Back in 1969, John Lennon famously wrote, "All we are saying is give peace a chance."
Well, here in May 2011, while labor peace is not always at hand, maybe we can at least give labor truth a chance. Unfortunately, telling the truth seems to be increasingly difficult for the CEOs of our multinational corporations when talking about "Making It In America" and saving and creating American jobs. And Exhibit A right now is Jim McNerney, who is the Chairman, President and CEO of the Boeing Company.
The reason I am picking on Mr. McNerney is that he is defending Boeing's decision to retaliate against its union workforce in Everett, Washington, by moving thousands of jobs to a non-union location in South Carolina, with statements that are among the most misleading and disingenuous by a major American CEO ever. And I've been around long enough to have heard a lot of statements by a lot of big company CEOs.
Compounding my dismay with Mr. McNerney is that he also happens to currently hold a very senior economic advisory position in the Obama administration as head of the President's "Export Council." He holds this position of crucial influence despite the fact that for years he's been exporting thousands of his American manufacturing jobs to Mexico and China.
The facts of this dispute are pretty simple.
As reported by Hal Weitzman and Jeremy Lemer in the Financial Times, "nineteen [Republican] Senators are threatening to block President Barack Obama's two appointments to the National Labor Relations Board...after the organisation filed a complaint last month against Boeing that seeks to force the manufacturer to transfer 787 production from the non-union factory in South Carolina to its unionised facilities in the Seattle region." The NLRB believes that Boeing selected South Carolina -- a right-to-work state -- purely in retaliation for a strike in 2008 at the Everett facility.
To attack the NLRB's conclusion, Mr. McNerney, in a preferentially placed op-ed in the Wall Street Journal , said the following (the underscoring is mine):
"We viewed Everett as an attractive option and engaged voluntarily in talks with union officials to see if we could make the business case work. Among the considerations we sought were a long-term 'no-strike clause'.
"Despite months of effort...union leaders couldn't meet expectations on our key issues.
"We hold no animus toward union members, and we have never sought to threaten or punish them for exercising their rights, as the NLRB claims. About 40% of our 155,000 U.S. employees are represented by unions - a ratio unchanged since 2003."
Now, for the truth:
- The most important right any union has is the right to strike. Without this right, what real opportunity does it have to ensure fair and balanced treatment for workers? Thus it is at once irresponsible for McNerney to make this unreasonable demand and disingenuous for him to then say that union leaders couldn't meet his "expectations on key issues." As Christopher Corson, General Counsel of the International Association of Machinists and Aerospace Workers, wrote on May 9, "In every state in our nation, the law provides important protections for individual workers when they act together to improve their work lives for themselves and their families...If retaliation were permitted, there would be no protection."
- McNerney says that "Boeing never sought to threaten or punish [workers] for exercising their rights." Yet the NLRB based its finding on the very specific comment by Boeing executives that "avoiding strikes was a central reason for the decision."
- Yes, "40% of Boeing's [overall] U.S. employees" today may be "represented by unions", and yes, this ratio may be "unchanged since 2003." However, in the late '60s when I was in college in Seattle and working nights as a Sheetmetal Workers journeyman, the number of Machinists and other union members working for Boeing in the greater Seattle-Everett area was around 22,000, and by the year 2000 it was around 50,000. Now just a decade later, with McNerney as CEO for the last five years, the number of union members at Boeing in the Pacific Northwest has shrunk to around 35,000, with at least 20,000 of these jobs having moved to China.
- In just 15 years or so, using an initiative benignly called "systems integration mode of production" which entails providing foreign suppliers and overseas subsidiaries with massive amounts of business knowledge, management practices, training and other intangible exports, Boeing has gone from producing nearly 100% of its commercial aircraft and parts in America to today producing only a small fraction of that work here. The workhorse 727 airframe, launched in 1963, had just a 2% foreign content; the 777 airframe, launched in 1995, has about 30% foreign content; the new 787 Dreamliner, officially launching this year, will have nearly 70% of its manufacturing content coming from foreign sources, with workers in Everett accounting for only about 4% of each aircraft's value. This massive transfer by Boeing, and by almost every other American corporation committed to offshoring, of intellectual property that took decades to develop with internal investment and support from government-funded research laboratories will, with its massive ripple effects throughout our economy, ultimately be an even bigger 'drain' on America than even the direct offshoring of millions of American jobs over the last 15 years.
Jim McNerney's very public and cynical efforts, however, are just another egregious example of the broad opportunism that many American multinational corporation CEOs have embraced in their continuing efforts to offshore American jobs, cut the wages and benefits of the American workers whose jobs are not being shipped overseas, and, whenever they can, BUST UNIONS.
