McCain is Right on Boeing Deal
House Speaker Nancy Pelosi and prominent Democrats (the most vocal being in the Washington State delegation) are slamming John McCain for his role in opening the door to competition from a U.S.-European partnership that recently won a major deal to provide aerial refueling tankers for the Air Force. The main thrust of their critique is that the victory by this team will cost American jobs (many of them in Washington State, surprise, surprise!). But rushing to criticize McCain on the basis of pork barrel politics is not the way to gain the high ground on defense policy, to put it mildly.
When the tanker deal first surfaced, Boeing was involved in what turned out to be criminal activity in its pursuit of the deal. It started with a business- as-usual fundraiser for Appropriations Committee Chairman Ted Stevens of Alaska (at which nearly two dozen Boeing executives wrote $1,000 checks for Stevens campaign). Stevens then inserted language in pending legislation requring the Pentagon to lease 100 Boeing aircraft that would be transformed into refueling tankers in a deal worth up to $26 billion. McCain denounced the deal as "war profitering." And it got worse -- Boeing offered a job to Pentagon acquisition official Darleen Druyun while she was still at the Department of Defense negotiating with them, and criminal
charges were brought, landing her and a top Boeing executive in jail. Not a pretty picture.
It was only then that McCain raised the idea of competition for the deal, and a team of Northrop Grumman and the European defense giant EADS stepped up to the plate.
There are larger questions here, like whether the Air Force needs new tanker aircraft at all, but on the
narrow question of whether Boeing some how "deserved" the contract McCain's critics are wildly off base.
To the extent that they do have an issue, it has to do with the fact that McCain's national campaign manager has served as a lobbyist for EADS. It could be that Pelosi will hone in on this issue, which at least deserves investigation. But the notion that Boeing was "wronged" is itself a flawed argument.
If American jobs were the first priority for government contracts, the highest bid with the least productive methods would win.
Yes, that other outfit's bid for bullets is lower, but they use a high speed bullet making machine. Our bid, although it is 687 times higher, uses thousands of skilled artisans to file each bullet individually from a block of lead. Where they can make a bullet per employee on anout 0.4 seconds we need about two hours.
March 12, 2008 11:59 AM | Reply | Permalink
Do you always speak in vague analogies having nothing to do with anything?
March 12, 2008 4:48 PM | Reply | Permalink
Well, at least he can't be accused of trying to make terseness stand in for sustance.
March 12, 2008 8:14 PM | Reply | Permalink
"But rushing to criticize McCain on the basis of pork barrel politics is not the way to gain the high ground on defense policy, to put it mildly."
I think you just called efforts to have American workers build American military hardware "pork barrel politics", or am I reading you wrong?
March 12, 2008 12:01 PM | Reply | Permalink
Military spending should be all-American, I think. It's like having your states Medicare lines being handled by a company in India.. What do they know or care about Americans?
Somethings are so silly as to defy argument.
March 12, 2008 12:08 PM | Reply | Permalink
And some argument so simple minded as to defy belief.
March 12, 2008 12:26 PM | Reply | Permalink
Common sense is a rare quality.
Ask any U.S. Soldier if they'd rather bullets be made stateside or in China, and why.
I'm not a protectionist in general, but as far as military hardware and software is concerned, it's a no-brainer.
Keep it here.
March 12, 2008 12:37 PM | Reply | Permalink
I suspect, though I don't know, if you polled infantry persons you would find that the AK 47 is a more reliable assault rifle than is an M 16.
March 12, 2008 1:13 PM | Reply | Permalink
http://www.youtube.com/watch?v=G6BpI3xD6h0
Maybe. Maybe not.
March 12, 2008 1:25 PM | Reply | Permalink
Interesting video. Thanks for the link. When I indicated "more reliable" in my previous post I was referring to durability and, I understand, more durable. I understand, for instance the AK clip is of heavier metal and less apt to become dented.
Having said that, I know so little of the subject that I probably should not even be commenting.
I think, though, there is amongst many folks a reflexive notion that just because something is manufactured in the USA that it's of higher quality.
The importation of Japanese manufactured cars in the 1970s forced Detroit to began producing more economical, higher quality cars. I see the Northrup Gruman/EADS deal in the same light. Boeing is essentially without competition in the USA.
Additionally, perhaps the point has already been made, but much of the Boeing tanker production would also be off shore.
March 12, 2008 2:56 PM | Reply | Permalink
I believe the first assault rifle was German during WWll, the Sturmghwher(sic)44. It was created for their paratroopers, the Fallschirmjager.
