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Originally published Friday, June 10, 2011 at 2:14 PM

Settlement talks in Boeing's NLRB case go nowhere

Early settlement talks between Boeing and its Machinist union over the National Labor Relations Board (NLRB) case against the company have drawn a blank ahead of the first hearing in the case Tuesday.

Seattle Times aerospace reporter

quotes Damn unions anyway. Boeing should be able to site a plant wherever they feel is best f... Read more
quotes Perfect example of a politically motivated NLRB meddling in the affairs of a private... Read more
quotes Who is running Boeing? NOT THEIR UNIONS. It is disgusting that the tied-to-Big Labor ... Read more

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Early settlement talks between Boeing and its Machinist union over the National Labor Relations Board (NLRB) case against the company have drawn a blank ahead of the first hearing in the case Tuesday.

Jim Albaugh, chief executive of Boeing Commercial Airplanes, said in an interview Thursday that a settlement looks unlikely.

"If there was a way we could come to a settlement and get this off the table, that would be great," said Albaugh. "Do I think we are going to be able to arbitrate a settlement? My guess is, probably not."

"We've got a lot at stake here," he added. "Let's let this get decided in a court."

The NLRB complaint says that when Boeing chose in 2009 to place a second assembly line for the 787 Dreamliner in North Charleston, S.C., rather than Everett, it was illegally retaliating against the Machinists union for previous strikes.

As a remedy, the April 20 complaint seeks to shift the second 787 assembly line's production from South Carolina to Washington state.

A lengthy hearing process before an NLRB administrative law judge begins next week at the federal courthouse in Seattle.

Boeing said Thursday that late last month it rejected a proposal by the International Association of Machinists (IAM) to drop the case in exchange for guarantees of future work, including a commitment by the company to place its next new jet program and related supply work in the Puget Sound region.

"We've kept an open line for reasonable settlement options all along the way," Boeing's statement said. "However, the IAM's proposal last month went well beyond what we would consider reasonable."

The company did not produce a counterproposal and no further talks between the two sides are planned, said Boeing spokesman Tim Neale.

Boeing held a ribbon-cutting in Charleston on Friday to officially open its Charleston plant.

Dozens of managers from Boeing's Puget Sound factories already have moved to Charleston to lead production there. Hourly workers have been hired and are being trained. Final assembly work on the first airplanes is set to begin in August.

The NLRB charge, threatening to undermine the grand plan for Boeing Charleston, has generated a hot political debate that pits South Carolina against Washington state and Republicans against Democrats.

CEO Albaugh said his problem is with the NLRB rather than the union.

"I'm not at all upset with the union about the fact that they brought this issue up. Certainly it's their right to do that and unions bring these issues up often," Albaugh said in the interview. "My disappointment is with the NLRB. In our view, the ruling they made is contrary to law and contrary to precedent."

IAM spokeswoman Connie Kelliher said Boeing management is not negotiating seriously. "Every time we've offered to meet, Boeing has said no," Kelliher said.

"Boeing is the one that broke the law, so they should be making an offer," she added. "You can't negotiate by yourself."

One option that could be part of a settlement is for Boeing to make permanent the extra 787 assembly line in Everett.

This temporary "surge line" is under construction inside the Everett factory. Boeing plans to begin operating it next year and continue until the South Carolina facility gets up to speed.

Kelliher declined to detail any specific union proposals. However, a person close to the union's internal discussions and familiar with the interactions between the two sides, speaking on condition of anonymity, confirmed Boeing's assertion the union proposed the company locate a new plant somewhere in Western Washington for assembly of a future airplane.

Boeing spokesman Neale said such a proposal to guarantee future work isn't realistic.

"That's a big ask. It would really tie management's hands," Neale said.

He said even making the surge line permanent "requires a significant investment on our part in Everett, which duplicates investment already made in South Carolina."

Making that assembly line permanent would entail raising production of Dreamliners in Everett to 10 per month, the production rate Boeing has committed to reach by the end of 2013 from both factories.

To keep the Charleston factory operating as well, Boeing would have to raise its planned maximum production rate.

Boeing may be reluctant to offer any settlement if it involves a de facto acceptance the NLRB has a right to dictate where it can locate future work.

CEO Albaugh said Thursday he must also consider the potential impact of this standoff on next year's regular contract negotiations with the IAM.

"I don't like the idea that this is going to be hanging over our head during the contract negotiations. I don't think that's a positive thing for anybody," Albaugh said. "I'll let the attorneys worry about getting the NLRB thing worked. I hope it won't be on the table when we are talking in 2012."

The NLRB hearing in Seattle could go on as long as six weeks. Albaugh said businesses across the U.S. will be watching carefully for the final outcome of the case.

"This is a new interpretation (of labor law) the NLRB has given us," Albaugh said. "People will want to understand it before they make decisions on where they put work."

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

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