As reported by David Wessel (Wall Street Journal, 4-19-11), "U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home, sharpening the debate over globalization's effect on the U.S. economy." According to the Commerce Department, these companies cut their work forces in the U.S. by 2.9 million during the last decade while increasing employment overseas by 2.4 million, which is a big shift from the '90s when they added 4.4 million jobs in the U.S. and 2.7 million abroad. In just the year 2009, they cut 1.2 million, or 5.3%, of their workers in the U.S. but only 100,000, or 1.5%, of their workers abroad. Three highlights:
- Between 2005 and 2010, General Electric, the nation's largest industrial conglomerate and #6 on the Fortune 500 list, cut 28,000 workers in the U.S. but only 1,000 workers overseas. This notwithstanding that GE's Chairman and CEO, Jeffrey Immelt, now heads President Obama's "Council on Jobs and Competitiveness", which is supposed to help create jobs in the United States and not ship them overseas.
- Cisco Systems Inc., the Fortune #62 company that makes networking gear, has also been creating jobs much more rapidly overseas. Over the past five years, it has added 21,350 employees overseas, but only 10,900 in the U.S. At the beginning of the last decade, 26% of Cisco's work force was overseas; today, around 46% is.
- Oracle, the Fortune #96 company that makes business hardware and software, added twice as many workers overseas over the past five years as in the U.S. At the beginning of the last decade, it, like Cisco, had many more workers at home than abroad; today, however, around 63% of its employees are located overseas.
McNerney and his fellow CEOs tout many global 'differentials' as the reasons why they've been economically 'downgrading' some jobs (with moves to South Carolina and other right-to-work states) and offshoring others (to China and elsewhere). Wessel further wrote that American multinationals repeatedly say in justification that it is the "combination of the U.S. tax code, the declining state of U.S. infrastructure, the quality of the country's education system, and barriers to the immigration of skilled workers [that is] making the U.S. less attractive to multinationals." Yet it is these very multinationals which every day support and maintain these differentials by:
- Fighting to preserve the corporate tax practices that favor overseas earnings and employees (read "The Tax Man Cometh - Just Not For Everybody");
- Resisting efforts to couple government infrastructure investments with 'Made in America' requirements that are no more demanding than every other member of the G-20 has for its own infrastructure investing;
- Fighting the adoption of our own Manufacturing & Industrial Policy, which we need in order to compete with the mercantilist practices of our major trading partners, often by blaming the relatively poor state of American public school education, which, while of grave concern, has absolutely no correlation; and
- Manipulating our immigration practices so that these companies can continue to hire employees from India, Taiwan and China at the expense of qualified American job seekers.
At the end of the day, as I noted earlier, what's really going on here is a massive, nation-wide attempt to bust unions in order to further enrich our nation's multinational corporations. Yet this is happening at precisely the point in time when the United States needs millions more, not millions fewer, union jobs in order to stabilize our middle class.
For our country to be ascendant again, American workers everywhere -- at Boeing and hundreds of other major corporations -- must be treated as the highly skilled, enormously productive and wealth-producing 'assets' they are. We need more union-made quality goods to sell abroad and many more union paychecks producing fair incomes here at home if we are to grow ourselves out of the dismal ongoing jobless recovery we are experiencing.
Expanding union membership will be one of the surest signposts on the road back to a vibrant, consuming middle class, more income equality, and fairness in employment. And when we have all of this again, along with fairer trade practices, our nation will prosper as it did for the half century before unfair globalization and union-busting practices began to run amok twenty or so years ago.
In all of our manufacturing industries -- not just in aircraft manufacturing -- we must ensure that American workers compete on level-playing fields. Right now, however, our workers are forced to compete against foreign workers, many of whom work for American multinational corporations, who are the indirect beneficiaries of illegal subsidies, massive currency manipulation and shameful environmental practices that swamp any measure of true country 'comparative advantage'. All the while here at home, with very limited mobility in general but especially in this distressed economy, workers must confront the enormous power that multinational corporations' almost unlimited geographic, capital and technology mobility gives them.
The members of America's unions are skilled, resilient and tenacious. They did not win the 40-hour work week, benefits and safer working conditions in one fell swoop. These integral pathways and others to the middle class lifestyle -- a lifestyle that is now being challenged in so many of our cities and towns -- were hammered out over years of negotiations with very powerful corporations. And sometimes these women and men had to strike to ensure fair dealing. But in exchange for their skills, hard work and productivity, these unionized workers produce real wealth that's been shared for generations across our entire economy and society.
I can't envision a day when unions don't represent the best path to fair and balanced dealing between companies and workers, for without union voices workers have little or no say in their future. And no worker anywhere should have to work without organizing protections, which is why Jim McNerney's and Boeing's demand that Boeing workers now agree to "a long-term no-strike clause" is so obviously unfair.
Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.