March 13, 2008 11:41 AM | Reply | Permalink
workerbee:
It worries me that this type of thinking will overtake long-standing fundamental liberal principles, beginning with the principle that American workers come first. I don't need an economic lesson. My guess is most Americans are willing to pay a premium to ensure that American workers make American military and other hardware.
Bruce
March 12, 2008 12:33 PM | Reply | Permalink
I'd never give you an economics lesson. :)
My argument is one of common sense. Some things should be made here. It's not just the quality or security issue. No nation can afford to lose the skills needed to make necessary items needed for the common defense. There is also the technological argument. If these things aren't made here, then where are the $$ to spend on R&D? In England? That helps us, how?
Otherwise, I tend to agree with you, on general principle. Making toys, pet food, and drugs elsewhere hasn't particularly benefited American consumers. Things aren't really cheaper, are they.
Sure, you can get a cheap t-shirts at Wal-Mart, but they fall apart after one or two washes. Becoming a disposable society hasn't made anything cheaper if goods are being constantly replaced. You bet I'd pay more for American made, quality goods. I think we've lost sight of what that means.
March 12, 2008 1:04 PM | Reply | Permalink
The Washington State congressional delegation has a long tradition of pimping for Boeing. The late Senator Henry Jackson was known as the "Senator from Boeing".
Let's remember that just a few years ago Boeing got caught promising an Air Force official a job for steering Boeing's proposed tanker lease proposal through the Air Force approval process. Boeing was also caught, some years back, bribing foreign military procurement officials.
Boeing, with its long incestuous military relationship, has no comparable USA competition, so I applaud the Air Force decision to go with the Northrup Gruman/EADS proposal.
March 12, 2008 12:25 PM | Reply | Permalink
Deos anyone know if HRC and BHO have different positions on this issue?
March 12, 2008 12:34 PM | Reply | Permalink
My main point, which didn't get posted with my original entry (technical glitch, probably my fault) was that Boeing engaged in a criminal enterprise in its first effort to win the contract. In addition, the Northrop Grumman/EADS team will build a factory in Alabama to build the planes (which will also get some work). The factory will also get some additional work building components for Airbus airliners. For its part, Boeing uses quite a few foreign suppliers, so the difference in American jobs will be much smaller than advertised. Fortunately or unfortunately, the aerospace industry has become a global business. If it could all be done in America, I wouldn't automatically against it, as long as we aren't being ripped off too egregiously, or -- as in the case of Boeing -- companies use criminal methods in pursuit of a deal. And as I said, the tankers may not be needed at all.
March 12, 2008 12:39 PM | Reply | Permalink
Thanks for confirming that the "criminal enterprise" portion wasn't in the original post. Upon my second reading I thought I'd missed it and posted a redundancy.
March 12, 2008 1:08 PM | Reply | Permalink
Sorry workerbee, the economic lesson was not directed at you!!! You can give me an economics lesson whenever you wish. :)
March 12, 2008 1:19 PM | Reply | Permalink
For how many years did many European countries buy mostly US fighter aircraft, US tankers, US AWACS, US helos, or US missile systems? (Many) Conversely, how many European helicopters do we operate in our military right now? (Many)
Like it or not, the arms industry has become an international one, and if the USAF says that the EADS tanker is better, why should we flyspeck their conclusion on grounds that have nothing to do with the merits and everything to do with rewarding arrogance and incompetence?
http://leeham.net/filelib/ScottsColumn030408_2.pdf
http://leehamnews.wordpress.com/2008/03/04/assessing-the-fall-out-on-the-tanker/
March 12, 2008 4:07 PM | Reply | Permalink
Didn't someone named Adam Smith, circa l776, decide that mercantilism was bad for a nation's health? Industrialists aren't going to improve their products without the incentive of competition - and if it doesn't come from down the street, it'll come from across the seas. Either way, it makes for better products.
March 12, 2008 4:14 PM | Reply | Permalink
I do not mean to pick on you Chris Brown but because I have particular knowledge about the aerospace industry, it might be important knowledge for you to know that Boeing is really not making that many new aircraft anymore and has diversified its business portfolio in other fields such as building the broder fence down in Texas. Mr Hartung your question of whether the tankers are necessary I think is a much mroe important question in regards to defense spending and waste in government. If we picked the better deal finacially speaking then I am all for it but unfortunately I am not sure it is as simple as that. Both Boeing and EADS have bad records in regards to meeting deadlines, of course this is nothing new in this industry but something that should be of some interest. Also as I understand it the EADS plane is a relatively new one to the Armed forces and one can imagine that with an new plane comes adjustment throughout the spectrum of maintence and all things associated with training. Obviously the military has familiarity with Boeing, so my question would be how much does the transition to this new aircraft cost in training and actual cost versus using similar systems that are already utilized by our armed forces? I am understand your point regarding the criminal nature of this bid initially and one might think that under normal circumstance this might get a little but more airplay.
