Arrow Automotive Industries, Inc. v. National Labor Relations Board

WILKINSON, Circuit Judge:

Arrow Automotive Industries, Inc. appeals the National Labor Relations Board’s decision that Arrow was obligated to bargain with Local 1596, International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America, over Arrow’s decision to close its Hudson, Massachusetts facility and perform the work previously done at that plant in Spar-tanburg, South Carolina. Because the Board’s order contravenes controlling Supreme Court precedent, First National Maintenance Corp. v. NLRB, 452 U.S. 666, 101 S.Ct. 2573, 69 L.Ed.2d 318 (1981), we deny enforcement and hold that the company has no duty to bargain over the closing decision.

*224I.

Arrow Automotive Industries, Inc. is a Massachusetts corporation engaged in the remanufacture and distribution of automobile and truck parts. Arrow operated plants in Hudson, Massachusetts, Spartan-burg, South Carolina, Morrilton, Arkansas, and Vernon, California. Each plant engaged in the production of identical product lines, and each primarily served a market corresponding to its geographic area.

The Hudson plant had a history of unprofitable operations. The northeast market served by Hudson was declining, and sales from the plant fell over forty percent between 1976 and 1980. Labor costs at the Hudson plant were also higher than costs at Arrow’s other facilities. As a result, the Hudson plant operated at a loss from 1977 on, with the exception of 1979, culminating in a loss of $1,092,000 in 1980. During this same period, Arrow was planning to open a new facility in Santa Maria, California, to replace the small Vernon plant and tap an expanding western market.

Beginning in 1978, Arrow management considered closing the Hudson plant in order to increase Arrow’s profitability. Despite the declining market and escalating costs at the plant, Arrow President Harry Holzwasser apparently resisted the closure for sentimental reasons. Holzwasser’s father had founded the company in Massachusetts, and he felt family ties to the Hudson operation.

The union had represented the employees at the Hudson plant since 1971 and had entered into a series of collective bargaining agreements, the last of which expired on November 30, 1980. Arrow and the union entered negotiations over a new agreement in October of 1980. The parties held a total of nine meetings between October 22 and November 30. The negotiations involved a number of issues, including wages, vacations and holidays, pension benefits, and, predominantly, health insurance. The parties failed to reach agreement on a new contract, and the union called a strike at the Hudson plant on November 30. Arrow thereupon began servicing the northeast from its Spartanburg facility. The parties met twice during the strike, but' could not reach agreement despite Arrow’s indication it might hire replacement workers or consider closing the plant. On March 2, 1981, the union membership voted to reject what turned out to be Arrow’s final offer.

After the union vote, Arrow financial officer David Koontz prepared an analysis of the possible closing of Hudson. Koontz estimated that closing Hudson would increase the earnings per share of Arrow stock from $1.31 to $1.63, and concluded that the work done by the Hudson plant could be performed more efficiently at Spartanburg. During this same period, Arrow sent a telegram to the union withdrawing all of Arrow’s contract proposals and stating that Arrow was debating whether to close the Hudson plant. Arrow’s telegram requested a meeting with union representatives to discuss the closing decision.1 Representatives of Arrow and the union met on March 23, 1981. The union, after being prompted by a federal mediator, reduced some of its contract demands, but the parties did not reach agreement.

On March 25, Arrow's Board of Directors met for three hours to consider the closing decision. The directors reviewed Koontz’ conclusion that economic considerations supported the closing. Koontz told the Board that the Hudson work could be performed more efficiently in Spartanburg, and that the declining market and escalating costs at the Hudson plant meant that substantial savings would result from closure. Closure of Hudson could be expected to result in a $1.7 million increase in gross profit, an improvement of twenty-four percent. Koontz testified that he told the directors that closure of Hudson would also free substantial capital, which would be helpful in the upcoming opening of the Santa Maria plant. The minutes of the meeting, however, are ambiguous on the role of the Santa Maria plant in the decision to close Hudson. After discussion, the *225Board voted to close the Hudson plant. The parties have stipulated that the declining market and escalating production costs at Hudson led the directors to close the plant. There has been no finding that anti-union animus in any way influenced the closing decision.

