Posted on 11/13/2003 1:45:56 PM PST by Willie Green
For education and discussion only. Not for commercial use.
On November 7, the U.S. House of Representatives passed the conference report on the 2004 Defense Authorization bill (H.R. 1588) with a much weakened version of its "buy American" program. Under the original proposal as crafted by House Armed Services Committee Chairman Duncan Hunter (R-CA), all critical components in a weapon system would have had to be American-made and the overall system had to be 65 percent American. Those two requirements were eliminated under intense pressure from the Bush Administration, whose commitment to the recovery of American manufacturing has now been clearly shown to be phony.
The defense bill still calls for the Pentagon to produce a study assessing how much the United States depends on foreign suppliers and to provide incentives to encourage contractors to use American machine tools, the building blocks of all manufacturing. The current 50 percent American-made requirement for weapons was retained. Under the approved provisions, the Pentagon would have to create a Defense Industrial Base Capabilities Fund to ensure that the domestic industrial base can manufacture all critical military components. The Pentagon also would have to stop buying from any countries that have refused to deliver military supplies because they objected to U.S. military operations.
Rep. Hunter should be commended for moving the issue forward, even if only a small distance. The Pentagon study on foreign suppliers will have to be closely watched as neither the DoD bureaucrats nor the prime defense contractors want the facts known about how far “globalization” has already gone to weaken the domestic integrity of the nation´s defense industrial base. The battle over the defense bill this year was conducted mainly behind closed doors, the arena in which big business is most comfortable. Corporate managers are well aware that if the public knew how they were conducting their business, without the faintest regard for the prosperity or security of the United States, the political backlash would be irresistible.
Boeing, the largest defense contractor in the United States, led the fight against the Hunter initiatives. One motive is a desire to integrate its commercial and military supply-chain on a global basis. Shortly after the weakened defense bill passed the House, it became known that Boeing plans to hold a conference in Beijing next week with its Asian suppliers (mostly Chinese) to discuss the design and construction of its new 7E7 jet. The 7E7 is to be a super-efficient, long-range aircraft pushing the edge in aviation technology. The plane is scheduled to debut in 2008.
Boeing China president David Wang was quoted in China Daily as saying that Boeing wants more Chinese participation in the program because it sees Beijing as a strategically important part of its globalization strategy. Boeing has forecast that China will need nearly 2,400 new airliners, worth $197 billion, over the next two decades. To capture this market, “Boeing should become more Chinese in China,” said Wang, “Twenty years from now, China will view Boeing as a global China brand, not just a global brand....We must be more Chinese in our leadership, in content... have more designs, capability coming from China in the long term.”
Thus, Boeing in America lobbies for more foreign content in its U.S.-produced aircraft, even those it builds for the military, but Boeing in China is committed to more Chinese content in the planes it builds there. It would seem Wang is correct, Boeing is well on its way to being more of a good corporate citizen of China than of the United States.
Boeing is also negotiating with Chinese partners to establish a $100 million repair, modification and maintenance joint venture in Shanghai. Both the production and maintenance of advanced aircraft in China involves a substantial transfer of technology and the skills needed to it into top-line equipment; knowledge that is easily translated from commercial to military industry. The problem with high-tech outsourcing is not just that the United States will become dependent on the supply of critical components than could be cut off in a crisis, thus crippling the American armed forces; but that the transfer of the information needed to produce the critical components will help arm a future enemy and increase the risk of war.
For example, the White House has agreed to allow Boeing to transfer two 737-800 aircraft to China that contain the QRS11 computer chip their navigation systems. The chip has the potential to be used for military applications, such as in missile guidance systems. The chip is on the restricted Munitions List and should require an export license, but the State Department has given Boeing a pass. The House International Relations Committee has raised questions about this transaction, but will likely have no more success is constraining Boeing than did the House Armed Services committee.
Boeing CEO Phil Condit is also the head of the Business Roundtable (BRT). The BRT spearheaded the campaign to win most favored nation trading status for China. As part of its lobbying effort, the group published a booklet on “Corporate Responsibility in China.” The report was filled with examples of how BRT members were helping to build China's industrial base, endowing it with advanced technology and more productive methods. For example, “Rockwell has established industrial automation training laboratories in 10 of China's better universities” and “was the first foreign company to install an in-house automation technology training lab in a Chinese state-owned enterprise.” Honeywell Aerospace proclaimed its “unprecedented” agreement with Aviation Industries of China (AVIC) which manufactured both military and civil aircraft, missiles, engines, advanced materials and other items. Honeywell boasted how it provides extensive training for AVIC's “best engineers” including bringing them to U.S. plants to learn about American technology firsthand.
It seems that Boeing and other transnational corporations are running their own foreign policies, for its own purposes, while the Bush Administration looks the other way. When Congress comes back from its holiday recess, it must take another, stronger crack at these rogue corporations who are so eager to please foreign governments and shed their American allegiances that they can no longer be trusted. Indeed, it is now best to assume from the start that corporate and national interests are no longer in concert.
William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.
Mulally: Global Boeing must share
"...We just operate everywhere," he said. "We need to include everybody around the world in the asset utilization. They buy our products and pay up. We can't just extract wealth from other countries and pay ourselves.
"And the United States has no divine right to our standard of living," Mulally added, defending Boeing's overseas parts production. ..."
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