Free Markets, Free People

Chicago lawyer amazingly claims Boeing’s move to South will net workers with "poor skills"

Honest to goodness, if this doesn’t blow your mind, I don’t know what will.

Yet the Boeing case has a scarier aspect missed by conservatives: Why is Boeing, one of our few real global champions in beefing up exports, moving work on the Dreamliner from a high-skill work force ($28 an hour on average) to a much lower-wage work force ($14 an hour starting wage)? Nothing could be a bigger threat to the economic security of this country.

We should be aghast that Boeing is sending a big fat market signal that it wants a less-skilled, lower-quality work force. This country is in a debt crisis because we buy abroad much more than we sell. Alas, because of this trade deficit, foreign creditors have the country in their clutches. That’s not because of our labor costs—in that respect, we can undersell most of our high-wage, unionized rivals like Germany. It’s because we have too many poorly educated and low-skilled workers that are simply unable to compete.

We depend on Boeing to out-compete Airbus, its European rival. But when major firms move South, it is usually a harbinger of quality decline.

Wow … really?  So all those F-35s being built in Ft. Worth, and all those C-130s and F-22 Raptors being built in Marietta, GA, not to mention the myriad of car manufacturing plants, specialty steel plants, hi-tech industries, etc. all have seen ‘quality declines’ because they’re located in the South?

Good grief, my guess is this guy hasn’t been out of Chicago since 1970?  You’ve got to love the correlation he tries to draw between “high-skill” and $28 bucks an hour with “low-skill” and $14 bucks an hour.  Yeah, that works, doesn’t it?   It’s a bit like saying a guy who opens and closes a blast furnace door at $28 bucks an hour is a “high-skilled” worker.   Doesn’t correlate at all does it?  But that was an actual wage for an actual job at a steel plant before it went out of business because it was uncompetitive, thanks to unions, years ago.

If you haven’t figured it out yet, the guy writing this is a labor union lawyer and he thinks everyone who reads the Wall Street Journal is an idiot.

Here’s his one and only example of why he thinks he’s got this all figured out.  As he says, he “represented the workers” in the first plant.  He’s speaking of Outboard Marine Corp:

In the 1990s the company went from the high wage union North to the low wage South and was bankrupt by 2000. There are reasons workers in the North get $28 an hour while down in the South they get $14 or even $10. Adam Smith could explain it: "productivity," "skill level," "quality."

Of course the reason it went bankrupt might have absolutely nothing to do with any of that.  It might be because the corporation was uncompetitive well before the move and the move was a last ditch effort to save itself.  But we don’t know, and this yahoo decides it is “productivity”, “skill level” and “quality” which were the problem.  Of course BMW’s plant in SC doesn’t suffer from any of those problems does it?  In fact one of the reasons the Germans are making their cars there is because of the productivity they achieve there.  Same with all the car plants across the south to include those opened fairly recently by Honda, Kia, Hyundai, BMW, and Mercedes – in Tuscaloosa, Alabama for heaven sake.  The reason they’re in the South is they get more “productivity”, “skill” and “quality” for the wage than they do in the North.

But to admit that would be to admit that perhaps the problem is unions, not Southerners.

However, our clueless lawyer isn’t done:

Here is yet another American firm seeking to ruin its reputation for quality. Why? To save $14 an hour! Seriously: Is that going to help sell the Dreamliner? In terms of the finished product, the labor cost is minuscule: $14 in hourly wage, at most. It’s incredible that conservatives claim such small differences in labor cost would be life or death to Boeing. It’s not labor cost but labor skill that is life or death to the survival of Boeing, never mind pilots and passengers.

If the history of runaway shops proves anything, it’s that many go "South" in more than one sense of the word. If that sounds unfair to the South, it is union busting that has inflicted the real unfairness in the region: income inequality and inferior schools.

Yessiree – those airplanes they’ve been building in Marietta GA and Ft. Worth TX have just been falling out of the sky because of all that income inequality and those inferior schools.  What, no “redneck”, “hillbilly” or “barely in shoes” included?  No NASCAR jokes?  Remarks about family trees that don’t fork? Dueling banjoes?  He missed his chance, didn’t he? 

Of course the reason Boeing is opening a plant in SC has nothing to do with wages per se.  His point is correct as far as it goes.  The plant is opening so Boeing and its customers aren’t held hostage to the work stoppages that are normal fare in the union plant in Washington.  And it is hard to blame them for doing that, isn’t it?

Of course pig-headed ignorance about an area like this simply has to be seen to be believed and he proves himself as the poster boy for that.  If abject and unqualified ignorance is bliss, this is one happy, happy labor lawyer.