Arrow informed the union by telegram on March 25 that it had decided to close the Hudson plant, and requested a meeting to bargain over the effects of the closing on the Hudson employees. On March 26, the union demanded that Arrow bargain further with it over the decision to close. Arrow declined to participate in further decision bargaining, and took the position that any further bargaining was to be restricted to the effects of the closing.2

On April 6, 1981, the union filed an unfair labor practice complaint with the National Labor Relations Board alleging that Arrow had failed to bargain over the decision to close the Hudson plant as required by section 8(a)(5) of the National Labor Relations Act, 29 U.S.C. § 158(a)(5). Following a hearing, the Administrative Law Judge held on August 16, 1982 that Arrow did have an obligation to bargain over the closure decision. The ALJ found, however, that Arrow had satisfied its duty to bargain over the closing, and dismissed the complaint. The union and the NLRB’s general counsel filed exceptions to the AU’s determination that sufficient bargaining had occurred, and Arrow filed exceptions to the AU’s holding that Arrow had a duty to bargain over the closing decision.

On June 25,1987, almost five years after the exceptions and cross-exceptions were filed, the NLRB issued its decision. The Board found that Arrow had an obligation to bargain over the decision to close because the decision “turned on labor costs,” and reversed the AU’s finding that Arrow had satisfied its bargaining obligation. Arrow Automotive, Inc., 284 NLRB No. 57 (1987). The Board thus ordered Arrow to bargain with the union over the closing decision that had been made six years earlier. The Board further ordered Arrow to pay the Hudson workers their normal wages from March 25, 1981 until Arrow and the union reached agreement over the closing or bargained to impasse, or the union failed to request bargaining or failed to bargain in good faith. Arrow appeals.

n.

The Supreme Court’s decision in First National Maintenance Corp. v. NLRB, 452 U.S. 666, 101 S.Ct. 2578, 69 L.Ed.2d 318 (1981), governs our approach to this case. In First National Maintenance, the Supreme Court construed the provisions of the National Labor Relations Act, which requires employers and unions to bargain collectively “with respect to wages, hours, and other terms and conditions of employment.” Refusal to bargain over such matters constitutes an unfair labor practice. See 29 U.S.C. §§ 158(a)(5), 158(b)(3), and 158(d). In First National Maintenance, the Supreme Court held that an employer’s partial closing decision is not a “term or condition of employment,” and is therefore not a subject of mandatory bargaining. The Board contends that it has followed First National Maintenance in holding that any management decision that discontinues employment is a subject of mandatory bargaining if the decision “turns on labor costs.” Arrow, on the other hand, argues that First National Maintenance precludes enforcement of the Board’s bargaining order. We agree with Arrow and hold that it was not required to bargain over the decision to close the Hudson plant.

In First National Maintenance the Supreme Court held that a maintenance company’s decision to terminate its service contract with one of its customers and discharge the employees who worked at that location was not a subject of mandatory bargaining. In so doing, the Court fol*226lowed an approach suggested by Justice Stewart’s Fibreboard concurrence, dividing management decisions into three groups. See Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 217-26, 85 S.Ct. 398, 406-11, 13 L.Ed.2d 233 (1964). First, some decisions, such as the choice of advertising, product type, and financing arrangements, “have only an indirect and attenuated impact on the employment relationship,” and bargaining about these decisions is not required. First National Maintenance, 452 U.S. at 676-77, 101 S.Ct. at 2579-80. Other decisions, such as the order of layoffs and recalls, production quotas, and work rules, are “almost exclusively ‘an aspect of the relationship’ between employer and employee,” and bargaining about them is mandatory. Id. at 677, 101 S.Ct. at 2580. Finally, the Court described a third type of management decision — that involved in First National Maintenance and here. Such decisions involve a “change in the scope and direction of the enterprise,” but touch on “a matter of central and pressing concern to the union and its member employees: the possibility of continued employment and the retention of the employees’ very jobs.” Id. at 677, 101 S.Ct. at 2580.

