This story illustrates how far some companies are willing to go to preserve their bottom lines and assert their right to operate in an unfettered manner, even when that includes breaking the law and violating contracts.
Huffington Post, via its daily political newsletter Huffington Post Hill, does some additional reporting on the very peculiar case of the battle between Esterline Technologies, its unions, and now the town of Taunton, Mass.
Esterline is in the process of shuttering its Taunton manufacturing operation, Haskon Aerospace, which specialized silicone-rubber seals and gaskets for military planes and the airline industry. Even though the company has always been profitable, Esterline is moving production to non-union operations in Mexico and California.
Here’s where it gets ugly. Esterline had given the union, the United Electrical, Radio and Machine Workers union, the right of first refusal to buy the facility and operate it itself. But the company decided to renege on the deal when the union had to insist that the company obey Massachusetts law and pay for three months of medical care after employees were let go. Esterline started dealing in bad faith, and said it would cut the already-agreed-upon severance package by $143,000. That’s not kosher; it’s called “regressive bargaining” and the unions have filed charges with the National Labor Relations Board.
Esterline has now turned punitive. Its latest position is that it needs to compensate for these additional severance costs (since when is complying with the law an add on?) and has scheduled an auction for the plant’s equipment. The union went to the Taunton town council and have secured a preliminary commitment for it to use its eminent domain powers under the Fifth Amendment, which permits governments to take control of private property for public purpose (the council is waiting for the results of a legal analysis before it takes a formal vote). Huffington Post reported that the town solicitor presented his preliminary findings, and the council voted unanimously to call on Esterline to postpone the auction while he completes his research.
Esterline posted nearly $120 million in profits and paid its CEO in excess of $6 million last year. This scorched-earth battle is over an operation that employs 100 people.