By Paul Shearon Houston Chornicle
Americans have bailout fatigue.
When will the government bail out the average Joe or Jill? One test case for the Obama administration and a test case for change is to stop the government practice of rewarding foreign corporations that cheat our trade laws and then try to win lucrative federal contracts.
Theyve watched $700 billion go to the financial industry which continues to reward negligent CEOs with million-dollar bonuses but has failed to help average homeowners struggling with their mortgages. Theyve watched $85 billion go to two of the big U.S. automakers which are struggling while tens of thousands of workers still lose their jobs.
For instance France-based aerospace giant Airbus is using billions in what U.S. officials say are illegal subsidies to compete against Boeing for a $100 billion contract to build tanker aircraft for the Air Force a contract whose rules will be set in the coming weeks.
Boeing is competing with France-based Airbus for a multibillion-dollar contract to build aerial refueling tankers for the Air Force. In Texas around 3000 jobs are at stake.
About 44000 American jobs across the country are on the line.
In this case taxpayers dont need to write another big check to support U.S. workers the government just needs to support a fair competition.
Over the last few decades Europe funneled billions in subsidies to France-based Airbus to take billions in profits and hundreds of thousands of jobs from the U.S. Created in the 1970s with European government money Airbus surpassed Boeing in aircraft orders in 1999 but has continued to accept billions in subsidies in an effort to take even more jobs from American manufacturers.
The EU has argued that the U.S. provides similar money to U.S. aerospace companies but international law experts agree that regional tax credits and research and development funds (both of which Airbus also receives) are permissible under the trade laws and dont constitute the kind of blatant violations as do the European subsidies to Airbus.
An overwhelming bipartisan majority in Congress has supported the U.S. Trade Representatives World Trade Organizations lawsuit against the European Unions subsidies the largest international trade lawsuit in history.
But just last year in a controversial decision that was later overturned the Air Force attempted to outsource its $100 billion tanker contract to Airbus which financed its tanker design using $5 billion of the same illegal government subsidies.
Considering that Europe has declared an aerospace trade war against the U.S. its surprising that the Pentagon would even consider outsourcing the tanker contract to Airbus. After all France barred Boeing from competing for a similar contract in 2004 handing it to Airbus. But more importantly independent measures showed that Boeings proposed KC-767 tanker was superior to the Airbus tanker on nearly every metric.
Compared with a fleet of Boeings KC-767s under real-mission circumstances a fleet of the much larger Airbus KC-30 aircraft could offload far less fuel and according to the Government Accountability Office is much less survivable in combat. Since its larger and heavier airframe is designed more for carrying passengers and cargo it guzzles fuel and would cost $40 billion more than the KC-767. Airbus KC-30 is so large it wouldnt even be able to land and operate out of many smaller airfields in the Pacific and the Middle East without billions in infrastructure upgrades.
Its hardly surprising that Boeing produced a superior tanker the U.S. aerospace industry is at the top of its game long contributing the only trade surplus of any American manufacturing sector. Yet news reports show that Airbus was able to use a combination of subsidies and back-room lobbying tactics to grab the contract. Why didnt the best plane win? Because the deck was stacked.
President Obama then campaigning in Pennsylvania in 2008 said he found it hard to believe that an American company that has been a traditional source of aeronautic excellence would not have done this job."
U.S. aerospace workers arent asking for a bailout or protectionist Buy American provisions. Theyre only asking for a fair competition. Then let the best plane win.
Shearon is the secretary-treasurer of the International Federation of Professional and Technical Engineers.