March 12, 2008 4:21 PM | Reply | Permalink
Good post. Maybe the only good post in the thread.
March 12, 2008 4:53 PM | Reply | Permalink
What are the details that led to the selection of EADS instead of Boeing, and what part did the politics involved play?
March 12, 2008 6:31 PM | Reply | Permalink
The Air Force has testified to Congress that of the nine criteria the Air Force used to determine the winner in the $35b competition to supply new air refueling tanker aircraft, Boeing lost to the Northrop Grumman/Airbus bid on most, if not all, measures. Nonetheless Senators and Representatives from the states where Boeing has major plants are incensed; they want our armed forces to be equipped with the apparently less effective (smaller payload, shorter range) losing bid from Boeing.
The winning tanker will be based on the Airbus 330 commercial airliner, a plane more technically advanced than the Boeing proposal. Air Force Gen. Arthur Lichte said the larger size was key. "More passengers, more cargo, more fuel to offload,"
The US Air Force projects a need for longer payloads over longer ranges as it sees China, 18 hours away, as the next US antagonist. The Northrop-EADS refueling tanker, the KC-45A, "will revolutionize our ability to employ tankers and will ensure the Air Force's future ability to provide our nation with truly global vigilance, reach, and power," Air Force Gen. Duncan J. McNabb said in a statement.
According to Northrop Grumman the KC-45 Tanker program will support 25,000 American jobs at 230 supplier companies in 49 states. It will be assembled at Alabama's Brookley Industrial Complex in Mobile.
March 12, 2008 8:59 PM | Reply | Permalink
Wow. I can't believe I am typing this. I completely agree with John McCain. I need to shower now.
Also, thanks to the posters that recognize there is more at play than Boeing vs. EADS. The prime contractors and subcontractors are all affected by wins/losses. Trying to oversimplify to down to locations of (some of) the hardware manufacture also minimizes the roles of the evaluation teams that picked the winning proposal and their multiple priorities.
March 12, 2008 9:54 PM | Reply | Permalink
One thing I haven't seen mentioned in this thread is that Congress specifically passed a law that forbids the Pentagon from considering anything except "Is this the best weapon system for the best price?" If Congress wants to get all bent out of shape about defense contracts not being given to American workers then they should change that law. If they don't then they have no real business screaming about this issue. From what's been reported in the press the Airbus pitch beat Boeing's on five of six techincal categories. And beat the pants off Boeing, not just a close contest.
Bottom line, the Pentagon awarded the contract based soley on criteria set down in law by Congress.
March 13, 2008 9:11 AM | Reply | Permalink
SLOW DOWN, THERE IS NO NEED TO SUPPORT McCAIN ON THE CURRENT TANKER BID.
McCain supporters like to bring up the Tanker Coversion lease proposal. IT WAS REJECTED. Boeing would have rather had a new tanker then conversion program anyway. (The conversion plan was a Penatgon Proposal that had a twisted history not entirely involving tankers)That is not relevant to the current bid.
The question is who should build our next generation of tanker.
The bid was not awarded according to the specifications announced. The pentagon asked for a midsized plane. EAD bid OUTSIDE THE SPECIFICATIONS for a larger plan.
IF THE PENTAGON IS GOING TO APPROVE A LARGER PLANE THEY SHOULD AT LEAST GIVE BOEING A CHANCE TO BID ON THE LARGER PLANE. Boeing can give a proposal based on the larger 787 airframe and it will have or all the "advantages" the larger EAD plane had over the 767 based tanker also.
It will also tend to be less costly because the "added technology package" was Boeing designed and won't require modifications.
PS. The planes aren't just tankers.
March 13, 2008 12:52 PM | Reply | Permalink
Finally, an article that makes sense on this issue. The Lazy B offered up an inferior product and lost the bid, period. Before that , the bid was halted after Boeing engaged in criminal activity to secure the government handout. So what if Airbus is going to manufacture our tankers. They ended up offering a better airplane at a mauch better price. The military, like the rest of our society, already outsources just about everything else. If we resort to a beggar thy neighbor relationship with Europe, then this country will suffer even more.
March 13, 2008 11:01 PM | Reply | Permalink
Yes the Darleen Druyun affair was really bad, but not as bad as some EADS/Airbus scandals. Also, McCain does have a lot of EADS lobbyists on his campaign staff so there is some smoke there if not actual fire. Check out www.tankerblog.com for the inside story on the tanker issue.
March 21, 2008 9:52 AM | Reply | Permalink