Morning Bell: Obama’s Attack on Private Industry

Mike Brownfield /

You might think that a U.S. company’s decision to expand its manufacturing facilities and create 1,000 new jobs here at home — rather than overseas — would be hailed by the Obama Administration as a step in the right direction, especially with nine percent unemployment. You’d be wrong. Instead, President Barack Obama’s National Labor Relations Board (NLRB) is doing all it can to throw a wrench in the machinery of private industry.

The story begins with Boeing Corporation’s decision to build a new assembly plant in Charleston, South Carolina, in order to produce the 787 Dreamliner, the company’s fastest selling airliner. (To date, Boeing has 800 planes on order.) The NLRB, which is charged with remedying unfair labor practices, got wind of the decision and last month filed a complaint against Boeing, alleging that the company decided to build the plant in South Carolina out of retaliation for union strikes at its Washington state facilities.

Those locations have caused difficulties for Boeing. The International Association of Machinists (IAM) regularly goes on strike during contract negotiations, causing Boeing to miss orders and costing it billions in lost business. Boeing considered building its new plant in Washington, but the IAM refused to sign a long-term no-strike agreement. That played a role in Boeing’s decision to expand into South Carolina, a right-to-work state with a good business and tax climate, as Heritage’s Rea Hederman, Jr., and James Sherk explain.

The NLRB’s actions are drawing strong criticism from Republicans in the U.S Senate. “It’s clearly outside of the authority of this federal government to be threatening and bullying and trying to intimidate companies like Boeing who should have the freedom to locate their plants anywhere they want. It’s intimidation,” Senator Jim DeMint (R-S.C.) said Wednesday. DeMint joined with 18 senators in writing a letter to the president last week condemning the NLRB’s complaint:

We consider this an attack on millions of workers in 22 right-to-work states, as well as a government-led act of intimidation against American companies that should have the freedom to choose to build plants in right-to-work states.

If the NLRB prevails, it will only encourage companies to make their investments in foreign nations, moving jobs and economic growth overseas. America will not win the future if Washington penalizes workers in states that have discovered winning economic strategies.

But in a White House where the cozy relationship between big labor and big government couldn’t be any closer, the NLRB’s moves are just the Obama administration’s latest effort to come to the defense of the union machine. And it’s also a direct shot at private industry’s freedom to make fundamental business decisions, which has serious consequences for the U.S. economy. Hederman and Sherk write:

If the Obama Administration succeeds, it will chill business investment. Unions raise business costs and discourage employers from investing and expanding. Studies consistently show that unionized employers create fewer jobs than non-union employers. Forcing businesses to invest in states with bad business climates will cause them to scale back their investments. It might create a few more jobs for union members, but will mean fewer jobs and higher unemployment in the economy overall.

President Obama has remained silent on the issue, with a White House official maintaining that the NLRB’s complaint is an “independent agency’s enforcement action.” Governor Nikki Haley (R-S.C.) isn’t satisfied and has a pointed question for the president, as National Review Online reports.

I want to ask him why he is allowing unelected bureaucrats to come in and do the unions’ dirty work on the backs of our businesses . . . It’s hurting the jobs in South Carolina and every other right-to-work state. He owes us an answer.”

The answer to Haley’s question can be found in the Obama-big labor alliance. If the Obama NLRB prevails, it will have struck a significant blow against right-to-work states by significantly expanding labor’s ability to dictate where companies do business, all while solidifying their base of political power. The losers, unfortunately, will be private industry, job seekers and the U.S. economy.

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