Air Force ought to invest in the U.S.


The U.S. Air Force's decision to outsource 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 American company 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 through other sectors of the national economy. Already, the U.S. 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 American 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 Portland. Airbus has promised to create U.S. jobs by assembling the tankers in Alabama - where, we might note, wages and costs are lower than here. But that assembly will occur only after the nose, wings and fuselage are built in Europe.

We concede that the world has changed dramatically in the past 50 years. This isn't the first military contract to be awarded to a foreign company - 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 outcome is worth a congressional investigation.