. Boeing is the world’s largest aerospace company, the biggest U.S. exporter and builds its jetliners in the U.S. The NLRB earned labor groups’ praise for backing the Machinists in their dispute with Boeing amid an anti-union political climate.

Those emotions and the onset of the 2012 campaign inject electoral passions into the NLRB’s inquiry into how Boeing chose a plant to build the 787 Dreamliner, the first composite-plastic airliner and a jet best known for three years of delays.

‘Off Center’

“Republicans have been able to use this case as a symbol of their claims that he is off center when it comes to domestic policy,” Zelizer said yesterday in an interview.

Obama has limited his comments on the matter. Asked about the complaint at a news conference in June, Obama said management and labor should be able to reach an agreement and declined to get into specifics, saying the NLRB was an independent agency.

“As a general proposition, companies need to have the freedom to relocate,” he said then. “What defies common sense is the notion that we would be shutting down a plant or laying off workers because labor and management can’t come to a sensible agreement.”

Peter Schaumber, a former NLRB chairman who was appointed by President George W. Bush, said companies he has worked with in Canada have told him they would “think twice before doing business in the United States as a result of this case.” He declined to identify the companies.

‘Cease This Attack’

Nine state attorneys general, including South Carolina’s Alan Wilson, a Republican, sent a letter to the board in April calling for an end to “cease this attack on our right to work, our states’ economies, and our jobs.”

The complaint filed April 20 against Boeing by the NLRB’s Acting General Counsel Lafe Solomon didn’t seek to shut the South Carolina factory. It called for increasing production at the planemaker’s commercial hub in Washington state to an equivalent level as planned for South Carolina.

The NLRB cited statements by Boeing executives and spokesmen that the “overriding” factor in the choice of South Carolina was difficulty in reaching contracts with Seattle-area union workers. That would be a retaliatory step forbidden by federal law, the board’s complaint said.

Boeing has denied that it was trying to punish striking union members in picking South Carolina as the home of the first commercial-jet factory outside Washington’s Puget Sound region. The North Charleston plant opened last month and has 1,000 workers, who aim to produce their first Dreamliner next year.

Chilling Message

Being forced by the NLRB to keep 787 work in Washington over the favored South Carolina site would send a chilling message to business, Boeing Chief Executive Officer James McNerney wrote in a May 11 Wall Street Journal op-ed.

“The world the NLRB wants to create with its complaint would effectively prevent all companies from placing new plants in right-to-work states if they have existing plants in unionized states,” wrote McNerney, 62. “As an unintended consequence, forward-thinking CEOs also would be reluctant to place new plants in unionized states lest they be forever restricted from placing future plants elsewhere.”

The NLRB has said it had no choice but to enforce U.S. labor laws and file the complaint. Any hope for a swift resolution has evaporated as a hearing in a Seattle courtroom drags into its third month of preliminary arguments over procedural matters.

Hearing Schedule

Lawyers outlined a hearing schedule yesterday for the rest of the year and discussed various stages at which either side could escalate a matter to the full labor board or to federal court, extending the case. The board now has four members, with one vacancy, and two are set to leave by Dec. 31.

Obama’s Republican critics, led by South Carolina Governor Nikki Haley and Senator Lindsey Graham, a South Carolina Republican, have urged him to take the one step that could influence the board: remove Solomon as acting general counsel, a post to which he was named by the president.

Schaumber and Ron Meisburg, a former NLRB general counsel who also served under Bush, said there is little Obama can do to stop the board from pursuing a case that could hurt him politically.

“I never got a call from the president in my four-and-a- half years in that job, and I would hope that that’s still the case,” Meisburg said in an interview.

Wolfgang Demisch, an aerospace financial consultant in New York, questioned Boeing’s fight with the Machinists union when the planemaker is gearing up for a new variant of the narrow- body 737, its top-selling model.

He drew a contrast between Boeing and Airbus SAS, a unit of Paris- and Munich-based European Aeronautic Defence & Space Co. and the world’s largest commercial planemaker after outselling its U.S. rival since 2003.

Boeing and the union “need to come together in order to survive,” Demisch said. “If Airbus can build planes reasonably effectively in Germany, where by law there’s labor representation on the board, then it can’t be totally impossible.”

To contact the reporters on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net; Susanna Ray in Seattle at sray7@bloomberg.net

To contact the editors responsible for this story: Larry Liebert at lliebert@bloomberg.net; Ed Dufner at edufner@bloomberg.net

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