Decisions in this third group are subject under First National Maintenance to a balancing analysis. Emphasizing the “employer’s need for unencumbered decision-making” and the need for certainty as to legal requirements, the Court held that “bargaining over management decisions that have a substantial impact on the continued availability of employment should be required only if the benefit, for labor-management relations and the collective-bargaining process, outweighs the burden placed on the conduct of the business.” Id. at 679, 101 S.Ct. at 2581. The Court mentioned several factors that bear on whether bargaining should be required. Under the heading of “benefit for labor relations” are the amenability of the issue to resolution through collective bargaining, the length of the bargaining relationship that has existed between the parties, and whether effects bargaining has occurred. Under the “burden on the conduct of the business” are the magnitude of the change at issue, management’s need for certainty, speed, flexibility, and secrecy in making decisions, and the possibility that mandatory bargaining could be used as a tool for union delay.

In a section of its opinion that focused on the interests of labor and management generally, rather than on the specific facts before it, the Court broadly concluded that a decision to close part of a business was not a mandatory subject of bargaining. Mandatory decision bargaining, the Court held, is not likely to augment the communication between management and employees that the policy of collective bargaining seeks to foster. The Court emphasized that the interests of the employees are significantly protected by the requirement of bargaining over the “effects” of a closing, id. at 681-82, 101 S.Ct. at 2582-83, and that the union is protected by section 8(a)(3) from a partial closing that is motivated by anti-union animus, id. at 682, 101 S.Ct. at 2582-83; see Textile Workers v. Darlington Manufacturing Co., 380 U.S. 263, 85 S.Ct. 994, 13 L.Ed.2d 827 (1965). The Court stated that where collective bargaining is likely to be useful in making a closing decision, management would have “an incentive to confer voluntarily with the union,” 452 U.S. at 682, 101 S.Ct. at 2582, but that making the closing decision a mandatory subject of bargaining would create a risk of uncertainty and union delay, id. at 683-86, 101 S.Ct. at 2583-84. The Court concluded that “the harm likely to be done to an employer’s need to operate freely in deciding whether to shut down part of its business purely for economic reasons outweighs the incremental benefit that might be gained through the union’s participation in making the decision.” Id. at 686, 101 S.Ct. at 2584.

In the next section of the First National Maintenance opinion, the Court returned to the specific facts before it, in order to “illustrate the limits” of its holding. Id. at 687, 101 S.Ct. at 2585. The Court mentioned several other factors that might be relevant to determining whether an employer was required to bargain over a decision. Id. at 687-88, 101 S.Ct. at 2585-86. *227Although the impact of this “limiting” section of the opinion has not been fully defined, a majority of commentators, including those who harshly criticize the First National Maintenance result, agree that the decision established a per se rule that an employer has no duty to bargain over a decision to close part of its business. See, e.g., George, To Bargain or Not to Bargain: A New Chapter in Work Relocation Decisions, 69 Minn.L.Rev. 667, 680 (1985) (Court applied its balancing test “in such a way as to create a per se rule of not requiring bargaining for partial closure decisions”); Harper, Leveling the Road from Borg-Warner to First National Maintenance: The Scope of Mandatory Bargaining, 68 Va.L.Rev. 1447, 1449, 1461 (1982) (“opinion at least provides a clear rule for one class of employer decisions”); Note, Unfair Labor Practice and Contract Aspects of an Employer’s Desire to Close, Partially Close, or Relocate Bargaining Unit Work, 24 Duq. L.Rev. 285, 295-96 (1985) (“need for certainty led the Court to adopt a per se rule that partial closings for economic reasons are not mandatory subjects of bargaining”); The Supreme Court, 1980 Term— Leading Cases, 95 Harv.L.Rev. 91, 330, 334 (1981) (“Court constructed a per se rule by calculating burdens and benefits across widely divergent industries and collective bargaining configurations”).

