WASHINGTON — The government's labor dispute with Boeing Co. is turning into a political headache for President Barack Obama, giving his Republican rivals a fresh opening to bash the administration's economic policies.
From congressional hearings to presidential debates, outraged Republicans are keeping up a steady drumbeat of criticism over the National Labor Relations Board's lawsuit against the aerospace giant.
Obama addressed the case for the first time on Wednesday, declining to criticize or openly support the actions of the independent federal agency. But he said "as a general proposition, companies need to have the freedom to relocate," though they must follow the law when doing so.
"What I think defies common sense would be a notion that we would be shutting down a plant or laying off workers because labor and management can't come to a sensible agreement," Obama said.
The NLRB alleges that Boeing retaliated against its unionized work force in Washington state by opening a new production line for its 787 airplane in South Carolina, a right-to-work state. The agency is not seeking to shut down the new plant, but wants a judge to order Boeing to return all 787 assembly work to Washington.
Boeing says it opened the South Carolina plant specifically to build 787 airplanes. It contends the lawsuit would effectively require the company to close the $750 million plant and lay off thousands of new workers there.
The case – which could drag on for years – has become an unwanted distraction for Obama as he tries to mend relations with the business community and contend with polls that show growing public disapproval over his handling of the economy.
It makes an easy target for Republicans, who call it a case of government overreaching at a time when the private sector is struggling to create new jobs. And it's a major story in South Carolina – a bellwether early primary state in the GOP presidential race. Candidates are lining up to impress voters and the state's Republican governor, tea party favorite Nikki Haley.
"Obama's NLRB has united the Republican Party and turned this government agency into a political pinata," said GOP consultant Scott Reed. "Boeing spent a billion dollars building a plant to create thousands of jobs and it looks like the NLRB stuck their nose in and tried to pull the rug out."
Business groups and their GOP allies say the government is interfering with the right of company managers to choose where and how to expand business operations. Boeing claims it opened the plant for a variety of economic reasons, but NLRB officials say Boeing executives made public comments showing the move was meant to punish union workers for a series of costly strikes.
For Haley, the case has been a litmus test for every GOP presidential candidate visiting the state. And they have not disappointed her.
Former Massachusetts Gov. Mitt Romney, visiting New Hampshire on Monday, said Obama had appointed "union stooges into the NLRB and then they come up with decisions that are really quite extraordinary," like the Boeing lawsuit that he and others have said will drive companies to seek workers overseas.
GOP presidential hopeful Newt Gingrich called for defunding the agency during a recent New Hampshire debate, saying the case could threaten the viability of the nation's 22 right-to-work states, where labor unions can't force employees to be members.
And during a tour of South Carolina last week, GOP presidential candidate Jon Huntsman called on Obama to step in and end the lawsuit to prevent it from scaring other businesses away from the state.
Haley says the only way to make things right "is for the president to tell the NLRB to back off. And until that happens, it is my job to be loud and annoying and in his face until he realizes that what they have done is wrong."
Even South Carolina's Democrats have piled on. Charleston Mayor Joseph P. Riley Jr., a Democrat called the case "a very, very bad decision and a huge mistake that is not good policy for the country."
Obama, ordinarily a reliable supporter of organized labor, has carefully avoided taking a position on the case.
"My hope is that even as this thing is working its way through, everybody steps back for a second and says, `Look, if jobs are being created here in the United States, let's make sure that we're encouraging that,' " Obama said Wednesday.
But the issue became more awkward for Obama when John Bryson, his pick to head the Commerce Department and a former Boeing board member, openly criticized the lawsuit during a Senate confirmation hearing last week.
"I think it's not the right judgment," Bryson said. He said Boeing officials thought they were "doing the right thing for the country" by keeping jobs in the U.S. and not moving them overseas.
Some Democrats and union officials have stepped up their defense of the NLRB, saying Republicans are misrepresenting the case against Boeing. Iowa Sen. Tom Harkin, chairman of the Senate's Health, Education, Labor and Pensions Committee, accused Republicans of peddling "misinformation," distorting the public perception of the case and unfairly attacking the agency.
Labor experts say if the allegations in the complaint are true, it would constitute a standard violation of federal labor laws, which prohibit a company from moving work to punish union workers for past strikes. The complaint lays out several public statements by Boeing executives saying they wanted to relocate new lines for the Dreamliner because of strike activity, including a 58-day work stoppage in 2008.
But such violations can be difficult to prove, especially if the company can show it had other valid motives for opening the new lines in South Carolina.
Perhaps the best scenario for Obama would be for the case to be settled, an outcome that many labor experts expect.
Connie Kelliher, a spokeswoman for the machinists union that sought the complaint, said the union saw nothing in Obama's remarks on Wednesday that deviate from his previous position that the case should run its course in the courts.
"We want to thank President Obama for reminding corporations of the importance of having positive labor relations, which is what the machinists union strives for," she said.
Associated Press writers Bruce Smith in Charleston, S.C., and Kathy McCormack in Salem, N.H., contributed to this report.