American Industry At Stake In Tanker Fight
by Capitol ConfidentialAnyone who claims that defense contract negotiations are uninteresting has yet to discover the battle brewing over who gets to build the next Air Force tanker.
American aerospace giant Boeing and European mega-corporation Airbus are locked in a war over who gets to deliver $35 billion worth of refueling planes to the Defense Department to replace about 80% of the Air Force’s refueling fleet – planes that average almost 50 years old, according to the Lexington Institute.
Just a few short weeks ago, Boeing and Airbus officially submitted bids to manufacture the tanker, and now both will compete to see who can create 179 tankers for less cash, who’s plane will be ready in time and who hits closer to the mark on meeting the Pentagon’s needs. Right now the momentum seems to be in Boeing’s favor, but the stakes are high.
From the Wall Street Journal:
For Boeing, the fight is to defend its home market and an area of expertise—tanker planes—that it once dominated. Boeing in 2001 beat Airbus to supply Japan with four 767 tankers. They are now in operation but differ substantially from what Boeing has offered the Pentagon…
For EADS, a U.S. win would cement its position as the new world leader in tankers. Since 2004, it has won orders for 28 tankers from Australia, the U.K., Saudi Arabia and United Arab Emirates. The Airbus design has also faced some delays in development.
Airbus has a version of the needed tanker that they will deliver to Australian forces this week, which they say will be about 90% identical to the version they want to deliver to the Pentagon. Boeing doesn’t have a version of the tanker in production, but they say they’re more willing to wait to develop the tanker so that it could be better in line with the Pentagon’s immediate needs, though it will be based on Boeing 767 plane.
Boeing claims that it’s design will be more custom, more effective and less costly than Airbus’ plane, which has a larger wingspan, burn more fuel per hour, and according to Boeing, has a higher maintenance cost. And worse, as Jed Babbin pointed out right here on Big Government not long ago, Airbus’s design categorically fails in meeting the Air Force’s needs being unable to complete mission critical maneuvers. Airbus says, however, that it’s plane will be cheaper, though, and has submitted a bit that reflects that.
But there’s a catch to Airbus’ bid that might have disastrous effects on American trade interests.
As the Lexington Institute points out, none of the planes Airbus markets have been built without massive subsidies from the European Union. These subsidies, which the WTO recently ruled were an illegal advantage in international trade, were given to European companies to help make their products cheaper on the global market, undercutting American manufacturers and, ultimately, costing American interests.
When the decade began, America accounted for roughly a third of global economic output and a third of global military spending. Today, it accounts for a quarter of global economic output and half of global military spending. Obviously, the growing disparity between America’s economic and military power cannot be sustained indefinitely.
Pentagon policymakers apparently do not grasp what America’s economic decline means for the future of its defense posture. They are planning on the assumption that military spending will be stable in the years ahead, even though the nation is growing poorer every day. In fact, the policymakers are contributing to the economic trends that spell doom for their defense plans by sponsoring a tanker competition that may send billions of dollars to one of the key culprits b behind America’s trade deficit.
Two American companies have already had to give up on competing with European companies. Boeing is the only company left in the race and even they have seen their market share drop by half. Congressman Dave Loebsack, who last week helped pass the Bipartisan Bill to Boost American Workforce and Industry, claims that awarding Boeing the tanker contract would bring an estimated 800 jobs to Iowa alone, perhaps among the first steps in reversing the exodus of industry from American shores.
The House of Representatives, in May, voted 410 – 8 to force the Pentagon to take the WTO’s decision into consideration when deciding on which company got the contract for the new tanker, but the Defense Department hasn’t seemed willing, yet, to admit that they need to consider that they might be rewarding years of unfair competition and contributing to America’s trade decline.
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80 Comments
Whatever happened to "buy America first"? Hopey could be missing out on a chance to say he created a job without lying.
Boeing does have tankers in the air and in production. Airbuss has a currency exchange risk problem and they have been recently in trouble for being subsidized by several countries so they caould win contracts that lose money.
America doesn't need the jobs since Obama made the economy robust.
Why all of a sudden are the Pentagon brass becoming so cost conscious? Not buying equipment that won't meet military specifications is penny wise and pound foolish. Or is this the result of having too many desk jockeys and too few soldiers in charge?
You're talking about all of those "Green" job, aren't you? The ones that quietly smother three jobs for every one created?
If there is another American industry that Obama can destroy, he will.
Our stupid leaders will vote for the Un-American plane. Isn't it obvious at this point what is happening to this country. It's like the forces of darkness have taken over our country. Well Obama is from the Hive of Villainy, so it shouldn't surprise us. Everything is anti-American with these leaders in Washington including the White House.
is this the story where the chick from Boeing was sleeping with someone in the Air Force and everyone had to resign? And aren't the Airbus planes going to be built in a plant in Georgia?