Wow … 2011 and you find something like this in the Wall Street Journal.  Who said their editors don’t have a wicked sense of humor?

Give ‘em enough rope …

[HT: J.E. Dyer]


Twitter: @McQandO


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33 Responses to Chicago lawyer amazingly claims Boeing’s move to South will net workers with "poor skills"

  • “In the 1990s the company went from the high wage union North to the low wage South and was bankrupt by 2000. There are reasons workers in the North get $28 an hour while down in the South they get $14 or even $10. Adam Smith could explain it: “productivity,” “skill level,” “quality.””
    I wonder if Genius Esquire would care to comment on Detroit being moved south of the Mason Dixon line, as it must apparently have been.
    Yankee buttwipe.  Sorry, that was wrong of me…..
    arrogant Yankee buttwipe.

  • My wife’s BMW X5 was built in South Carolina.  It’s certainly a better vehicle than any SUV coming out of GM.

  • From wiki:

     In March 1998 OMC laid off 200 employees after earlier laying off 348.[7] In September 1998 OMC announced the closure of their Milwaukee, Wisconsin and Waukegan, IL plants over the next two years.[8] OMC released the 1997 FICHT fuel injected motor in 1996 to meet stiffer EPA guidelines. This motor used Gasoline Direct Injection developed by Ficht GmbH Germany. This motor had problems due to the transition phase of operation being exactly at the same trolling speed of many fishermen and had problems early on and some outboard motor industry insiders have speculated the rush to meet EPA standards helped with the undoing of OMC. Their previous engines were known to be reliable in most applications, and have been popular with fisherman and boaters for many years. They dominated the race scene in the 1970s and even held many records. Mercury and OMC competed fiercely. Since then, Mercury has stood alone in the race scene. OMC was innovative and even raced an experimental rotary engine built in a joint effort with Wankel. Business and quality issues took its toll on the company and they were forced to file for bankruptcy.[1]

    • Point is, it looks like the company was having problems aside from lower quality southern workers. But somehow I doubt the higher paid yankees were any better.

      Aside from that, shouldn’t we let the market decide? If moving south is a bad idea the market will make the necessary correction. No lawyers or government required.

  • Off topic:

    Bruce or Dale, are ya gonna cover “Fast and Furious”, i.e., the Obama administration gunrunning scandal?

    Here is a detailed look at it:

  • Before the F-35 and F-22, the “Bomber Plant,” as it’s called, in Fort Worth produced the F-16, FB-111 (poor design, not workers with sloping foreheads, made the Aardvark a turkey), the B-58, the B-36, and the B-24.

    • The bummer plant is in Georgia.

    • The 22 is/was built back east – in the South, in Georgia.   Fort Worth is doing the F-35 and other cool stuff.

      • The Fort Worth plant is working on one section of the Raptor — I believe it’s the mid-fuselage.
        Georgia may have its “bummer plant” — I resist the urge to make a joke — but I assure you that the industrial complex across the runway from NAS Fort Worth, formerly Carswell AFB, has long been known in Tarrant County as the “Bomber Plant.”

  • Actually, one wonders what the total labor cost of assembling a Dreamliner actually is. (Boeing is not immediately forthcoming on a simple web search, sadly.)
    I bet it’s not at all minuscule – because if it was, the total amount of labor used would be pretty small, and thus there’d be nothing to complain about to speak of.
    They’re producing two 787s a month now, from all I can tell, using around 1000 people to assemble them.
    If we assume 40 hour weeks, that’s 80,000 man-hours per plane. That’s $2 1/4 million per plane at $28/hour. Problem is, $28/hr isn’t $28/hr once you factor in benefits and SS contribution matching. I’d expect the real cost per employee per hour is more like $40 (or more!).
    $40 per hour ends up at $3.4M/plane – and that’s a lot like real money. (Even then, of course, it’s like 1.5% of the total sale cost of the plane, but then it’s not like a giant Next Generation Jetliner is cheap – and there’s all that expensive skilled labor in all the subsystems!)

    • Building an airliner isn’t all that difficult.  It’s a big wheeled cylinder filled with seats attached to wings, a tail section, engine mounts and a cockpit.  All the avionics, engines and hydraulics are shipped in and installed as a plumber would a sink.

  • (Note that the math above was just on assembly, eg. at the Everett plant. As noted in the last sentence, all the subsystems need labor, and Boeing makes some of them themselves.
    Oddly, they seem to like making them in places that aren’t Washington, with Seattle-area wages, like Salt Lake City.)

  • Of course the reason it went bankrupt might have absolutely nothing to do with any of that.

    Most likely it failed due to the tariffs on boats put in place in the early (?) 90’s that virtually destroyed the pleasure boat industry.
    The only thing more destructive than union thugs is congressional thugs on the Ways and Means Committee.