The Courts of Appeals have likewise agreed that under First National Maintenance, economically motivated partial closing decisions are not mandatory subjects of bargaining. See, e.g., International. Union, United Automobile, Aerospace, and Agricultural Implement Workers of America v. NLRB, 765 F.2d 175, 181 n. 23 (D.C.Cir.1985); NLRB v. Island Typographers, Inc., 705 F.2d 44, 50 n. 8 (2d Cir.1983); Vitek Electronics, Inc. v. NLRB, 763 F.2d 561, 565 n. 5 (3d Cir.1985); NLRB v. National Union of Hospital and Health Care Employees, 824 F.2d 318, 321 (4th Cir.1987); Local 2179, United Steelworkers v. NLRB, 822 F.2d 559, 567 (5th Cir.1987); Serrano v. Jones & Laughlin Steel Co., 790 F.2d 1279, 1287 (6th Cir.1986); Mason v. Continental Group, Inc., 763 F.2d 1219, 1224 (11th Cir.1985). It is against this backdrop of academic commentary, lower court interpretation, and clear language in First National Maintenance itself that we address the Board’s decision.

III.

We cannot accept the National Labor Relations Board’s contention that the bargaining requirement it imposed on Arrow is consistent with the holding and the analysis of First National Maintenance. The Board failed to recognize that First National Maintenance requires that employers be free to act without the constraints of bargaining when undertaking a decision of the magnitude involved in this case. The Board’s various attempts to distinguish this case from First National Maintenance are unpersuasive and fail to establish any obligation on the part of Arrow to bargain over the decision to close its Hudson plant.

The Board held that Arrow’s decision to close Hudson was a mandatory subject of bargaining because the decision “turned on labor costs.” The Board states that it applied the standard established in Otis Elevator Company, 269 NLRB 891 (1984) (hereinafter Otis II) in reaching this conclusion. The plurality opinion in Otis II established a standard by which any management decision affecting employment security, regardless of the “appellation of the decision,” is a mandatory subject of bargaining “if the decision in fact turns on direct modification of labor costs and not on a change in the basic direction or nature of the enterprise.” Id. at 893. As a general matter, the Board’s labor-costs standard provides scant guidance or predictability to companies faced with fundamental business decisions. It also establishes an exception to the First National Maintenance decision that threatens to swallow its rule. As one commentator has noted, the Board’s standard is problematic in itself because “management decisions may turn on labor costs and involve a fundamental change in the business.” George, supra, 69 Minn.L.Rev. at 689 n. 111.

*228The Board’s standard presents even greater difficulties in this case. As applied to Arrow’s decision, the standard is somewhat different from that originally set forth in Otis II. The Otis II standard apparently required bargaining only where a decision turned solely on labor costs. See Otis II, 269 NLRB at 895; George, supra, 69 Minn.L.Rev. at 690. Here, however, the parties stipulate that part of the basis for the Hudson closing was the declining northeast market served by the plant. The standard applied by the Board in this case may, therefore, require bargaining where a management decision is based on other considerations in addition to labor costs.

That part of the Board’s standard relating to a “change in the basic direction or nature of the enterprise” is also unclear. In this case, the Board concluded that the closing of an entire manufacturing facility was not such a change. Yet this result would not have been easy to predict on the basis of earlier Board decisions. See Columbia City Freight Lines, 271 NLRB 12, 13 (1984) (closing of one freight terminal and transfer of work to another existing terminal a fundamental change); Otis II, 269 NLRB at 892 (closing of one research facility and consolidation of operations with those at another location a fundamental change). According to the the Board, however, the standard requires Arrow to bargain because labor costs played a major role in the decision to close and because the Hudson closing did not represent a significant change in Arrow’s operations.

