I’ve heard plenty of people dismiss Atlas Shrugged (the book as well as the movie) as overwrought, contrived paranoia about the regulatory state. The government can’t run companies through its regulatory system, critics scoff, no matter what a Russian ex-patriate thought more than 50 years ago. No one is marching into manufacturers in the US and telling the Hank Reardons of the world what they can build and where.
In 2009 Boeing announced plans to build a new plant to meet demand for its new 787 Dreamliner. Though its union contract didn’t require it, Boeing executives negotiated with the International Association of Machinists and Aerospace Workers to build the plane at its existing plant in Washington state. The talks broke down because the union wanted, among other things, a seat on Boeing’s board and a promise that Boeing would build all future airplanes in Puget Sound.
So Boeing management did what it judged to be best for its shareholders and customers and looked elsewhere. In October 2009, the company settled on South Carolina, which, like the 21 other right-to-work states, has friendlier labor laws than Washington. As Boeing chief Jim McNerney noted on a conference call at the time, the company couldn’t have “strikes happening every three to four years.” The union has shut down Boeing’s commercial aircraft production line four times since 1989, and a 58-day strike in 2008 cost the company $1.8 billion.
This reasonable business decision created more than 1,000 jobs and has brought around $2 billion of investment to South Carolina. The aerospace workers in Puget Sound remain among the best paid in America, but the union nonetheless asked the NLRB to stop Boeing’s plans before the company starts to assemble planes in North Charleston this July.
The NLRB obliged with its complaint yesterday asking an administrative law judge to stop Boeing’s South Carolina production because its executives had cited the risk of strikes as a reason for the move. Boeing acted out of “anti-union animus,” says the complaint by acting general counsel Lafe Solomon, and its decision to move had the effect of “discouraging membership in a labor organization” and thus violates federal law.
Ah, that must be the Anti Dog-Eat-Dog Law, or one of the Fairness Laws, or something, right? The WSJ isn’t sure what law the NLRB is talking about, either. Not only do businesses routinely relocate to find the most advantageous environment possible, states and cities compete for that business by calculating their business climate. If this has escaped the notice of the NLRB, perhaps they should get out more.
Workers have the ability to collectively bargain for wages, benefits, and working conditions in the private sector if they desire. If they make their labor too costly and businesses can conduct their operations elsewhere, then they have the right to do so, too. The government has no legitimate role in forcing business owners to be hostages to their workforce. If the workers price themselves out of their jobs, then they need to deal with the consequences. The ability to collectively bargain does not include a guarantee of a job.
Otherwise, we all pay higher prices for the same product or service — and for Boeing, which competes against the EU’s Airbus, it will mean lost sales and less work altogether in the US. Prices of flying will increase, while the taxes that flow from both employment and sales will decrease. Nor will it end there. Such a decision will lock businesses in their present locations and give local and state governments carte blanche to hike taxes and fees, secure that business owners won’t be able to vote with their feet — and leave taxpayers holding the bag when businesses go under and capital stops flowing to the US for investment.
But, you know, that Ayn Rand was a nut, or something.