Or a distribution center or other major-emplyment investment. If you are already an employer without a union, especially one whose retirement plan is defined-contribution (IRA/401K/etc.) you may be able to ignore this issue.
Basically, Boeing had to settle with its Washington-state based unions on unfavorable terms for having committed the error of building a new plant in South Carolina (non-union state). The NLRB is intrinsically by its very nature pro-union.
Whether this is good or bad is another story. This is not a Democrat versus Republican issue – the NLRB has been around since the 1930s through periods when both parties dominated the government.However, it is clearly a very significant cost of doing business. It is not going away.
If you want to build a plant, distribution center, call center, such where you will hire a lot of staff, you might want to insulate yourself from the NLRB and its underlying union support.
Outside the USA Choice
The obvious answer is to put your plant outside the USA. To no great surprise, there is a long history of this. The obvious case study is the maquiladoras (assembly plants) in Mexico. Remember Presidential candidate Ross Perot and “the sucking sound of jobs going south”? China, Thailand, Taiwan, Vietnam, Colombia, Central America and so forth all participate in this rubric.
Inside the USA
If for perfectly good business reasons, you need to build a plant, etc. inside the USA, logically and obviously you would build it some place where you do not face the costs of powerful unions. The “New South” has benefitted hugely from this.
Wages in the South have nearly caught up with those in the now rust-belt states. When I was in high school, lured by dreams of big bucks, a busload of us happily went north to Massachusetts to pick tobacco for a summer. I know low wage or no wage. Back then the wave of companies in the southern USA paying good (by our standards) wages had begun, but not yet crescendoed. That came later under the New South governors and legislatures rolling out the welcome carpet to companies seeking hardworking, grateful employees in a business-friendly environment.
After, the Boeing example, one might wish to ensure that any new factories are built by wholly separate companies from any existing company (legally) in a union state.
Poor Boeing
After, the public lambasting of Boeing you need to build a plant inside the USA, do you build in the rust-belt? Of course not. Learn from Boeing, and hire some top-flight expertise on the NLRB.
Business, both foreign and domestic, can not fail to have learned the lesson. Utah and Idaho will gratefully attract companies wanting to be close to a base in Washington state; Likewise, Arizona will be happy to help out a company that needs to be close to but not inside California. Indiana faces rich pickings from its neighbors. Virginia and southern states with excellent transportation links to the northeast and midwest – oh joy. Get that welcome mat out!
From an investor standpoint, it is a negative tick-box if you are a stockholder and the company builds new plants in the rust-belt, says the Curmudgeon. He holds long-term – he sells a stock on this kind of news.
