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Saturday, March 01, 2008

U.S.-Europe Team Beats Out Boeing on Big Contract

Published: March 1, 2008
By Leslie Wayne
NT Times

WASHINGTON — The Air Force, in a stunning upset against the Boeing Company, awarded a $40 billion contract for aerial refueling tankers on Friday to a partnership between Northrop Grumman and the European parent of Airbus, putting a critical military contract partly into the hands of a foreign company

The contract, one of the largest at the Pentagon, is initially valued at $40 billion but has the potential to grow to $100 billion. It is also a sign of the growing influence of foreign suppliers within the Pentagon and breaks a relationship that has lasted decades with Boeing, which had built the bulk of the existing tanker fleet and had fought hard to land the new contract.
Under the contract, Northrop and the European Aeronautic Defense and Space Company would build a fleet of 179 planes, based on the existing
Under the contract, Northrop and the European Aeronautic Defense and Space Company would build a fleet of 179 planes, based on the existing Airbus 330, to provide in-air refueling to military aircraft, from fighter jets to cargo planes

Senator John McCain, the presumptive Republican presidential nominee, scuttled an earlier attempt by the Air Force to award the contract to Boeing, opening the door for the Northrop-Airbus bid.
Senator McCain’s campaign spokeswoman referred calls to his Senate office, which could not be reached for comment.

Comments

It’s the last paragraph that stands out particularly, bringing grist to the mill of McCain’s detractors.

Senator John McCain, the presumptive Republican presidential nominee, scuttled an earlier attempt by the Air Force to award the contract to Boeing, opening the door for the Northrop-Airbus bid.

Senator McCain’s campaign spokeswoman referred calls to his Senate office, which could not be reached for comment.

Oswaldo on March 1, 2008 at 10:48 am
Rob
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The shrill rhetoric about defense contracts being in the hands of foreign countries smacks of protectionism to me, most likely ginned up by Boeing’s lobbyists.

Obviously, military production needs to be secure.  But really this is just a bunch of people upset that a foreign company offered a better bid than a domestic company.

The Defense Department is spending my tax dollars here.  I’d like them to be spent as efficiently as possible, even if that means picking foreign companies.


When the people fear their government, there is tyranny; when the government fears the people, there is liberty.

-- Thomas Jefferson

Rob’s recently listened-to songs:

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Rob on March 1, 2008 at 01:58 pm

Obviously, military production needs to be secure.  But really this is just a bunch of people upset that a foreign company offered a better bid than a domestic company.

They building a refueling plane, hardly “state of the art” technology.  Most likely any sensitive avionics and reliable engines will remain domestically produced.

European Aeronautic Defence and Space Co.


“To love is not to stare steadfast at one another...it is to look forward, in the same direction.”
Saint-Exupéry

laydownSally on March 1, 2008 at 02:45 pm

Whoops! Hit the submit button to quickly.

European Aeronautic Defence and Space Co. in partnership with Northrop Grumman are allies and I believe have done US Defense Dept. work in the past.


“To love is not to stare steadfast at one another...it is to look forward, in the same direction.”
Saint-Exupéry

laydownSally on March 1, 2008 at 02:52 pm

I can see both sides to this argument.

We’ve had quite a bit of cross-pollination when it comes to weapons systems, dating back to pre-Revolutionary war days.

In WWI we used French and British aircraft like the wonderful French SPAD VII’s and SPAD XIII’s and the not-so-good English ‘Flaming Coffins. ‘

In WWII, arguably the best single engine fighter in the world, the North American Aviation P-51, was really a mediocre ground attack aircraft until we replaced the domestic engine with the outstanding British Rolls-Royce Merlin. 

More recently, one part of the Marine Air Wing is equipped with the British Harrier AV-8 jump jet VSTOL, and a good part of allied aviation have been American aircraft.  The cross-pollination and cooperative efforts have been ongoing for some time and frankly necessary to keep down unit costs through economies of scale and to encourage standardization throughout the NATO / CENTO and any other regional alliances the US may be involved with.

On the other hand, it is important that sensitive national defense secrets and production capability be kept right here at home. 

Not sure what McCain was trying to do to kay-bosh Boeings’ bid, but between Boeing, General Dynamics and Lockheed-Martin Northdrop-Grumman (essentially our version of the BORG) there seem to be fewer and fewer competitors in the Aerospace and defense game.  I’ve been away from that field since 2000, so my info is somewhat dated. 

Given the incestuous world of the military / industrial / governmental complex and McCains’ history as the punctilio of honesty (cough-Keating 5-cough - Soros funding - cough-cough) I wonder why Boeing got zapped.  The downside to that is that engineers and highly-skilled craftsmen get laid off.

