Understanding Government

Chicago's McCormick Place

Even as both private and public sector unions lose power, labor is a powerful force in Chicago. But Illinois politicians — even Democrats who get union contributions — argue that AFL-CIO unions like the carpenters and the teamsters keep the city from seeing millions, maybe billions, of revenue at the McCormick Place convention center. But, like the dispute between Chicago-based Boeing and the machinist union, federal law has so far sided with labor.
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The Washington Post’s Michael Fletcher and Jia Lynn Yang have a good piece on the politics of the National Labor Relations Board’s lawsuit against Boeing for moving an assembly plant from Washington state to South Carolina. The suit contends that Boeing moved the plant as to not have to deal with unionized workers — South Carolina is a so-called right to work state.

There’s a Chicago angle here, as Boeing is headquartered in the Windy City and Boeing Chief Executive Jim McNerny is head of President Obama’s Export Council. Chicago, on the other hand, is one of the strongest union cities in the country, so it bears watching how local officials here react as anti-labor accusations against one of the city’s largest companies move forward.

It looks like we can finally stick a fork in the nine-year battle between Boeing and EADS for a defense contract to build midair refueling tankers. Boeing won the contract 10 days ago and Paul Merrion of Crain’s Chicago Business reports that EADS won’t challenge the victory.

The last two times the Pentagon awarded the midair refueling tanker contract the losing party, successfully, challenged the decision. So why is EADS backing off? Probably because Boeing submitted a $31.5 billion bid a healthy 11 percent cheaper than the final offer from EADS.

midair refueling tanker

In the latest twist in a ten-year controversy over a $35 billion defense contract for midair refueling tankers, seven U.S. senators want Pentagon Inspector General Gordon Heddell to investigate whether the Air Force has given European Aeronautic Defense and Space Co., or EADS, an unfair advantage over Boeing. Boeing is based in Chicago and so it is no surprise that one of the seven lawmakers is Illinois senior Senator Dick Durbin, a Democrat. Also calling for an investigation are Patty Murray, a Democrat from Washington, and Jerry Moran, Republican from Kansas: both these states have large Boeing operations that employ thousands.

Unclear, though, is what exactly these senators want “investigated.” (more…)

In what the Obama administration has billed as a cost-cutting move, Chicago-based Boeing has inked a four-year, $5.3 billion deal with the Defense Dept. to make 124 fighter jets and electronic attack planes. Reuters reports that both the Pentagon and Boeing claim that the contract will generate more than $600 million in savings because it lets Boeing and its subcontractors “buy materials in bulk, making production more efficient than under a single year contract.” It is also a fixed-price contract, meaning Boeing cannot get more taxpayer money if the company says that the project is more expensive than anticipated. (more…)