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United Tech. Exec: Boeing Will Win Labor Dispute

Thu, 06/16/2011 - 9:37am
Stephen Singer, AP Business Writer

HARTFORD, Conn. (AP) — The chief financial officer of United Technologies Corp. said Thursday that Boeing Co. will ultimately prevail in its battle with the National Labor Relations Board over the plane-maker's decision to build a non-union production line in South Carolina.

At an investor analyst conference, Chief Financial Officer Greg Hayes said unions and their political allies are on the losing side of the argument.

Boeing made a "pretty smart management judgment" to establish two plants to deal with capacity problems "and it's hard for me to imagine that the courts would ultimately force them to move all their production to one facility."

He was responding to an analyst who asked if the NLRB's accusation that Boeing retaliated against Washington state union workers by building an assembly plant in South Carolina, a right-to-work state, had implications for the Hartford, Conn.-based manufacturer.

United Technologies, which is parent company of jet engine maker Pratt & Whitney, aerospace componentsmanufacturer Hamilton Sundstrand and other aerospace and building products businesses, had its own troubles with the Machinists union last year as it fought for the right to shut two engine repair plants in Connecticut and move work to Georgia and Asia. It eventually negotiated the shutdown of the plants in a labor contract after included generous retirement and other benefits.

"Everybody has had challenges in terms of labor relations, and UTC is not immune from that," Hayes said.

Boeing and the Machinists union will, like United Technologies, reach a negotiated settlement, he said.

"But the fact is the unions can slow down this process of moving from high-cost to low-cost, but they're not going to stop it and I think again people have to realize that this is the way the world is moving," Hayes said. "We're continuing to press on moving to eastern Europe and Asia for low-cost sourcing not just for labor savings but also because that's where the markets are growing fastest and you have to be close to your customers."

United Technologies continues to reduce manufacturing at high-cost sites, but more than half of itsmanufacturing locations remain in high-cost locations "so there are still opportunities on the manufacturing side to move to low-cost," he said.

"Will we move out of other high-cost manufacturing locations? Absolutely over time. You'll continue to see that evolution. It's never done," Hayes said.

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