Aerospace Assembly / The Editorial

Boeing Bites the Hand That Feeds

In June 2011, we defended The Boeing Co. against a complaint filed against it by the National Labor Relations Board (NLRB). At the time, the NLRB was seeking to force the aerospace giant to bring an airplane assembly line back to its un-ionized facilities in Washington instead of moving the work to a nonunion plant in South Carolina.

The NLRB said Boeing’s decision to transfer a second assembly line for the 787 to a new plant then under construction in North Charleston, SC, was motivated by an unlawful desire to retaliate against the International Association of Machinists and Aerospace Workers for past strikes in Washington. Be that as it may, we couldn’t imagine why the Obama Administration would discourage any manufacturer from building an assembly plant anywhere in the United States for any reason, given the desperate need for good-paying jobs.

Our support only goes so far, however. In October, Boeing sent a letter to its suppliers urging them to attend a Nov. 15 workshop in Chicago. The purpose of the workshop was to show U.S. companies how to set up manufacturing operations in Mexico.

The workshop was organized by American Industries Group, a private company that builds or leases manufacturing facilities in Mexico for corporate clients. The company also offers administrative support, including human resources, customs, accounting and environmental regulatory approval. American Industries touts numerous advantages of setting up shop in Mexico—among them, “up to 80 percent in labor-cost savings.”

In short, Boeing is actively encouraging its suppliers to outsource American jobs. That’s ironic, given that Boeing CEO Jim McNerney is chairman of President Obama’s council on exports.

Remember the hubbub over the U.S. Olympic team’s uniforms being made in China? That’s small potatoes compared to the billions of dollars Boeing receives in contracts from the federal government. In 2011, Boeing derived 38 percent of its revenue from U.S. government contracts—and more, if you count sales gained through U.S. diplomatic efforts. Boeing’s Defense, Space and Security division delivered 115 military jets, 131 new and remanufactured helicopters, four satellites and more than 10,500 weapons systems. All totaled, the division rang up $32 billion in gross revenue, with a backlog of nearly twice that.

Granted, the Defense Department is pressuring contractors to reduce costs. (Hard to believe, I know.) And, having a low-cost labor base just across the border, in the same time zone, is more desirable than, say, outsourcing to China.

Even so, it seems wrong somehow that a company that gets more than a third of its revenue from American taxpayers would urge its suppliers to make anything outside our borders, much less high-value assemblies like aerospace components. We don’t care if Boeing or its suppliers are in right-to-work states or not—but they should be in the United States.

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