(And you wonder why I refuse to work government contracts any more? )

On balance, transport and refueling aircraft, aside from perhaps certain aspects of avionics perhaps, seems to be a pretty fungible commodity.  Improving air2air refueling is good stuff, but I imagine working closely with our NATO allies should not let too too many secrets out of the bag. 

If that were a consideration, we would likely have curtailed assistance and trade with Israel some time ago, since some sensitive technology we provided to them keeps ending up in Chinese hands.

All told, based on the little I have seen, this is a non-issue.  If the contracts were in connection with the F-22 / F-35 (aerial superiority fighter and all-arms ground attack aircraft respectively), now THAT would be something to gripe about.


...for great justice

Move_Zig on March 1, 2008 at 03:18 pm

Zig,

but I imagine working closely with our NATO allies should not let too too many secrets out of the bag.

As long as we keep those secrets from congress.


“To love is not to stare steadfast at one another...it is to look forward, in the same direction.”
Saint-Exupéry

laydownSally on March 1, 2008 at 03:46 pm

I agree, the deal is no biggie. But it will certainly be used by McCain’s critics. Here’s one reaction:

“We are outraged that this decision taps European Airbus and its foreign workers to provide a tanker to our American military,” the delegation from Washington State said in a joint statement. Boeing planes are assembled outside Seattle. “This is a blow to the American aerospace industry, American workers and America’s men and women in uniform.”

Yada, yada
Oswaldo on March 1, 2008 at 05:15 pm

Oswaldo,

Wasn’t that a delegation of Boeing workers that made that statement?


“To love is not to stare steadfast at one another...it is to look forward, in the same direction.”
Saint-Exupéry

laydownSally on March 1, 2008 at 05:52 pm

Sally, Oswaldo,

Yes, insofar as sharing tanker and transport aircraft technology with our European allies is concerned, the deal seems rather benign.

But Oswaldos comment started me thinking about it. I just spent about five minutes Googling terms like McCain - Airbus - Soros and China.

Notice I didn’t focus on old news like the Keating Five influence peddling scandal.  I will just take it as a given that McCains’ influence is up for grabs.

Now, we have reason to believe that this alleged Republican has been
financially supported by the Arch-Leftist George Soros,
2002799902480039963_rs.jpg
since 2001, a fact which should give any American, Conservative or not, pause for thought.  If Soros is paying the piper, what sort of tune is he calling?

Red China has been after widebody jet technology for quite some time.  Certainly, widebody jet technology has peaceful civilian applications, such as passenger airline and cargo transport aircraft.  But if anyone has been paying attention to Red China since its bloody inception in 1949, Beijing is always interested in the military application of any given technology, such as moving air-portable tanks, troops, guns and material, as well as long range nuclear armed bombers.

Clintons’ close ties to Red China saw a huge transfer of sensitive technology to the Communists, notably nuclear warhead and intercontinental missile technology (gosh thanks Billie Jeff)

Now international billionaire and ueber-Leftist George Soros, who also has aircraft manufacturing ties to Red China is paying Juan McCain.

What’s the impetus for Airbus to get such a huge (umm. $40 BILL-yun?) US contract?  For one thing, it appears that Airbus as an aircraft company, cannot find its financial ass with both hands. As Marty the Martian would often complain, any contract with Airbus is riddled with delays, delays, delays.

And if that is not enough, Airbus has close ties to Red China as well.

Now that’s just what can be found on the surface after a five minute internet search.  I wonder what a detailed Congressional inquiry as to why McCain thwarted an American aircraft companies bid to open the way for a European competitor would elicit?

I distrust McCain greatly.  The Chinese, via their North Vietnamese proxies, had five and a half years to put the zap on McCains’ brain.  I will assume that he is tainted and will find it highly likely that there is more to this deal than meets the eye.

I know it sounds like a volte face from my earlier post, but you mentioned something that started this train of thought. 

I won’t lose any sleep over it though.


...for great justice

Move_Zig on March 1, 2008 at 06:23 pm
Avatar for groetzinger

if we would just cut taxes

groetzinger on March 1, 2008 at 06:52 pm

Sally asked

Oswaldo,

Wasn’t that a delegation of Boeing workers that made that statement?

Yes, sort of. Just as Rob pointed out above, it was actually a statement

ginned up by Boeing’s lobbyists.

Lobbying for the company and for its workers as might be expected.

Oswaldo on March 1, 2008 at 06:57 pm

Mov_Zig,

Since you googled the matter, wasn’t some of the problem the fact that Boeing was after a quasi no-bid deal? Expecting everyone to come to the rescue of a failing fellow American company?

Oswaldo on March 1, 2008 at 07:22 pm

I asked because you said:

But it will certainly be used by McCain’s critics

I doubt there were very many McCain supporters at Boeing to begin with.