We reject the Board’s labor costs analysis here because it is flatly inconsistent with First National Maintenance. Where an employer closes down part of its operation — in this case, by closing a plant — the Court has made clear that bargaining over the decision is not required. With regard to labor costs, the Court stated that where “labor costs are an important factor in a failing operation and the decision to close, management will have an incentive to confer voluntarily with the union to seek concessions that may make continuing the business profitable.” 452 U.S. at 682, 101 S.Ct. at 2582-83 (emphasis added). Arrow’s decision here fits squarely within the Court’s statement, indicating that Arrow’s decision was not a mandatory subject of bargaining.

The Board’s standard simply fails to give sufficient weight to the magnitude of the change involved here. In First National Maintenance, a maintenance company’s decision to terminate a contract with a single customer was the significant change in operations held to lie outside the scope of mandatory bargaining. The Court found that decision “a significant change” despite the fact that the employer’s “ ‘regular and usual’ method of operation involved ‘taking on, finishing, or discontinuing this or that particular job.’ ” Id. at 671 n. 5, 101 S.Ct. at 2577 n. 5. Comparing these events to the shutdown of an entire manufacturing facility that was involved here, we hold that Arrow’s decision to close Hudson qualified as a “significant change in operations” under First National Maintenance.

The Board appears to suggest that Arrow’s decision is not governed by First National Maintenance by distinguishing between “labor costs” and “economic reasons” for a closing. There is no basis in the Supreme Court’s cases for any such distinction. “Economic reasons” are not reasons distinct and apart from a desire to decrease labor costs. The Supreme Court uses the term “economic reasons” in contrasting business decisions from decisions based on anti-union animus. See, e.g., Fibreboard, 379 U.S. at 208, 85 S.Ct. at 401-02 (describing Fibreboard’s decision to contract out work to save labor costs as “economic” rather than anti-union). Labor costs are inescapably a part of the economic picture of the enterprise, and management’s consideration of them in basic business decisions does not render First National Maintenance inapplicable.

As a further aspect of its labor costs analysis, the Board contends that Arrow could not close the Hudson plant without bargaining because its closing decision was prompted by frustration with the collective bargaining process. The Board discounts the unprofitability of the Hudson *229plant as a motivation for the closing on the ground that Arrow had known of its losses for several years, yet did not close the plant until after its failed contract negotiations with the union. These arguments do not provide a basis for the Board’s decision. It is well established that an employer may not partially close in order to avoid or damage a union. Textile Workers v. Darlington Manufacturing Co., 380 U.S. 263, 85 S.Ct. 994, 13 L.Ed.2d 827 (1965). But the parties have stipulated that “economic considerations” — declining sales volume and increased production costs — prompted the Hudson closing. Frustration with the course of labor relations may well play a part in prompting a company to consider closing a facility, but absent the unfair labor practices covered by Darlington, this frustration does not place a closing decision outside the rule of First National Maintenance.

The Board also makes much of the fact that the union offered concessions prior to the closing decision. Although this point more properly goes to the question of whether impasse was reached in the bargaining, we note that the union concessions do not alter the fact that Arrow had no obligation to bargain over the closing. It is true that, after being apprised of the possibility of closure, the union modified its bargaining position. As First National Maintenance emphasized, however, had the union offer presented any realistic chance of making continued operations at Hudson profitable, Arrow had every incentive voluntarily to pursue this possibility. See 452 U.S. at 682, 101 S.Ct. at 2582-83. The record suggests that this incentive would have been especially strong here, where sentimental reasons on the part of Arrow management kept the Hudson plant open for several years in the face of large losses. The record gives no indication that the union’s offer might have made Hudson profitable. After the concessions, the union was still demanding a substantial increase in wages and benefits at a plant that was already losing large sums of money. The union’s offer of concessions provides no basis for the imposition of a bargaining requirement here.

