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Hillary Clinton Joins IAM Fight to Prevent Boeing from Bringing Low-Wage Norwegian Air to the U.S.

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Boeing is claiming that International Association of Machinists and Aerospace Workers (IAM) opposition to the expansion of Norwegian Air International is hurting its own members.  The union, however, is unwavering in its opposition to bringing the low-cost airline to the United States.

The situation is playing out in the press as unions, pro-worker groups, and even presidential candidates are calling on Congress to block the expansion of Norwegian Air, which wants to offer transatlantic flights for under $500. The hangup for the union is that the company established its headquarters in Ireland in order to dodge taxes.  Norwegian Air is Norwegian in name only, IAM says, and would use Asian labor to keep costs low and undercut more union friendly airlines.  

In Boeing’s eyes it’s simply a matter of being driven by the bottom line: Norwegian Air buys Boeing’s 787 Dreamliner at $225 million a pop.  The aircraft are built in “Right-to-Work” South Carolina, where workers earn far less than their counterparts in union-friendly Washington state.  

In a statement released on the company’s website, company spokesman Bill McSherry said:

“It’s disappointing that IAM leadership and congressional members are hurting a key customer and undermining Boeing jobs.  By falling into the D.C. political-game trap, they are putting customers’ success and jobs on the line, and all employees ought to be concerned.”

In April, though, IAM General Vice President Sito Pantoja addressed the situation head-on:

“Any airline that registers its aircraft in foreign countries with lax safety and security standards and ‘rents’ its cabin crews from countries with no labor laws to lower costs shouldn’t be welcome in the United States.  Make no mistake: NAI’s scheme to gain entry into the U.S. aviation market will unleash downward pressure on the wages, benefits, and working conditions of airline workers here in the United States and cause airline workers to lose their jobs. That is unacceptable.”

The situation has led to many unions and labor groups proclaiming solidarity with their IAM brothers and sisters.  Included in this group is the AFL-CIO, whose president Richard Trumka said:

“The IAM and the entire labor movement is opposing Norwegian Air International’s (NAI) entry into the U.S. market because the airline’s application for a permit before the U.S. Department of Transportation violates our air services trade agreement with the European Union (EU). By headquartering NAI in Ireland instead of Norway, the company is attempting to avoid strong labor laws and current collective bargaining obligations in its home country. NAI’s operating plan centers on hiring Asian flight crews under Singaporean or Thai employment contracts. The fact that this scheme will undermine labor standards and collective bargaining rights in violation of Article 17 bis of the U.S.-EU Air Transport Agreement is the basis for our opposition to the company’s application.

If NAI’s application is approved, the carrier will gain an unfair competitive advantage over airlines that play by the rules – most of which are significant and longstanding Boeing customers. NAI’s parent company, Norwegian Air Shuttle, already flies to the U.S., using Boeing aircraft, and can continue to do so and expand flights under its existing operating authority. NAI’s application has absolutely nothing to do with buying more Boeing airplanes but has everything to do with setting up a corporate shell to eviscerate labor standards, undercut fair competition and destroy middle-class U.S. airline jobs.”

IAM has gained support from presumed Democratic presidential nominee Hillary Clinton, who has urged the Obama administration and the Department of Transportation to reject Norwegian Air’s request to come stateside.  Clinton’s Labor Director Nikki Budzinksi issued a statement on the candidate’s behalf:

“Workers in the U.S. airline industry deserve rules of the road that support a strong workforce with high labor standards not attempts by airlines to flout labor standards and outsource good-paying jobs .That’s why our Open Skies Agreement with Europe explicitly calls for the maintenance of high labor standards to guide the parties in its implementation. Hillary Clinton urges the Obama Administration against moving forward with final approval of Norwegian Air International’s application. Too many questions have been raised about NAI’s practices and plans.”

Opponents of the expansion plan argue that it would violate the 2010 U.S.-European Union Open Skies Agreement, which specifically forbids airlines from undermining labor standards in a member country. Among the plan’s biggest detractors is Transportation Trades Department President Ed Wytkind, who called NAI’s scheme “the biggest fairy tale I’ve heard in my life”:

They want to create a subsidiary that’s going to hire short-term employees in Asia and cover them under individual employment contracts.  Never mind the fact that they are trampling on the rights of their own employees in Norway.”

A bipartisan plan to block the expansion of Norwegian Air is currently being lead by U.S. Reps. Frank LoBiondo (R-NJ), Peter DeFazio (D-OR), Lynn Westmoreland (R-GA), and Rick Larsen (D-WA). Together, the group has sponsored H.R. 5090, which will reverse the DOT’s decision to potentially grant NAI access to U.S. skies.  

In a press release announcing the resolution, cosponsor Peter DeFazio said of the airline:

“Consumers may purchase tickets on and they may board planes marked Norwegian in big bold letters, but this airline is ‘Norwegian’ in name only. The DOT record shows that Norwegian Air International is headquartered in Ireland and employs contract crews based in Thailand to circumvent Norway’s fair and strong labor standards. It’s a virtual airline set up to undercut competition by exploiting cheap labor. Our bipartisan legislation sends a strong message to DOT—we must stop this race to the bottom, and protect the open and fair transatlantic aviation market.”


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