Lawmakers Blast Boeing Defense Contract Snub
We have been following this story, I was also surprised that the French got the contract.
US lawmakers have reacted angrily after the US military awarded a 35-billion-dollar aircraft deal to Europe’s Northrop Grumman/EADS group, in a major blow to US manufacturers Boeing.
“It’s stunning to me that we would outsource the production of these airplanes to Europe instead of building them in America,” said Republican Senator Sam Brownback about the Pentagon’s decision.
“I’ll be calling upon the Secretary of Defense for a full debriefing and expect there will be a protest of the award by Boeing.”
The US Defense Department announced Friday that it was awarding the deal for a fleet of in-flight refuelling craft to the Northrop Grumman/EADS team, in a huge coup for Boeing’s main rival Airbus.
The surprise choice of EADS marks the European group’s entry into the lucrative US defense market, where so far it had had only a marginal presence.
Boeing voiced strong disappointment after the contract slipped through its hands and said it would ask for an explanation.
“Once we have reviewed the details behind the award, we will make a decision concerning our possible options,” said Boeing spokesman William Barksdale, hinting at a possible protest.
While European political and industry leaders have hailed the decision, many Republicans have been left seething.
“We should have an American tanker built by an American company with American workers,” said Republican Representative Todd Tiahrt.
“I cannot believe we would create French jobs in place of Kansas jobs.”
Boeing, the second leading US defense contractor after Lockheed Martin, had been considered the heavy favorite for the contract and according to its website is the largest employer in Kansas.
The contract for the newly named tanker, the KC-45, is one of the largest Pentagon contracts in recent years and the first order on a tanker market valued at more than 100 billion dollars in more than 30 years.
Los Angeles-based Northrop Grumman and the European Aeronautic Defense and Space Company (EADS), parent of Airbus, will provide up to 179 tankers for the US Air Force.
“The tanker is the number-one procurement priority for us right now. It is the first step in our critical commitment to recapitalize our aging fleet to move, supply, and position assets anywhere,” said General Duncan McNab, US Air Force chief of staff, in a statement.
The stunning victory for EADS comes as group CEO Louis Gallois seeks to build up its presence in the defense sector, judged to be less cyclical than civil aeronautics.
Gallois told AFP the contract was a “great subject of pride” for the company and would “encourage it to pursue its strategy in the United States.”
A spokesman for French President Nicolas Sarkozy said he had called Gallois “to pay homage to this historic success.”
“He is delighted that after recent difficulties, EADS has come back brilliantly with record orders, particularly in one of the most difficult and demanding defense markets in the world,” said David Martinon in a statement.
German Chancellor Angela Merkel, in a statement, called the deal “an immense success for Airbus and for the European aerospace industry.”
Airbus will assemble the tankers in Mobile, Alabama, and has vowed to transfer assembly of its commercial 330 aircraft there, creating jobs.
Republican Alabama Senator Richard Shelby welcomed the decision. “Not only is this the right decision for our military, but it is great news for Alabama,” he said.
The contract was expected to bring up to 1,800 jobs to the Mobile area and 5,000 to the state, he added.
Boeing and the EADS-Northrop team had been competing for more than a year for the prize, which offers a cushion for decades in case of a downturn in the highly cyclical market for commercial aircraft.
EADS’s winning offer is a modified version of the Airbus 330. The commercial plane will be militarized by Northrop Grumman and its American partners to prevent the transfer of sensitive technology to a foreign entity.
Boeing had proposed a version of its long-haul cargo plane, the 767-200.
In May 2003, a similar tanker contract was awarded to Boeing, but it was annulled under allegations of procurement fraud, for which Boeing paid a record 615-million-dollar settlement to the government.
(AFP)
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“I cannot believe we would create French jobs in place of Kansas jobs.”
Well the original article posted here:
http://www.weeklystandard.com/weblogs/TWSFP/2008/02/air_force_buys_french_tanker.asp
says this will create 25,000 american jobs.
It seems that the big uproar over this is that our military hardware is being produced by another country. Guess what, France is an ally. Also, think of all the other military hardware the the US gets from foreign country. Check here for a small list of other pieces of hardware we use: http://www.airliners.net/discussions/non_aviation/read.main/1843181/
March 3rd, 2008 at 1:05 pmMy Ford explorer has a French transmission. I hope the plane flies better than my explorer holds position on a hill.
March 3rd, 2008 at 1:13 pmIt’s not like Boeing is going to have lay off multitudes of employees after losing this bid. Even if they do, I’m sure those people would be welcome at the new Alabama plant. This is good news for the global economy, the American-France alliance, and the people who will have jobs for quite some time. We shouldn’t just give contracts to American companies just because they’re American, that goes against the concept of competition and free trade. My only question is: are they trading quality for a cheaper price? We shouldn’t skim on our military. But if the French technology is better in this instance, more power to the Pentagon for making the tough choice.
March 3rd, 2008 at 1:25 pmif it saves money, and produces an equally good product, it’s the right decision. I’m surprised as well, but not indignant like so many others are.