The Board next asserts that because the work previously done at the Hudson plant was transferred to Spartanburg, South Carolina, the Hudson closing should not be seen as a “partial closing” within the rule of First National Maintenance. The Board cites the Court’s statement in First National Maintenance that it expressed “no view as to other types of management decisions, such as plant relocations, sales, other kinds of subcontracting, automation, etc., which are to be considered on their particular facts.” Id. at 686 n. 22, 101 S.Ct. at 2584 n. 22. Although the Board’s labor costs analysis does not depend on the “appellation” to be given a particular decision, the Board apparently suggests this case involves a “relocation” that requires bargaining despite First National Maintenance.

Spartanburg's assumption of the work previously done at Hudson does not affect the conclusion that Arrow underwent a “partial closing.” The Supreme Court has defined a “partial closing” as “a closing of one or more facilities by the employer having more facilities than those which he is closing.” Darlington, 380 U.S. at 275, 85 S.Ct. at 1002. Arrow’s closure of Hudson obviously fits this definition. “Relocation” would seem to be a term more appropriate to those situations where an employer replaces an existing plant with a new plant that will perform the same work in a different place. Here, however, the closing decreased the number of Arrow plants, and altered the geographic focus of Arrow’s operations. Many plant closings undoubtedly are followed, as was the one here, by expansions at a company’s other facilities. This does not remove such closing decisions from the coverage of First National Maintenance.

We do not believe, in any event, that cases are to be resolved by placing decisions within rigid categories such as “partial closing,” “relocation,” or “consolidation.” As the Board has pointed out, management decisions involve different dimensions, which may be categorized in several ways, and determining whether bargaining is required is not a matter of find*230ing a proper “label” for the decision. Our conclusion that Arrow’s closing decision was not a mandatory subject of bargaining is not dependent on a “partial closing” label. We reject the Board’s conclusions not as a matter of categorization, but because Arrow’s actions, however they might be labelled, were not a subject of mandatory bargaining when examined in light of the analysis set forth by the Supreme Court.

We are mindful of the deference to which the Board’s decisions are entitled. Deference, however, is not to be equated with “judicial inertia.” NLRB v. Financial Institution Employees, 475 U.S. 192, 202, 106 S.Ct. 1007, 1013-14, 89 L.Ed.2d 151 (1986). The Supreme Court remains the final arbiter of the meaning of the National Labor Relations Act, and its decisions are binding on the Board no less than on the lower courts. Arrow’s decision to close the Hudson facility was an exercise of entrepreneurial direction and control which was not subject to the duty of mandatory bargaining. It fits squarely within the Supreme Court’s holding that “the harm likely to be done to an employer’s need to operate freely in deciding to shut down part of its business purely for economic reasons outweighs the incremental benefit that might be gained through the union’s participation in making -the decision.” 452 U.S. at 686, 101 S.Ct. at 2584.

IV.

First National Maintenance teaches that, contrary to the Board’s holding, decisions of the magnitude involved here remain management prerogatives, not subject to a statutory bargaining obligation. Whether on the basis of the rule set forth in First National Maintenance, or the balancing analysis the Court followed in establishing it, the result in this case is the same: Arrow was not obligated to bargain. This point is readily illustrated by an application of the balancing analysis to the facts presented here. In applying the First National Maintenance analysis, we first address considerations relevant to the benefit for the collective bargaining process, then turn to those relating to the burden on the employer’s ability to conduct its business.

A.

The factor most relevant to labor-management relations is the amenability of Arrow’s decision to resolution through collective bargaining. As the Board found, labor costs did play a part in the decision to close Hudson. Another factor, however, was the decline of the market that Hudson served. Sales from Hudson declined over forty percent in the period prior to the closing. There is no reason to believe that bargaining could have had any effect on this aspect of Arrow’s decision.

