Tanker contract cries for review
- Gresham Outlook - Opinion
The U.S. Air Force's decision to outsource internationally the manufacture of a product essential to the nation's defense is unsettling on a number of levels.
Oregon's U.S. representatives and senators ought to join with colleagues from Washington State and insist that Congress hold hearings on why Boeing recently lost a huge contract to build the next generation of Air Force refueling tankers.
Our objections to the contract winner - the European aircraft-maker Airbus in partnership with America's Northrop Grumman - go beyond mere xenophobia or even parochial concerns about the Northwest economy. It's true that Washington - and by indirect extension, Oregon - would benefit from the retention or addition of 44,000 high-paying Boeing jobs that would have flowed from the tanker contract.
But we also believe the entire nation loses when our government fails to support domestic manufacturing infrastructure that's essential not only for national defense, but for the creation of many other necessary products. When a $35 billion contract from the U.S. government is delivered to a foreign-held company, that can only accelerate the depletion of U.S. manufacturing jobs and send depressing ripples throughout other sectors of the national economy.
Another blow to U.S. industry?
Already, America is struggling to retain industrial jobs in the face of overseas competition. And it's not just lower wages in other nations that make it difficult for U.S. companies to compete. In this country, the cost of health care, for example, is a burden placed on employers. In many Asian and European nations, the government covers those expenses, giving companies such as Airbus a built-in cost advantage.
In this particular case, cost was only one of the deciding factors. Airbus reportedly was judged to be superior on capability and past performance. The European company can deliver 49 tankers by 2013, compared with 19 from Boeing by that date.
If these were two U.S. companies, we would say fair enough, Airbus is the winner. But the reality is that Airbus won't contribute to the nation's economy to the same degree that Boeing has in the past and will in the future - including right here in Gresham where a Boeing plant is located.
Airbus has promised to create U.S. jobs by assembling the tankers in Alabama - where, we might note, wages and costs are lower than in the Northwest. But that assembly in this country will occur only after the nose, wings and fuselage are built in Europe.
Invest in our own economy
On the question of past performance of the two companies, it's worth noting that the 600-tanker fleet now slated to be replaced was built by Boeing, starting in the Eisenhower era. Those tankers, which refuel other military planes in midair, have served the country's needs quite well.
It seems doubtful that in the 1950s, the Air Force would have considered contracting with a foreign manufacturer for a fleet of such staggering costs and dimensions. We concede that the world has changed dramatically in the past 50 years. This isn't the first military contract to be awarded to an allied nation - although it would be the largest. In fact, the contract could grow to 500 tankers and $100 billion over a period of decades.
That's an enormous sum for the U.S. government to invest in developing the capabilities of a European company and the international economy.
We believe such an investment would do more to advance our nation's interests and economy if this contract were kept at home. And we think that desirable outcome is well worth a congressional investigation.