by Frank James
As has been widely reported, the Air Force stunned almost everyone yesterday by deciding to award its huge, $35 billion contract for new airborne refueling tankers to a partnership formed by Northrop Grumman, the Los Angeles-based company, and EADS Inc., the European maker of Airbus airliners.
Boeing, headquartered in Chicago but with a large workforce in Washington State, was the big loser. Boeing had said that if it got the contract to build the new tanker based on its 767 airliner, it would provide enough work to keep 40,000 U.S. workers busy.
But Boeing lost. So the aircraft will be built in Europe, with the conversion work being done in Mobile, Ala. According to the Seattle Post-Intelligencer, the Mobile operations would employ far fewer people than Boeing says it would have, apparently 1,200 to do the modification work.
Aerospace workers protest in Everett, Wash. after the Air Force announced it chose Northrop Grumman Corp. and Airbus parent EADS over Boeing to supply air-refueling tankers, on Friday, Feb. 29, 2008. (AP Photo/Seattle Post-Intelligencer, Dan DeLong)
This is obviously not making people in Washington State happy. The Seattle P-I puts it this way:
Rep. Norm Dicks, D-Wash., a senior member of the House panel that oversees military spending, predicted "a firestorm of criticism about this decision." He said many lawmakers "don't want Airbus building this plane."
Sen. Patty Murray, D-Wash., told reporters she was "frustrated, angry and in shock at this announcement."
The state's senior senator said she couldn't understand the choice of giving a massive contract to a foreign-based business, considering that the U.S. is teetering on a recession.
"You can put an American sticker on a plane and call it American, but you can't call it American made. They are clearly going to be made overseas, and that is a factor we all have to be thinking about, whether we want American planes built overseas."
Murray said Boeing will be debriefed by the Air Force later this month on why it lost out, and the company could then appeal the decision. The Government Accountability Office then has 100 days to examine the appeal, Murray said. She said it was premature to speculate on a congressional inquiry, but added, "We clearly want to be supportive of Boeing and find out the facts."
Because of the jobs issue, this Air Force decision seems tailor-made for Sen. Barack Obama and Sen. Hillary Clinton who in their increasingly populist appeals have made the loss of American jobs a major presidential campaign issue, especially as they compete for labor votes during the primaries.
And in the general election, there'd likely be little political risk for the Democratic presidential nominee in bashing the Air Force since the state that will benefit from the decision, Alabama, is so far from being a swing state, it is so reliably Republican, we might as well put it in Republican column already.
Meanwhile, criticizing the Air Force's decision will just fire up Democrats and independents in Washington State, which may prove important for either Clinton or Obama in a race against Sen. John McCain who has strong appeal to independents and could conceivably do better than the 46 percent of the vote President Bush got in that state in 2004 in his race against Sen. John Kerry who won 53 percent.
There's also likely to be an affect on congressional campaigns. House members are all up for re-election this year in a very difficult economy, which may not be officially in a recession but feels that way to many Americans, including quite a few who will be angered by the Air Force decision.
In the Air Force's defense, creating jobs in the U.S. wasn't part of its goal. It said it wanted to get the best it could aircraft for taxpayers' money and the various missions it envisions the new aircraft flying.
That goal clearly came across during yesterday's Pentagon press conference. Here's an extended exchange between reporters and Air Force Gen. Arthur Lichte and and Assistant Defense Secretary Sue Payton had with a reporter.
Q Eric Rosenberg, Hearst Newspapers. Were either of you surprised, or do you think your colleagues will be surprised by the selection? And then secondly, do you think that there'll be blowback from congressional types, concerning for the fact -- the simple fact that this is not just Northrop Grumman, there's a high foreign component in this?
GEN. LICHTE: Well, I think it's simply a great day for America. I think this is a move forward. When you ask if we're surprised, we are just happy to be moving on. Every day in Air Mobility Command, we're launching sorties and we're engaged in the fight. There are some 1,000 sorties that are being flown right now around the world; 250 of them are tanker sorties out there. And so for me, as the commander of Air Mobility Command, every 90 seconds we can see an Air Mobility aircraft rolling down a runway somewhere in the world. And so for me, it's not a surprise. We are working hard every day.
What this is, is relief, because we know that in the future years, we will have a new tanker, because tankers are what really enable the fight. We can look all over the world from space, and then when we find a problem, if we need to put bombs on target, it's the tanker that enables that, or we can go with an outreached hand for humanitarian airlift. So --
Q But institutionally, it is a surprise. I mean, Boeing has been building these for so many years that it has to strike your colleagues -- it must strike your colleagues as something curious.
GEN. LICHTE: I guess I'd tell you to turn back the clocks and look at the last time we bought a new tanker, when we were discussing whether we were going to buy 747s or DC-10s built by McDonnell Douglas. And so we have a combination of Boeing tankers -- certainly from the years '56 to '64 we had some 700 tankers built by Boeing -- but we've also had tankers that were built originally by McDonnell Douglas.
Q And the foreign element? Do you think that you're going to get some blowback from Capitol Hill about this?
GEN. LICHTE: This is an American tanker. It's flown by American airmen. It has a big American flag on the tail, and every day, it'll be out there saving American lives.
Q Justin Fischel with Fox News. The contract is going to EADS, then, which is overseas. Boeing argued, however, that it would create about 40,000 American jobs here. Did that weigh into your decision at all? Obviously, with it going to EADS, there won't be as many American jobs created. How do you respond to that?
MS. PAYTON: Well, I'd be happy to respond to that. I -- the RFP is not involved with -- the requirements of the RFP were not such that this was taken into consideration. The RFP had to do with requirements that the warfighter needed, and we balanced the requirements of the warfighter with the best value for the taxpayer, relative to how much this system is going to cost and how well it's going to perform.
Q And just to follow, did size matter in this issue? I mean, the KC-30 is twice as large as the 767. Did that play into cost savings, and was that an issue in this decision?
GEN. LICHTE: Well, I -- from a warfighter's perspective, and I know the team looked at a whole number of things, but from my perspective, I can sum it up in one word: more.
More passengers, more cargo, more fuel to offload, more patients that we can carry, more availability, more flexibility and more dependability. And so from my aspect, the team did tremendous work and now we will take that and put it into the fight.
So the Air Force believes it and U.S. taxpayers got more. But there are tens of thousands of U.S. aerospace workers who believe they got less, and the shaft.