tanker saga won’t finish topping up

Posted on March 12, 2008

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Just watch as Republican presidential nominee John McCain gets slapped with the blame of US aerospace company Boeing losing a $35 billion contract to European rival European Aeronautic Defense and Space Company (EADS), to supply the US Air Force with new aerial-refueling planes.

Never mind that EADS won fair and square as they listened to what the Air Force wanted and came up with a better, cheaper and more cost-efficient aircraft than Boeing. Facts are facts and there is no point for silly, calculating politicians to argue against them. EADS’ tanker is bigger, can carry more of everything that matters — fuel, cargo, passengers — and they could also be delivered more quickly.

Apparently, Boeing, which had provided the Air Force with tankers in the past, was so confident of its win that it got arrogant. In contrast, EADS was eager to please and put its money where its mouth is by splashing on a $100 million prototype to demonstrate its proposal to the Air Force.

Politicians, especially Congressional Democrats, have been quick to point a finger at McCain and build a case against him for being the point man that broke up an earlier Boeing-Air Force tanker replacement deal in 2004 after allegations of corruption surfaced, leading to the present result.

McCain should not crumble and backtrack on his role that exposed the scandal. In the details that were unearthed, one of the Air Force’s top weapons buyer was found to have channeled deals to Boeing in an effort to get high-paying jobs there for herself and her family members. That led to the collapse of the contract for Boeing to be the supplier of the tanker and opened it up, which could ultimately be worth as much as $100 billion, to a new round of bids.

McCain is also being targeted for having advisers who had worked as lobbyists for EADS. Thomas Loeffler, McCain’s campaign co-chairman, Susan Nelson, the campaign finance director, and William L. Ball III, were part of the lobbying firm, the Loeffler Group, which worked for EADS, says the New York Times. There are yet other McCain campaign staffers who had worked in other firms lobbying on EADS’ behalf.

Protectionist and anti-trade politicians had bought into Boeing’s argument that the deal would put a huge military contract into foreign hands and cause an American company and its employees to suffer. But an examination of the details does not quite bear this argument out.

General Electric will be the engine supplier of EADS’ tanker, while its assembly will be carried out in Alabama. Northrop Grumman, which is also an EADS partner, would hire engineers in Florida to work on the aircraft. Although Boeing had claimed that its winning of the contract would create or support 44,000 jobs versus 25,000 jobs by EADS, analysts said these numbers are tough to verify.

Boeing is hardly bleeding. Its commercial division has been doing splendidly and has its hands full working on delivering planes such as its 767 to commercial airlines. No layoffs are expected at its plants, despite the loss of the Air Force contract.

But Boeing is proceeding with its protest of the Air Force’s decision, claiming that specifications were changed in the middle of the bid. Its quest seems quixotic and would only delay the replacement of old tankers.

The government has to stand firm on its decision and not be swayed by irrational anti-trade rants by politicians eyeing only short-term gains. Caving in to their demands would only further disadvantage taxpayers who would be left shouldering the burden of paying more for a lesser craft. The Air Force would also be at the losing end for having to use an inferior aircraft. And the US could potentially suffer, especially its businesses, if foreign governments responded by putting up protectionist barriers against US companies in retaliation.

Democrats really should remember that a rising tide floats all boats and not go overboard in persecuting McCain and fighting for Boeing’s cause. They could end up jeopardizing a better deal for both the Air Force and taxpayers.

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