March 3rd, 2008 at 1:26 pmask a pilot what they trust, an airbus or a Boeing?
Airbus products have been called throw away planes by many I have talked to, mechanics and pilots.
March 3rd, 2008 at 1:45 pmOnce again a politician speaks before the brain is in gear. The fact is the model 727 Boeing aircraft was due to be retired from service and if the military picked up this contract for this refueler they would be the ONLY consumer of this airframe. Thus maintenance costs could be significantly higher.
Politicians need to give the money to the military and let THEM decide what is best for their furture equipment needs not the other way around. A perfect example of this is the MRAP. Politicans wanted it but the military didn’t.
March 3rd, 2008 at 1:50 pmAre we going to reward countries for not supporting the war on terror? We could not fly over France to hit Libya, and
March 3rd, 2008 at 2:04 pmno help to be found with Iraq. Well maybe they will like us better now.
Sounds to me that the Boeing sales department had their priorites mixed up. The AF was pretty clear that they wanted more capacity. They also made it heard that they were troubled by being the last buyer of the 767 airframe. Finally, I think playing the “buy American card” intangible was weighted a little to heavily by Boeing.
March 3rd, 2008 at 2:10 pm“Don’t forget that Northrop is part of the deal, it’s not EADS alone.
Technicaly, it still a US company that won the deal.
Whithout Northrop, EADS would not have done much…
after the 5th unit, planes will be assembled by Airbus in Mobile, then “militarized” by Northrop also in Mobile…
nobody has mentioned yet that with a USD under 1,50 €, this is a money losing operation for Airbus”
March 3rd, 2008 at 2:33 pm#1 - AEDS/Airbus had a better product (larger tanker capacity) and a better price.
#2 - Northrop Grumman (U.S. defense contractor) is part of the consortium.
#3 - The consortium will build a plant in the U.S. and do part of the manufacturing here!
#4 - EADS is not a “French” company - It’s a joint U.K. German and French venture.
#5 - Our Nato Allies in Europe buy way more military hardware than we buy from them.
#6 - Blindly supporting a U.S. company without regards to the facts, is NOT patriotism - it’s Nationalism.
#7 - Anyone who know a little about the European defense industry will know that they messure up to their U.S. counterparts in both innovation and quality (There’s a reason the for the term “German Engineering”
#8 - U.S. manufacturers have consistently “under invested” in manufacturing automation and technology which is why our steel and auto industries are getting their buts kicked by Asian manufacturers.
#9 - Pay a visit to any U.S. defense contrator and take a close look at their manufacturing plants and you will realize that the vast majority of precision machine tools are from Sweden, Austria, Germany, France, U.K. and Italy.
We simply don’t produce that kind of high precision tool in the U.S.
Stop being pathetic cry-babies. The only people that are to blame is the management of U.S. manufacturers who are totally focused on kissing their shareholder’s behinds and who’s vision for the future doesn’t go further than the next quarter’s results.
March 3rd, 2008 at 2:35 pmMr. Standfast
“My Ford explorer has a French transmission. I hope the plane flies better than my explorer holds position on a hill.”
I bet it’s a bad transmission of languages, learn french for transmission sake
March 3rd, 2008 at 2:37 pm
Faith of Judas
March 3rd, 2008 at 6:03 pmThats because you think that the decision was arrived at by scientific evidence and that man will eventually evolve beyond the need for silly defense spending, reasoning that war is bad.
Wouldn’t you agree that Judas was well hung?
focused on kissing their shareholder’s behinds and who’s vision for the future doesn’t go further than the next quarter’s results.
Michael, you obviously don’t know a gottdamned thing about managing a multi-billion dollar company. Companies that are Boeing-sized have plans and contingency plans for many years into the future. It’s easy to take the leftard tack and accuse corporations of screwing America, but it’s something else to know WTF you are talking about.
There’s so much wrong with your comment that I’m not going to fisk the whole thing. However, this BS:
U.S. manufacturers have consistently “under invested” in manufacturing automation and technology which is why our steel and auto industries are getting their buts kicked by Asian manufacturers.
is laughable. You do realize that those self-same Asian companies–with the exception of Japan, Taiwan, and Korea–actually buy antiquated, defunct steel mills from around the world, pay to have those facilities taken apart piece-by-piece, then shipped over to Asia, reconstructed, and put into operation, right? It’s not that we, the US, have a technological or infrastructure disadvantage…it’s that Asian workers will work for pennies on our dollars. Labor capital is expensive in the US, so it is cost effective to ship those jobs elsewhere.
Nice try at the anti-capitalist, anti-US attempt, though.
March 3rd, 2008 at 9:27 pmskh.pcola
and that’s what are also doing the Airbus companies heads, moving towards the US, the dollar is cheaper than the Euro, as the planes business is delt in dollars till now, then manufacturing the airbuses in US, will assure them to sell more planes elsewhere else too.
March 4th, 2008 at 1:56 amWhy the fuck would they even bother having other companies bid if they dont want to go with them regardless of the design? The plane they chose they saw best fit, its boeings fault for not designing a superior tanker
March 4th, 2008 at 5:35 am