Airbus, huh? Great, so maybe we'll get a bunch of tankers made out of carbon fiber instead of steel. At least we're sure they don't rip apart in heavy turbulence after major systems failures.
http://www.telegraph.co.uk/news/worldnews/europe/...
Obama misread that as "hate America first!"
The last thing that was genuinely made in America, was the Census Totem Pole that was shipped to DC.
Green Jobs equate to grounds keepers at the Cemetery.
Two years ago the KC-X tanker contract was awarded to Northrup Grumman-EADS (Airbus). Rightfully Boeing protested the award. Subsequently, Northrup has dropped it's association with Airbus on the future tanker program. The big brass in the Air Force actually liked the Airbus tanker better, because it was based on the A-320 and was bigger (hauls more fuel and/or cargo if converted to cargo hauling role).
The W.T.O. took six years to find Airbus guilty of using billions in illegal subsidies to cheat U.S. manufacturers of market share and tens of thousands of jobs. Now the EU is appealing the decision that Airbus took improper subsidies. If we wait to enforce the W.T.O. Agreement on Subsidies and Countervailing Measures until the European Union finishes its frivolous appeal process, we will lose thousands more jobs, including 50,000 on the tanker contract alone. Soon, we won’t have any industrial base or aerospace workers left to protect. What are going to do Obama and Gates? Let the Europeans cheat you again?
Blame it on Bush……….
Tell congress to buy American. Our folks need the work.
It's blatantly obvious that when national security is involved, our armed forces should NOT be dependent on foreign suppliers for materiel.
But, since no progressive administration has yet to successfully prosecute an armed conflict, it should not be a surprise that it isn't obvious to them……
Don't blame Obama. The Bush's were globalist lunatics – they did everything possible to destroy this nation by destroying industry (not to mention many other things like wasting our resources fighting wars for Israel.)
Yeah, Obama pushed through NAFTA, too!
If Boeing gets the tanker contract, its tankers will be built in China, where Boeing presently builds its major airframe components, and assembled in the U.S. If EADS and Northrop had been allowed to keep the original contract they won, the basic aircraft would have been built in Europe and all of the tanker modifications would have been done in the U.S.
Even with the aircraft built in Europe, studies have shown more U.S. citizens would have been employed to support the EADS/Northrop tanker contract than the Boeing tanker.
Here's what it boils down to, Boeing is all union. They even have a union for most of their engineers. Yes, the EADS workers in Europe are unionized but the Northrop aerospace workers never have been. They don't need a union because Northrop has always paid its workers better than Boeing and Lockheed union workers and it pisses those union thugs off.
Now, ask me why we need General Electric as a second supplier of engines for the F-35 JSF.
….is penny wise and pound foolish.
Actually, that is ALL so-called "FREE TRADE."
If it makes sense for protectionism here it makes sense for it everywhere!
Import nothing.
Kick out the illegals.
Stop giving welfare to foreign terrorists who have attacked us like Israel has.
Just recognize Bush is from that same hive – CFR!
that would be Clinton
This is how it is to live under socialist Rule. Keep the law suits coming. States Rights!
GOP, submit your briefs!
Ummmm…
United States Armed Forces should use equipment stamped with "MADE IN THE USA".
Of course the Government will have to use funds borrowed from China to pay the bill… but that is another subject.
Not really. Bush I started it and left the signing to Clinton, if memory serves.
I'll bite – Why do we need GE as a second supplier on engines for the F-35 JSF?
blah. blah. blah. go ride your supercharged camel, you moron.
OldmanRick has it right – the blame is spread on that one. GHWB prepared it and Clinton signed it. They probably have seats next to each other at the CFR meetings.
The contract needs to stipulate a requirement to have the most Americans employed as well as the least exposure of technology to those who do not have our best interests at heart.
Since bamsterman has been traveling the globe apologizing for us, he must be making the case that just about everyone else is motivated to not have our best interests at heart. Therefore, build it here. Not China. Not Europe. Not on the moon. Here.
If the Boeing sections are fabricated in China, what would keep them from being sabotaged during manufacture? It would be better if they are constructed from start to finish in the US by a US company. Why can't we do it all here with American workers? I'm tired of the foreign deficit and outsourcing of our jobs and tech. Inform congress that we need this done in our country by American labor.
Excellent information.
I fail to see how current undecided contract award decision, that basically comes down to choosing an American vs European Jet for our armed forces has anything to do with any failures of the Bush administration? So if this administration picks Airbus it will be Bush's fault? Is that the story line your trying to sell?
