Published: 04-25-08
Colby Adams reports on Boeing’s battle for a lucrative American military contract the British jobs at stake – and why the state of Alabama seems on our side
IT TOOK more than five years of planning and millions of dollars spent to pull off a major coup. However in retrospect it was never going to be easy.
In late February the European Aeronautic Defence and Space Company and North American Northrop-Grumman finally secured a $35 billion contract over heavy favourites Boeing to replace the United States Air Force’s ageing tanker fleet with 179 new refuelling aircraft.
Their victory could provide a significant boost to Britain’s manufacturing base because the wings for the EADS plane – a variation of a previous Airbus design – are to be manufactured at existing plants in Filton near Bristol and Broughton north Wales. The contract will inject £3 billion into the United Kingdom economy while supporting nearly 13000 British jobs according to the Society for British Aerospace Companies. The wings will then be shipped to a final assembly plant that Northrop says it will build in Mobile Alabama.
The Northrop-EADS tanker will have a British content of around 20 per cent.
Yet Chicago-based Boeing – the loser in the tanker bid battle – would prefer those wings to be built at its Everett factory in Washington state. The company filed a formal protest against the US Air Force’s decision on March 11. Now Northrop-EADS must await the results of a congressional inquiry into the contract – a review that will directly affect 13000 British manufacturing jobs when it is completed by mid-June.
The US Air Force and its successful bidder filed separate motions to dismiss Boeing’s claims but the Government Accountability Office – a congressional investigation agency – rejected both of those motions in an April 3 hearing. It issued a stop-work order on construction of the Northrop assembly plant in Mobile and will now examine the contract in light of Boeing’s accusations the Air Force used unfair standards in choosing EADS’s larger aircraft over Boeing’s own proposal the KC-767.
In questioning the circumstances that led to the Air Force’s decision Boeing leaders pointed to what they labelled numerous irregularities in the selection process. In particular they complained Northrop was rewarded for providing features in its design not specifically mentioned as necessary by Air Force procurement officials in the initial request for proposals.
‘The fact that the Air Force gave Boeing the highest possible rating in mission capability and cited the KC-767 Advanced Tanker as having three times more strengths than the Northrop-EADS tanker further highlights the inconsistencies in the selection process’ said Mark McGraw Boeing’s tanker programme manager.
He also criticised what he called a “lack of feedback’” during the submission phase as well as a “significant levelling of Northrop’s projected costs at the 11th hour”.
Northrop spokesman Randy Belote defended the military’s decision. “The fact that Boeing officials are suggesting that the Air Force entered into some sort of criminality with the scales and the numbers is outrageous” he said.
Following the February 29 Air Force announcement that it had selected Northrop Grumman to build and deliver the new fleet supporters of the losing bidder spread misinformation about the basis for the Air Force’s decision he alleged.
Awarding the largest defence contract in recent US history to a team that includes foreign manufacturers always promised to ruffle feathers inside the US government.
But the contract has forged some unlikely alliances. Among Northrop’s strongest supporters in Congress Alabama lawmaker Jo Bonner has defended the Air Force’s decision with effusive praise. It emerges that Britain and Europe have more in common with Alabama than previously thought:
“After the most rigorous fair and transparent acquisition process in the history of the US Department of Defence the Air Force made what it determined to be the best choice for the warfighter” Bonner enthused on March 13.
Northrop has said the plant will create at least 1500 new jobs in Mobile.
The ultimate course of the tanker contract may even influence the presidential election especially in terms of talking points in the debates.
Although most Britons lean to the left of Americans it was Senator John McCain the Republican presidential nominee whose investigation killed the original contract awarded to Boeing in 2001. McCain’s inquiry led to the resignation in 2003 of Boeing chief executive Phil Condit and the conviction on corruption charges of Pentagon weapons buyer Darleen Druyun who admitted to illegally assisting Boeing in securing billions of dollars worth of defence contracts including the tanker deal.
For his part Illinois Senator and Democratic presidential candidate Barack Obama has voiced moderate concerns over the Air Force’s decision to award the contract to a consortium that includes European companies instead of to Chicago-based Boeing.
While campaigning in Pennsylvania he said: “I don’t mind the Pentagon procuring from other countries but when you’ve got such an enormous contract for such a vital piece of our US military arsenal it strikes me that we should have identified a US company that could do it.”
Obama’s condemnation wasn’t strong enough for the local branch of the Machinists Union in Everett Washington where Boeing would have built the tankers’ wings. Its members have endorsed Hillary Clinton.
“Maybe Senator Obama doesn’t mind the Pentagon procuring from other countries but I sure as hell do” union president Tom Buffenbarger told the Everett Herald.
Colby Adams is a senior defence researcher for Foresight News USA