Current labor practice, another factor considered by the Court, First National Maintenance, 452 U.S. at 684, 101 S.Ct. at 2583-84; Fibreboard, 379 U.S. at 211, 85 S.Ct. at 403, also supports the view that the decision here was not peculiarly suited to resolution through collective bargaining process. This would be true even if we were to assume that Arrow’s decision was purely a “relocation.” Provisions imposing restrictions on the decision to relocate have been described as included only in “some contracts, mainly in the apparel industry.” See Collective Bargaining Negotiations and Contracts § 65:201-202 (BNA 1987). Further, as the Supreme Court pointed out in First National Maintenance, provisions requiring bargaining over a decision to close are relatively rare. 452 U.S. at 684, 101 S.Ct. at 2583-84. Far more common are provisions requiring notice of a closing and prompt bargaining over effects. See Collective Bargaining Negotiations, supra, at § 65:201-233. Current labor practice thus “supports the apparent imbalance weighing against mandatory bargaining” on these facts. 452 U.S. at 684, 101 S.Ct. at 2583.

The length of the bargaining relationship is relevant to the likelihood that bargaining will result in a useful exchange of information and proposals between the union and the employer, thus promoting the labor peace that is the goal of the NLRA. It is true that, unlike the situation in First National Maintenance, the union and Arrow *231had a lengthy bargaining relationship prior to the closure of Hudson, and that contract negotiations were taking place prior to the decision to close. See id. at 688, 101 S.Ct. at 2585-86. Neither of these facts, however, supports the conclusion that Arrow’s decision here is outside the scope of First National Maintenance.

Here, two factors emphasized in First National Maintenance indicate that “it is unlikely that requiring bargaining over the decision itself, as well as its effects, will augment this flow of information and suggestions.” Id. at 681, 101 S.Ct. at 2582. First, the parties agree that full effects bargaining took place. Through effects bargaining, labor peace is promoted by ensuring that the union “has some control over the effects of the decision and indirectly may ensure that the decision itself is deliberately considered.” Id. at 682, 101 S.Ct. at 2582. Second, Arrow’s relationship with the union does not involve a “refusal to bargain at all” or a history of other unfair labor practices. Id. at 683, 101 S.Ct. at 2583. The Court has indicated that where, as here, the employer has “performed all its bargaining obligations apart from [decision bargaining],” the union’s legitimate interests are likely to be met through those channels. Id. at 684, 101 S.Ct. at 2583-84.

We are also persuaded that the contract bargaining prior to the decision to close the Hudson plant had little relevance to the decision-bargaining question. It is true that the decision to close came about only after Arrow and the union failed to agree on a new contract and a strike was in effect at the plant. Yet the parties have stipulated that the closing decision was the product of “economic considerations,” and there has been no finding of any anti-union animus on the part of management. See Darlington, 380 U.S. 263, 85 S.Ct. 994, 13 L.Ed.2d 827 (1965). The Board here also found that contract negotiations were at impasse prior to Arrow’s decision to consider shutting the plant. See 284 NLRB No. 57, slip op. at 9 (1987). We are not faced here with the “abrogation of ongoing negotiations” over the contract. 452 U.S. at 688, 101 S.Ct. at 2585-86. The Board appears to view the contract and closure negotiations that took place as one incomplet-ed course. Yet Arrow’s obligations to bargain about the contract were satisfied, and its proposals withdrawn, before the question of closure arose. Arrow’s obligation to bargain about the closing must therefore be considered independently of the contract negotiations on these facts.

This case also does not involve an attempt on the part of an employer to subcontract part of the work of an ongoing operation. This alone distinguishes Arrow’s case from Fibreboard, where the Court held that an employer’s decision to replace its own maintenance workers within a plant with outside workers from a subcontractor was a mandatory subject of bargaining. In such a situation, the possibility for labor strife is great, as employees see fellow workers fired and workers of a nonunion subcontractor enter the plant. Similarly, where some of the workers of a facility that continues to operate are laid off without negotiation, labor relations between the employer and the remaining employees may suffer. Cf. NLRB v. 1199, National Union of Hospital and Health Care Employees, 824 F.2d 318, 321-22 (4th Cir.1987) (layoff of 6 of 85 employees not within the rule of First National Maintenance ). The situation here is far different from that presented in Fibreboard or Health Care Employees in that it does not concern employer actions that “merely replaced existing employees” with cheaper labor that would “do the same work under similar conditions or employment.” Fibreboard, 379 U.S. at 203, 85 S.Ct. at 398.