What wars are we fighting for Israel again? I'm pretty sure Israel's army and top notch air force is plenty capable of fighting their own wars. If the politicians would get out of the military's way and stop tying their hands like they are doing to every aspect of industry in this country, we would have victory in both Iraq and Afghanistan a long time ago.
As someone who BUILDS PARTS FOR BOEING right here in Oklahoma, I happen to not agree with you that the major airframe components are built in China. Yes SOME parts are, but the vast majority are still made right here in America, in Oklahoma, Kansas, and Washington State…. Sadly you are correct about Boeing being union, however Oklahoma is now Right To Work, and as a result almost half of the plant where I work is NOT a part of the union! Happily so in my opinion….
Are you acquiring your crack-rock from a new source? The reason I ask is because just a few days ago you said people in Arizona are "racist" for trying to enforce the illegal immigration laws.
I know this much. You sure do talkzalot of pure bullshit.
Sorry Joevrat, I know that my son-in law manages projects at the aerospace machine shop he works for and that there are many such companies around the USA. Northrop dropped out of the partnership with EADS and all that is left is a French company that has been illegally been subsidized so they can compete unfairly in the world markets. Any bis from them has to bee suspect as the subsidies will now be removed, forcing them to have to replace the lost funds through cost overruns or cost cutting that could have an impact on safety. My vote is for Boeing.
Barry’s spreading the wealth, over the American workers dead body’s.
I can't believe you think our European bretheran would try to screw us. Now go away before I taunt you again!
Since there is no real competition within the US to choose from, you can't just say buy American and then pick the best American source. Boeing might as well be owned by the US Government if you do that kind of socialist methodology.
So this has to be a competition based primarily on best aircraft at best price. The DOD should be negotiating directly with Airbus, not a US company providing marketing.
This is a tanker, not a high tech black project…
What ever happened to the concept of what is best for the American soldier, sailor, airman or marine? I was in the Army for 12 years and constantly saw us using inferior gear that was produced in the USA and seeing allies with better equipment in some cases than what we had.
Remember that Boeing is aggressively diversifying into non-union States. Unions almost killed Boeing. They don't want what happened to GM happen to them I guess. In the old days a company would get a set of specs and characteristics for the desired item rifle, tank, or plane. No guarantee or money was given. Then the government would pick which one that suited the services needs best. From that simple idea to today is a perversion of all reason and common sense. Read about the development of the F-16, B-17 and F-15 when you get the chance. Compare that to the V-22, F-22, and F-35. We are so far down the wrong path in this arena of procurement it boggles the mind.
Lets see how Government Motors is helping America, your TARP tax dollars at work:
U.S. automobile giant General Motors Co. said Tuesday it plans to invest close to $500 million in its Ramos Arizpe plant in northern Mexico to produce a new line of engines as well as a new vehicle… http://www.americanthinker.com/blog/2010/08/gm_an...
This is a case for our government investing in American jobs. With all of the billions wasted in the TARP and bail-out programs, it seems like they could invest in an American company and insist on production being in the US to create long term jobs. Airbus has been subsidized from their start by the EU. The subsidies were to help them originally compete on the world market, but were continued long past the intended point to where they are being used to unfairly compete. The subsidies will be rescinded which will mean cutbacks that might hurt safety or operational abilities or at the very least, outsourcing to China to reduce costs. Boeing is familiar with the military protocols and needs and is the wiser choice. If Obama wants to help American jobs he could insist that the aircraft be built in the US.
Never let an American crisis go to waste.What morons. Seal the borders, stop the billion dollar handouts to every country but our own and tax the shit out of all chineese imports. Just 5 years of helping ourselves rather than abortion clinics and condom training in far away lands will lift this country out of the hole we are in. But then we would fall back to the 60s when America's prosperity was profound and above all others but the ribbon-laden one worlders can't be having any of that now can they. The bloated carcasses in Washington just don't get it.
http://www.youtube.com/watch?v=votqiJtIPD0
It's "Northrop,' not 'Northrup,' and the EADS tanker (KC-45) is based upon the Airbus A330, not the smaller A320. Aircraft would have been assembled in Germany then flown 'green' to Mobile, AL for final conversion and delivery.
The EADS design is about 20 years more modern than the Boeing design and is quite a bit bigger. A KC-767 is slightly larger than a KC-135. The KC-45 would be closer resemble the KC-10 in size.
What wars are we fighting for Israel again?
Afghanistan and Iraq – they want us to attack Iran for them, too, and then Pakistan and Lebanon and Syria.
