Airbus has announced that it will be building planes in Mobile, Alabama.
Has it really been five years since a Boeing vice president uttered those fateful words?
“It’s like being in the living room on Christmas morning, surrounded by boxes,” he said, “and you’re trying to put a tricycle together for the first time.”
The VP wasn’t reliving fond memories of his own tiny tots tumbling down the stairs to see what Santa had brought them and instead finding Dad with a wrench in one hand, a screwdriver in the other and a Bloody Mary on the coffee table.
Rather, he was predicting the disaster that would ensue if Boeing’s competitor won an Air Force contract to build billions of dollars worth of airplanes at a former military base in Mobile.
The insult stung so deeply and on so many levels that, to this day, if you say “tricycles on Christmas morning,” people throughout the region know you’re talking about the man who said Alabama residents were too dumb to work in an airplane factory.
The funny thing is that Boeing might have even wanted to build planes in Alabama. Boeing, of course, got into a lot of trouble with its union and the National Labor Review Board when they set to build planes in South Carolina. That situation was resolved after sweetening the pot with the union.
This is not quite true, but it still feels a bit truthy to say that it’s kind of funny that it takes a French company to build planes in Alabama and a Japanese company to build cars in Indiana. Which is to say, the American companies are often bound by contracts that make moving to less union-friendly states more problematic. Foreign competitors are not so inhibited. As I said, there’s more to it than that (Boeing will be making planes in South Carolina, after all). But there’s something interesting about the phenomenon nonetheless.
There is a fair amount of resentment in union states towards their non-union counterparts. There are complaints about how they’re driving wages down. They’re breaking the solidarity.
What these criticisms often miss, however, is that the willingness and ability to work cheap are among the South’s competitive advantages. The solidarity that these states are expected to uphold are based on terms that are as likely as not to leave them on the outside looking in. It’s like getting angry at illegal immigrants for not respecting our immigration law. There may be reasons not to like illegal immigrants, believe they are bad for the country, and so on… but to an extent you’re criticizing them for failing to abide by rules that are drafted to exclude them.
Union and wage rules aren’t meant expressly to exclude non-union states, of course. But it does put them at a real competitive disadvantage by stripping them of the advantage that they have. The government infrastructure in the South (among other places) is weaker, but before we say that it’s the South’s fault for it being weaker, we should recall what they are historically and presently up against. Large swaths of the region were burned to the ground while Michigan was left standing. They bet on an agricultural future when they should have bet on an industrial one. Some of this is “Yeah, their fault!” but we’re talking about the mistakes of their ancestors. Whether this is just or not, if we want these places to be able to catch up, stripping them of their price advantage is a rather poor way of doing it.
It creates a nice circular pattern: criticize the South for being behind, criticize it for being mostly full of beneficiary states, but then criticize it for how it attempts to attract industry. The common denominator here is, of course, criticism. Not that there isn’t a lot to criticize about the South, but I for one congratulate Alabama on their new contract and am happy for them.
Will, good post, but I’d like to make a correction. It doesn’t take a Japanese company to build cars in Indiana. The auto industry has long had a foothold in Indiana, although mostly parts rather than final assembly. Cummins diesel has long been headquartered in Columbus, Indiana (a huge boon to that town, as the company supports innovative architectural designs and art installations in what is otherwise a very typical small midwestern town). And GM build a huge truck factory in Fort Wayne before Subaru opened shop in Lafayette.
A lot of the reason the major manufacturers didn’t set up in the south is that southern states long kept the Jeffersonian vision of an agricultural society and devised policies that purposely promoted agriculture and prevented industrial development. That has broken down in the past few decades, but the Big 3 automakers already had established plants and suppliers, which put some limit on the viability of moving, and at the same time NAFTA was passed, which meant that if you want to move production to a low-labor cost area, you might as well skip past Alabama and go on down to Mexico.
I’m not saying existing union contracts, and the threat of union retaliation, didn’t play some role, but there’s quite a bit more than that.
Thanks for the correction on Indiana. I will bear it in mind in the future.
Yeah, the south’s clinging to agriculture is in good part responsible for how the south got behind. But now that it wants to catch up, wages and flexible labor laws are two of the big things that they have to offer. That only works, of course, if union regs allow them to work. I agree that’s not the only thing preventing it from happening.