  • Funny how it’s perfectly fine to discriminate against Southerners.  I also wonder how many black workers will be employed in SC vs. lilly-white Everett?

    BTW, I toured the Everett plant when visiting friends in Seattle last autumn (wonderful city, BTW).  Dreamliner delivery was behind schedule in large part because Rolls-Royce was having trouble delivering the engines.  Does Rolls-Royce employ low-skill, sloping-forehead, inbred, NASCAR-watching, bitter-Bible-and-gun-clinging Southerners, too?


  • Dyer on HotAir did a great job of fisking this idiot.  Turns out that us swamp-dwelling knuckle-draggers make VERY comparable wages to the union thugs in the glorious North West.
    Texas has DOZENS of aerospace firms in Houston, and MORE in Dallas.

  • No, those F-22’s built in Marietta aren’t falling out of the sky, because the entire fleet was grounded:

    “In February 2010 the entire fleet was grounded due to rusting ejection seat rods. In its 2012 budget request the USAF cut F-22 flight training hours by one-third to reduce the operating costs of flying the aircraft.
    In May 2011 the entire fleet was grounded due to failures of oxygen delivery systems. The F-22 was first restricted to flying below 25,000 feet while the Honeywell oxygen generating system was investigated following the November 2010 crash near Elmendorf Air Force Base, Alaska. After five incidents reported by pilots suffering from hypoxia and decompression in April 2011, Air Combat Command commander General William M. Fraser III grounded the F-22 fleet indefinitely on 3 May 2011. In June 2011 the investigation broadened to cover other life support equipment.”

    Another irony of cheap Southern labor occurred when Toyota chose to build an $800 million auto plant in Ontario Canada
    forgoing massive subsidies offered by Southern states because they would lose any financial gain because of the ignorance of the workforce in the Southern United States.

    “The factory will cost $800 million to build, with the federal and provincial governments kicking in $125 million of that to help cover research, training and infrastructure costs.

    Several U.S. states were reportedly prepared to offer more than double that amount of subsidy. But Fedchun said much of that extra money would have been eaten away by higher training costs than are necessary for the Woodstock project.

    He said Nissan and Honda have encountered difficulties getting new plants up to full production in recent years in Mississippi and Alabama due to an untrained – and often illiterate – workforce. In Alabama, trainers had to use “pictorials” to teach some illiterate workers how to use high-tech plant equipment.

    “The educational level and the skill level of the people down there is so much lower than it is in Ontario,” Fedchun said.

    In addition to lower training costs, Canadian workers are also $4 to $5 cheaper to employ partly thanks to the taxpayer-funded health-care system in Canada, said federal Industry Minister David Emmerson.”

    You get what you pay for, and in the case of workers from the cheap South, you get the workers you would expect from states that take 10 of the bottom 12 positions for high school completion.

    Southerners have many things to be proud of, but literacy, relative to the rest of the country, is not one of them.

    • Wow raptor – and this failure of the Honeywell oxygen system – the fault of Southern workers?
      No, try Yeovil, Somerset, United Kingdom – Let me get my google earth going to see if Somerset is in Southern England.
      “Developed in the 1980’s at it’s facility in Yeovil, Somerset, Honeywell’s OBOGS technology allows an aircraft to generate its own oxygen from a conditioned air supply during flight, giving significant advantages in reliability, safety and performance over older gaseous and liquid oxygen systems. OBOGS takes advantage of a molecular sieve material, Zeolite, which traps nitrogen molecules when air is passed through it, allowing it to act as a molecular sieve.”
      F22 – Crash report – ultimately determined to be caused by a fault in the RSA’s – manufactured by BAE – in ?
      Ejection seat rods rusting – due to poorly DESIGNED drainage in the cockpit – F22 designed….where?
      “on August 29, 1990, the YF-22 rolled out of a hangar at Lockheed’s Palmdale, California plant.”
      (actually that’s unfair to Palmdale, considering that Boeing, LM and General Dynamics were involved, I doubt it was really developed in just one place…but since you’re playing around with loose facts, I might as well too…).
      Do you REALLY think it’s a result of stupid workers in Georgia?  Really?  My my, you live in simple world.  Do you think that will be the result of the government inquiry from the latest grounding?
      “Stupid plant workers in Georgia” the finding will read..
      Hey, so, why was it that Nissan and Honda didn’t build plants up NORTH Raptor?  They went south, and to Canada.
      Can you explain to us why the gardens of enlightenment and education of the north weren’t chosen for these plants?
      Not enough workers?  Out of space for a plant?  What was the reason?
      And then health care?  You toss in the free shot on health care as if that has anything to do with the discussion?
      Another point, you know that it’s not just ‘southerners’ who live in the south these days, right?
      Yeah, go figure.