I'm pretty sure Israel's army and top notch air force is plenty capable of fighting their own wars.
LOL! No they aren't. They were turned back by Lebanese militia riflemen and are threatened by unarmed men on ships. Either way you don't understand logic well. Even if they could, why should they when they can trick the Americans in to using THEIR blood and treasure to accomplish their goals? What is Mossad's motto again?
we would have victory in both Iraq and Afghanistan a long time ago.
Let's think about this – did the Russians have the same problem with their politicians? LOL! No, there is no victory defined and there is none to be had. Just cut our losses.
The US Army Stryker and the USMC LAV-25 are both based on a Canadian design. The P-51 Mustang relied on a British-designed engine. It's tempting to want to buy 'Made in the USA,' but never count out the stuff your allies come up with. Our Armed Forces need the best stuff in the world, period, and shouldn't be limited to just the best stuff that originates from within our borders.
You're spot on with your statement. I agree with you wholeheartedly.
The Boeing 767 version of the tanker is based on a proven design, abeit a decade or so older than that of the Airbus A330. While I personally favor purchasing the Boeing product because of the jobs it will support, it is paramount that the squabbling end soon. The NEWEST versions of the KC-135 are approaching fifty years old and the millions of dollars spent on each aircraft per year to keep them airworthy would be best spent elsewhere.
Bbbbbuuttt, Bbbbbush!!!!! Why are so many liberals stuck on the same old lame talking points? This is 2010. The current administration temporarily has the power to do the right thing. Why don't they do it?
Interesting stuff in this Australian article.. Long and detailed…Could not locate the Cliff Note version..
http://www.ausairpower.net/APA-JSF-Analysis.html
The majority of the components manufactured for the Boeing 767 are made right here in the good old USA, contrary to your China claim. Not quite sure where you got your information but please refer to the following website for a complete list of vendors for this aircraft: http://www.airframer.com/aircraft_detail.html?model=B...
While there are certainly foreign suppliers, this is normal for just about every major aircraft manufacturer world wide.
When did Israel attack us?
What ever happened to the law that anything for the US military had to be US made? Why is there even a debate on this?
Jack
The Airbus is a newer design by about ten years… but the 767 can still fly circles around it, has greater fuel efficiency, and lower maintenance costs.
Where is the problem in making this decision? Is the DoD procurement department staffed by morons?
We should always have a second supplier for all our military goods. We are still using many aircraft that were originally built 40-50 years ago. Because there was a sole source supplier, it is now difficult to get replacement parts (many OEMs have either gone out of business or they don't support the replace parts demands) and new suppliers have to consequently be qualified. Also, back when these aircraft were originally designed the government didn't buy design rights, which makes it even more difficult to get new sources qualified as there is no data available.
And in Oregon, we have a boeing component plant in Gresham(I think).
Jack
Actually it was , that is until the other US Company dropped out of the second competition. Boeing has most of its parts built overseas. The other company was going to buy the airframe in peices and then have it assembled in Georgia. This same company had other states in mind to perform the subsystem development and integration. This same company would have created many more jobs domestically. Especially in Mississippi, and other locations who need the jobs this business would have provided. This company won the previous competition for the tanker. This company? A company called Northrop Grumman.
Most parts are, you speak just of the integration work.
Yeah we better hurry up, huh? Oh thats right boeing has not even built one yet. at the rate they go we will not see a new tanker until 2020. The way boeing does things it will be cost overrun by 2 and initial operational capability will be beyond 2020. Northrop Grumman would have a new tanker by 2015.
This will affect me directly. This if any is a real case that Government can help create jobs in the US. All you have to do is look at Airbus's practices for who they get their avionics from and that should cement Boeing as the maker of the new tankers! Airbus almost exclusively uses Thallis for their avionics supplier because they are both French companies. So they would be slitting american throats and shipping good paying meaningful jobs overseas that we desperately need here!
Uh, no, the assembly would be in Alabama, and it would be just that… final assembly. Except for engines and cockpit displays, everything else would be manufactured in Europe, and then shipped to Alabama. Compared to building most of the plane's components here, the jobs Airbus is offering are miniscule to the number of people Boeing would employ.
Jake? What exactly are you talking about? Boeing has manufactured a number of KC-767 tankers which are now in the inventories of the Japanese and Italian Air Forces. Oh, and you can take the Northrop Grumman name off of the proposed KC-45. They have withdrawn from the competition and EADS is now going it alone. So you see, unless something drastic comes about, the KC-45 will be European built, not American.
