NORTH CHARLESTON, South Carolina (Reuters) - Boeing Co opened a new $750 million 787 Dreamliner final assembly plant on Friday in South Carolina, even though the federal government has complained the company located the facility there to avoid employing union labor.
The air of celebration at the plant in North Charleston masked the fact that the facility is at the center of a major struggle between the administration of President Barack Obama, and big business and Republicans over U.S. labor law.
“Boeing has just made a statement today,” Jack Jones, vice president and general manager of Boeing South Carolina, said at the ribbon-cutting ceremony held on a tarmac outside the building in 95-degree heat.
“We believe that airplanes that are that vital and that important can be built outside the Puget Sound (in Washington state),” he said.
Boeing announced in October 2009 that it had chosen North Charleston as the site of its second final assembly plant for the Dreamliner, instead of Washington state where the company is headquartered and has built airplanes for decades.
Boeing has taken orders for more than 800 of its next generation commercial airplanes and plans to deliver planes to Japan this fall.
South Carolina, a right-to-work state, offered the company incentives and tax breaks that could add up to $900 million if Boeing hires at least 5,000 employees, former South Carolina Commerce Secretary Joe Taylor told Reuters on Friday.
But union workers in Washington, home of the primary Dreamliner final assembly plant, accused Boeing of acting in bad faith. Boeing tried and failed to negotiate a “no-strike” clause in Washington state with the International Association of Machinists and Aerospace Workers.
In April, the National Labor Relations Board filed a complaint against the company, charging its decision to locate the plant in a non-union state retaliated against union machinists for previous strikes.
The complaint also claims Boeing violated federal labor law by transferring work from a union to a non-union facility. The board wants Boeing ordered to move the production line back to Washington.
Boeing responded that it is pro-growth, not anti-union. The company so far has hired 1,000 workers for the new 1.2 million square foot plant, which was finished six months ahead of schedule. Work will start in July on building three 787 wide-body commercial airplanes per month.
“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,” Boeing Chairman and Chief Executive Officer Jim McNerney wrote last month in The Wall Street Journal.
The first hearing in the labor board’s complaint will be held June 14 in Seattle.
Three days later, the Republican-led U.S. House Oversight and Government Reform Committee will hold a hearing in North Charleston. Some members have expressed concern about the complaint’s effect on economic recovery.
South Carolina Republicans on Friday expressed outrage at what they called an attack by the federal agency and a threat to industry and jobs in the state.
“We earned the right to build airplanes here and nobody’s going to take that away from us,” Senator Lindsey Graham said to cheers at the ribbon-cutting.
Graham told Reuters that the labor relations board is “stacked with union stooges” and called the Obama administration “schizophrenic” for recently nominating John Bryson, a member of Boeing’s board of directors, as commerce secretary while a federal agency is suing the company.
Graham said he plans to block Bryson’s confirmation by the Senate “until this administration says that Boeing is a good, ethical company.”
A National Labor Relations Board spokeswoman declined to comment on Friday.
“A worker’s right to strike is a fundamental right guaranteed by the National Labor Relations Act,” the board’s Acting General Counsel Lafe Solomon said in April.
“We also recognize the rights of employers to make business decisions based on their economic interests, but they must do so within the law.”
Boeing worker Jay Grave, who said he is on the team that will attach the wings to the planes, wasn’t worried about his job. “I think there’s enough work for everybody,” he said on Friday.
Editing by Colleen Jenkins and Greg McCune