“To love is not to stare steadfast at one another...it is to look forward, in the same direction.”
Saint-Exupéry

laydownSally on March 1, 2008 at 07:39 pm

I believe I read somewhere the Airbus was actually MORE expensive than Boeing’s proposed plane, but it met more of the essential criteria for the job? I would prefer that the contract go to strictly American companies, too- wonder why that was not possible for Northrup-Grumman et al?

Good Ol Boy on March 1, 2008 at 08:18 pm

Where have you been Good Ol Boy? We’ve missed you!

You’re right, but it was bigger and had a greater fuel capacity.


“To love is not to stare steadfast at one another...it is to look forward, in the same direction.”
Saint-Exupéry

laydownSally on March 1, 2008 at 08:44 pm

Since you googled the matter, wasn’t some of the problem the fact that Boeing was after a quasi no-bid deal? Expecting everyone to come to the rescue of a failing fellow American company?

I can’t say.  I simply don’t know that much about the exact details of the entire situation.  I just am looking at the personalities and entities involved.  They usually follow the same trajectory they have always followed.

Then again, with regard to a quasi no-bid contract, really how many manufacturers today exist that could possibly meet all the requirements for the initial DFAR (Defense Federal Acquisition Requlations) Request for Proposal (RFP)?  Gone are the days of Tony Fokker, Clyde Cessna or Dutch Kindleberger.  The post WWII-era saw a feeding frenzy of famous name aircraft manufacturers being devoured into just a handful of super-mega aircraft manufacturers.  Now, it’s mostly thumbfights between Boeing, Northdrop-Grumman (who sought merger with) Lockheed-Martin, and General Dynamics. 

I won’t feign expertise in this field since my involvement is rather outdated.  Lots of things might have happened since… oh 1996? 

The aerospace industry is possibly the most vital defense aspect of the US military-industrial complex (the intelligence field being up there as well).  If you cannot control the airspace over the modern battlefield, whatever assets (spelled men, machines and material) are simply targets for the enemy to destroy.  This is coming true for near-Earth orbital space as well, since we are seeing the militarization of space via the recent Chinese and American satellite kills.

What this translates on the ground as, we as a nation cannot afford to allow the experienced engineers, designers and craftsmen who construct our B-1’s, F-117’s, F-22’s and the like to wander off into unemployment, or worse yet, into employment for say Libya, North Korea, Red China or Russia. 

They are the cream of our crop and a vital national resource.  Thus, even if Boeing or Bell Aerospace or Lockheed Martin should fail to win a given contract, they need to have some sort of income to have them ready to start cranking out their hi-tech wares when the demand suddenly shows up at a moment’s notice.

We no longer have wide oceans and staunch allies to buy us time in the early days of any future conflict like we did in both World Wars.  The Next One will be a Come As You Are party, and we will be losing men and machines that we will not be able to replace any time soon (so we’ll just have to unwrap some F-106’s being stowed in the deserts of AMARC and fight with ancient technology—since even that is better than total surrender).

For these reasons, dealing with the aerospace defense industry is unlike soliciting fungible widgets.  Free competition might result in outsourcing the manufacture of fighter jets, since MiG-33s and the Red Chinese J-10 (which looks a hellava lot like a Eurofighter) are a heck of a lot cheaper than F-22s or F-35s.

I would go even further and suggest that the loser of these governmental mega-contracts be given some incentive to stay in business and keep its best engineers and workers employed, by say, licensing the winning design and have them make a certain percentage of the governmental contract.  We saw something akin to this across the entire defense industry, but for a different reason, during WWII.  Say, for instance, Chance-Vought or North American Aviation couldn’t meet the demand for sheer numbers of aircraft the government was asking for, so Corsairs and Mustangs were built at various plants across the USA.

Damn, do I sound boring when I hold forth like this?


...for great justice

Move_Zig on March 1, 2008 at 10:26 pm

ADDENDUM

McCain’s role as puppet to Soros’ puppeteer takes on a malevolent tinge after hearing this about Soros, from the American Thinker.

Mr. Soros’ stated goal for more than a decade has been to burst the bubble of American supremacy

Do we really want to have someone like that controlling a US president?


...for great justice

Move_Zig on March 2, 2008 at 01:39 pm

Zig,

You make a good point about keeping the best and brightest employed.

I still don’t have a problem (other than a Soros/China/Airbus connection) with the body of this refueler being built by an amalgam of US and European companies, as long as production of sensitive components remain in the US. That plane was afterall, favored by the military.

Doesn’t the DoD have a fairly large staff of R&D types to keep our engineers homeside?


“To love is not to stare steadfast at one another...it is to look forward, in the same direction.”
Saint-Exupéry

laydownSally on March 2, 2008 at 02:30 pm
Avatar for Lestat

Doesn’t the DoD have a fairly large staff of R&D types to keep our engineers homeside?

No, we contract out almost everything.

Lestat on March 2, 2008 at 02:42 pm
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