      • lookerAnother point, you know that it’s not just ‘southerners’ who live in the south these days, right?

        Boy, if that ain’t the truth!  We refer to Cary, NC as “Containment Area for Relocated Yankees”.  They “relocate” there because of all the high-tech businesses that moved into the Raleigh-Durham-Chapel Hill area, attracted by lower tax rates, cheaper cost of living, and a workforce that is (shall we say?) less enthusiastic about the joys of unionization.

        Unfortunately, some of these people escape the north with its high tax rates, intrusive government, and expansive, expensive welfare state only to want to recreate the same damned thing here.  Here’s a thought: if things were so wonderful in Brooklyn or Newark or Philly, THEN GO BACK THERE.

        • Amen – I don’t mind people coming south, I mind when they bring whatever they came from with them (that applies to people who wander NORTH from south of me as well so long as they do it legally).

          Get the sense I may have been born a Yankee, but I ‘ain’t a Yankee in spirit’?  I’ve gone native I’m afraid.

    • Right!!!! Toyota Canada
      You getting your facts from here? (must be, because the links to the original are dead…)
      Two can play this game, and ya know what it proves?
      Not much.

    • I’m sorry: you are citing a GM (aka Obama Motors) bulletin board about problems that Japanese companies have allegedly had with their stupid Southern workforce???

      QUICK!  Tell BMW so they can move their So. Carolina* plant to someplace where the peepul is edukatid, like Detroit (aka Lebanon on the Lake).  Ditto Toyota, which operates five major assembly plants in AL, KY, IN, TX and WV and is starting operations this summer in MS.  Oh, and tell Honda to give up trying to build the business jets that they plan to manufacture not too far from here in Greensboro, NC.

      Speaking of my state, I suppose that you might want to stop taking medications, because us ignert nOrth Kaorlinuh peeple mak a lot uv thim, especially around Raleigh-Durham-Chapel Hill-Cary.  You know: where three of the best universities in the country (UNC, NC State, Duke) are located?  Perhaps you should also bury your money in a can in your backyard rather than bank it, because we dumb Southerners (specifically in Atlanta and Charlotte) do quite a lot of banking these days… and we don’t have to go barefooted to do the math if you want to deal with more than $10 at a time.



      (*) BMW apparently plans to EXPAND the Spartanburg plant, making it the largest car factory in the US by number of employees.

    • How about some ‘facts’ maybe instead of standard arrogant Northern/Eastcoast/Westcoast “everyone but us is stooopid”

      Literacy – a study done by a real live Yankee Kolage, so ya no, it jus has to be rite!

      Atlanta, ranked #5 in 2009, Lexington Ky – ranked #15, Austing Tx, ranked 16, New Orleands, ranked 17, Nashville (those dumbass guitar pickin toothless idiots), ranked #18, Raleigh, ranked 19, Tulsa, 20, tied with Tampa, Charlotte ranked 27

      Jus pitiful….

      that would put all of them – ahead of
      Baltimore, Toledo, Detroit, Newark, Los Angeles, Long Beach, Fresno, Buffalo, Fort Wayne, NEW YORK, CHICAGO, Milwaukee, Philadelphia, Oakland.

      • It doesn’t matter what statistics you cite. The last allowable bigotry in the USA is bigotry against the South. It makes them feel better about thier high unemployment, so just let it go.

        • Yep.  Can you imagine the uproar if somebody suggested that a “Latino” or “African-American” workforce did shoddy work because they are ignorant and illiterate?

          • LEGALIZE BINGO – KEEP GRANDMA OFF THE STREET – bumper sticker in Wisconsin

        • Clinging to their guns, religion and high employment rates.

        • If you are a progressive, there are lots of allowable bigotries: Jews that support Israel, black conservatives, other conservatives, libertarians, fly over country, hunters, other gun owners, christians, fat people, smokers, … it just goes on and on.

      • Literacy – a study done by a real live Yankee Kolage, so ya no, it jus has to be rite!

        “Drawing from a variety of available data resources, the America’s Most Literate Cities study ranks the largest cities (population 250,000 and above) in the United States. This study focuses on six key indicators of literacy: newspaper circulation, number of bookstores, library resources, periodical publishing resources, educational attainment, and Internet resources.”
        Interesting that several of those at the top have abysmally poor records for their public schools (i.e.;  DC is LAST)
        I’ll have to ask my nephew  from Ringgold, GA, graduate of Georgia Tech, A-10 Warthog pilot and now at the Marshall Space Center, about that.