B.

As to the burden on the conduct of Arrow’s business, it is apparent that the same burdens that mitigated against mandatory bargaining in First National Maintenance are present here.

The magnitude of the decision to shut down an entire facility and to reallocate large amounts of capital underscores the need for certainty in the conduct of business affairs, see 452 U.S. at 679, 101 S.Ct. *232at 2581. The Board’s approach to this case would leave management at sea as to whether it had an obligation to bargain, as an employer could never be certain when a decision might eventually be found by the Board to be too closely related to labor costs. Further, the dispute in this case illustrates that determining how much bargaining is required to satisfy an 8(a)(5) obligation is no less difficult. The Administrative Law Judge found that Arrow had satisfied its obligation to bargain, only to be reversed years later by the Board. This case provides a striking example of the risk created by mandatory decision bargaining that an employer “might be faced ultimately with harsh remedies forcing it to pay large amounts of backpay to employees who likely would have been discharged regardless of bargaining, or even to consider reopening a failing operation.” Id. at 684-85, 101 S.Ct. at 2583-84.

The possibility that speed, flexibility, and competitiveness important to management may be sacrificed is also quite high in the type of situation presented here. See id. at 682-83, 101 S.Ct. at 2582-83. Where a manufacturing facility is to be shut down, management may need to act swiftly in winding down the operation and reallocating or selling property and equipment. Here, for example, Arrow was able to cancel orders for new equipment at its Santa Maria plant and transfer Hudson equipment there. An obligation to bargain to impasse over a closing decision of this type would make such actions immeasurably more difficult.

Finally, the possibility that a mandatory bargaining obligation would give the union a powerful tool for delay is very real in the situation presented here. As the Court has stated, the “union’s practical purpose in participating ... will be largely uniform: it will seek to delay or halt the closing.” Id. at 681,101 S.Ct. at 2582. The costs attending such delay here are great. This feature again distinguishes this case from Fi-breboard, where the employer merely desired to bring in new workers to perform maintenance work at its plant that had to continue in any event. See 379 U.S. at 213, 85 S.Ct. at 404. Indeed, unlike the situation in First National Maintenance, delay here would require the continued operation of an unprofitable plant, with all the attendant maintenance and overhead costs.

V.

Companies must be able to make closing and consolidation decisions of the magnitude presented here. First National Maintenance recognized that this requires that management be free to act with certainty, and without the constraints imposed by mandatory bargaining. “Congress had no expectation that the elected union representative would become an equal partner in the running of the business in which the union’s members are employed.” 452 U.S. at 676, 101 S.Ct. at 2579. A fair reading of the Supreme Court’s opinion includes Arrow’s actions in the class of decisions that “lie at the core of entrepreneurial control.” Fibreboard, 379 U.S. at 223, 85 S.Ct. at 409 (Stewart, J., concurring).

We recognize that closing decisions such as the one at Hudson can have a significant impact on the lives of men and women whose jobs are at stake. “It is possible that in meeting these problems Congress may eventually decide to give organized labor or government a far heavier hand in controlling what until now have been considered the prerogatives of private business management.” Id at 225-26, 85 S.Ct. at 410-11. Such a system would be far different from that of the present statute, however. As it has been construed by the Supreme Court, the National Labor Relations Act does not impose a duty to bargain over the decision here.

ENFORCEMENT DENIED.

. Arrow requested the bargaining on counsel’s advice that Arrow was required under the NLRB’s rulings as of that time to bargain over the closing decision.

. During the effects bargaining, the union filed an unfair labor practice complaint that was later dismissed, and filed a class action seeking injunctive relief on the ground that Arrow closed the plant in order to discriminate against the workers on the basis of age, sex, race, and national origin. Nonetheless, the parties have now stipulated that the effects bargaining was adequate.