I hear a lot of people arguing in this thread that "jobs should be saved". But just below this post is one about Obama's bailout of GM which his spokeman defends on pretty much the same grounds! I don't get it. If Boeing has a better product for the Air Force's needs then fine, buy that. But if Airbus does (whether or not it was subsidized by European governments) let's buy that. I like the idea of the Europeans subsidizing our defense needs (for once!) Make the decision based on the merits, not on some desire to save American jobs. American workers will save their own jobs by building a high-quality product. If they can't in the manufacturing sector, they will need to do it elsewhere. But you guys are treading on loose ground when you advocate political decision-making for the economic benefit of one sector of our massive economy.
You can't use the save American jobs market in this comment thread but object to it on free-market principles in the previous one.
Duh yeah. We have just begun to find out how FOS these bureaucrats are and how much common sense they do not have!
Exactly.
Ever since Chinese U.S. Army boots.
Maybe Obambi should nationalize Boeing.
Ok. I'm too lazy to go back and look up the whole trail. I remember this from a while back, I believe, because McCain was backing Airbus over Boeing. I think Northrop Grumman must have proceeded even that episode.
In anycase, the presentation of the facts in this particular BG post are over simplifying the story. This one is a major-cluster-fock for sure.
Hey. do you have links to this information?
The Israeli air force is the best in the world, but what makes it so…
In 1967 during the Six Day War, Israel was fighting against the air forces of Jordan, Egypt and Syria, who were helped by Iraq, Saudi Arabia, Sudan, Tunisia, Morocco and Algeria, all at the same time. Israel destroyed 400 enemy planes in one day and achieved complete air superiority in just 3 hours.
In 1973 during the Yom Kippur War, Israel was struck during their most holy holiday by surprise. Israel bombed the Syrian HQ in Damascus, destroyed the bridges on the Suez canals and shot down 450 planes in one day.
In 1981 when Iraq had its nuclear plant, Israel devastated Iraq’s nuclear plans, Israel sent 5 F-15 fighters to destroy the nuclear lab facility, after the f-15 crossed into Iraq’s air space, 25 MG-22/23 planes were sent to destroy the F-15s. NOT ONLY did the Israel accomplish their mission, they destroyed all 25 enemy aircraft without losing one of their own.
In 1982 during Operation Peace on the Galilee, Israel shot down 100 Syrian planes without one loss, destroyed 19 SAM’s in one day and achieved complete air superiority.
Are you comparing the Russian military to ours? How patriotic of you.
Unarmed men on ships…. So you had your head up your a$$ like the rest of the media on that one huh?
These planes would be green jobs. Air Force has some green clothing.
Why is there not several US companies bidding on this. It should not even be open to bids from other countries. Could it be that airline manufacturers have been shuttered due to gov't reg. and union thuggery.
The EADS tanker will be built in Mobile, AL, USA and will employ at least 1500 Americans. EADS already has an engineering center in Mobile. EADS wil also build commercial versions of their planes in Mobile and Boeing does not want any competition to locate in the USA. The Eads tanker will be at least as American made as the Boeing, maybe more.
Just a small factual correction.
The F-15s were sent for air cover, the bombs were dropped by F-16s. http://news.bbc.co.uk/onthisday/hi/dates/stories/...
You Okies finally made the decision to go Right to Work. Good for ya'll. As far back as I can remember, every time it came to a vote, Right to Work would lose by a small margin. So tell me, when did this happen?
WTF?
It's a defense contract, guys, so get it from an American company if at ALL possible.
Screw the Europeans.
Those Boeing plants on Oklahoma are the old Vought aircraft palnts. Northrop bought Vought in the 1990's and later sold the aircraft business to Boeing. Sure they are still making parts for Boeing's older line of aircraft, but the new aircraft parts manufactuing is going to China. It won't bee too long before the union run Boeing out of your state also.
Actually WildBill, I work at one of those plants and we are making parts for NEW aircraft at a much higher rate of production than the parts for older ones. Sorry but I do work here.
About 10 years ago or so we finally got enough votes to pass it….
I would buy who ever had the cheapest gas on board.
Better warn Boeing, ther new Dreamliner is built with more composities than any airliners in History! Plenty of Boeings have crashed in their time too!
". Boeing doesn’t have a version of the tanker in production, but they say they’re more willing to wait to develop the tanker so that it could be better in line with the Pentagon’s immediate needs"
SO the Air Force is desperate for a plane, now the competititon is running several years late (8years!). Boeings current tanker to the Italian air force is running 5 years late (ad broadly similar to the proposed USAF tanker), and still not delivered….
So Boeing want to make a brand new plane, (the so called Frankentanker, as its made from parts from different models), so will have to go through a new aircraft development and certification phase, THEN the tanker development on top, when will the USAF get this plane?
And who will pay for all this development?
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