Monday, November 14, 2011

The Government and the Guitar Man

Gibson Guitar

Wall Street Journal Op-Ed Summary:
 1. On Aug. 24, Federal agents descended on three factories and the Nashville corporate headquarters of the Gibson Guitar Corp. Accompanied by armored SWAT teams with automatic weapons, agents from the Fish and Wildlife Service swarmed the factories.

2. At issue is not endangered wood, but technical interpretations of laws in foreign countries. Gibson says it got permits and followed foreign laws on exports of finished products, such as the prepared slats of Indian rosewood used on guitar fingerboards. The U.S. government claims the products weren't finished enough.

3.  The fact that Gibson was singled out when other guitar makers use the same woods has fed speculation that the company was targeted—because it is not unionized, perhaps, or didn't donate enough to the Democratic Party.

Opinion:
Gibson employs 1200 people.
The Gibson raid is similar to the Boeing outrage: Seattle-based Boeing was far behind in schedule in building their new Dreamliner jets. They had over 800 Dreamliners on order and were 3 years behind schedule. Instead of moving offshore, as many companies do, they built a $750 million non-union assembly plant in North Charleston, SC. The Dreamliners will be built by their unionized labor force in Puget Sound as well. Between the two plants, the company hoped to build 10 Dreamliners a month.

The NLRB then filed a complaint against Boeing, accusing them of opening the SC plant to retaliate against the union. The NLRB's solution was to move all the production back to Puget Sound, thereby leaving about 5,000 workers in SC with nothing to do.

Since when does a government agency tell a company where it can make its products? President Obama said that the NLRB is an independent agency and that his hands were tied. That's true, but most of its top executives are his appointees.

Unless you are a union shop, the government is going to find a way to shut you down. Political payback at its worst.