Changing the Bargaining Power Equation In the fall of 2008 the International Association of Machinists and Aerospace Workers struck the Boeing Company for 57 days.

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Case study #1:

Changing the Bargaining Power Equation In the fall of 2008 the International Association of Machinists and Aerospace Workers struck the Boeing Company for 57 days. The strike was the union’s fourth strike within a 20-year period. Both the company and the union indicated that the primary issue was the company’s outsourcing of work. The company stated it would offer no job guarantees and would not agree to any restrictions on its ability to continue to outsource work. The union indicated that it wanted at least the chance to bid against outside vendors on all work set to be off-loaded. The strike ended when the union gained a contract provision that provided the opportunity for the union to bid against outside vendors and the company retained the right to choose which vendor would have the right to do the work. Boeing indicated that the strike convinced the company that it needed to find production sites for its operations other than the Seattle area of Washington State in the future—particularly as it progressed with work on its “Dreamliner” project. In the middle of 2009, Boeing found itself two years behind schedule on the 787 Dreamliner project and began looking for another production site in the southern United States where unions were allegedly weaker than those at its production facility in Everett, WA. The union considers the company’s consideration of another production facility to be a direct threat to its historic bargaining power regardless of whether the production facility is built in the South or in another country. The union has continued to oppose the company’s plan to consider other geographic areas for production particularly since Boeing has been gradually moving some of its operations from the Seattle area for a number of years. Boeing’s defense operations are located in the St. Louis area, and in 2001, Boeing moved its headquarters to Chicago. Additionally, the city of Seattle and the state of Washington have expressed concern since Boeing in 2009 employed approximately 74,000 persons in the Washington State. The Boeing Company’s planning as to where it will located production and office facilities is symptomatic of considerations by many companies as to where they will choose to locate their operations in the world economy of the 2000s and beyond. Although the unions representing employees in a given location are of course immediately concerned for the workers they represent, the challenge indirectly concerns the very existence of individual unions and geographic area of the country. Questions for Consideration 1. Is the geographic location of a private-sector company’s operations a mandatory subject of bargaining under the definitions of good faith bargaining by the NLRB? Should it be? 2. If a company determines to establish a production/ operating facility in another geographic area of the United States, should the employees hired in the new location be included in the bargaining unit in the existing location? (Give your answer on the basis of (a) the new employees in the new location perform essentially the same work as the employees in the existing unionized location and (b) they perform entirely different tasks.) 3. Is the process of establishing more production/operating facilities in different geographic areas a way for a company to diminish a union’s bargaining power? Is the threat by a company to so do a beneficial strategy for an employer? 4. What are the strategies a union should/can adopt to persuade a company from establishing new geographic area of operation in the United States? Outside the United States

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