SEATTLE (Reuters) - U.S. labor groups said they were disappointed with Airbus’ decision to build its first U.S. plant in Alabama, where it is effectively impossible to form a powerful union, and warned non-union work could drive down wages across the board in one of the last bastions of U.S. manufacturing.
The move follows rival Boeing Co, whose commercial aircraft unit has made increasing use of non-union labor over the last five years, culminating last year in the opening of a final assembly plant for 787s in South Carolina.
South Carolina and Alabama are among two dozen U.S. states which uphold so-called ‘right-to-work’ laws that prohibit compulsory membership of a union, making it very hard for a union to represent workers there.
Boeing’s shift to South Carolina incensed unions in the company’s heartland around Seattle and led to a bitter legal battle with the National Labor Relations Board that was eventually settled with a four-year labor agreement last year.
“I think it’s extremely unfortunate that a company that has been as successful as Airbus with a fully unionized workforce is choosing to go to a ‘right-to-work’ state to build that plant. It doesn’t make sense, said Paul Shearon, Secretary-Treasurer of the International Federation of Professional and Technical Engineers. The group is a Washington, D.C.-based umbrella group for U.S. and Canadian engineering unions.
The A320 plant in Mobile, Alabama is expected to create some 1,000 jobs, said Airbus, which is part of European aerospace group EADS. It also said the plant had the potential to create 5,000 jobs for Mobile and surrounding areas, as big manufacturing operations tend to lure suppliers and additional jobs.
The plane maker was cagey about employment details, but Airbus CEO Fabrice Bregier said the plant would involve highly skilled jobs. “I think it will be an opportunity for workers here to grow and get better salaries,” he said in Mobile.
But unions said the move would hurt other workers in the sector.
“Non-union employees aren’t good for any workforce. It has a tendency to bring down wages,” said Bill Dugovich, a spokesman for the Society of Professional Engineering Employees in Aerospace (SPEEA), which represents more than 25,000 engineers at Boeing, or ex-Boeing, plants in the United States.
SPEEA’s membership is limited to Boeing workers by its constitution.
Industry-watchers say Boeing’s overall labor costs are undoubtedly lower at non-union plants, but in the absence of public data, it is difficult to quantify how much the company saves a year.
Union-represented machinists at Boeing earn between $11 and $40 an hour, depending on seniority and skill levels, according to their published wage card (here). The company does not publicize what it pays equivalent workers in South Carolina, but people familiar with the company say it is less overall.
Union-represented production line workers generally work overtime and are eligible for performance bonuses. They also get a defined benefit pension — as opposed to a more risky 401(k) retirement savings plan — and health insurance, although employee contributions for that increased in last year’s contract. The company does not disclose benefits for non-union workers in South Carolina.
The country’s biggest and most combative aerospace union which represents machinists and production line workers - the International Association of Machinists and Aerospace Workers - did not return calls requesting comment on Airbus’ plans.
Additional reporting by Karen Jacobs. Editing by Andre Grenon and Edwina Gibbs