Skip to comments.Senators: Force Pentagon to consider subsidies in tanker
Posted on 12/16/2010 4:29:00 AM PST by sukhoi-30mki
Senators: Force Pentagon to consider subsidies in tanker
Amid increasing speculation that EADS North America will win the U.S. Air Force's $35 billion aerial refueling tanker contract, Boeing-friendly senators Wednesday called for forcing the Pentagon to account for illegal subsidies in the competition.
A World Trade Organization panel ruled earlier this year that European nations illegally subsidized Airbus programs, including the A330, which is the basis for EADS North America's proposed KC-45 tanker. A separate WTO panel found in a confidential interim ruling that Boeing also received illegal subsidies, although those were reportedly much less than those that Airbus got.
"The simple truth is that we won't have an even playing field in this competition until the impact of illegal foreign subsidies are factored in," Sen. Patty Murray, D-Wash., said in a news release. "The U.S. government and the World Trade Organization have both come to the conclusion that these subsidies give Airbus a competitive advantage and that they have cost us American jobs. Especially in this economy, the Pentagon can't ignore these subsidies that leave American aerospace workers fighting an uphill battle."
Sen. Maria Cantwell, D-Wash., said: "We cannot have a foreign subsidized plane low-balling its bid in a competition for one of the largest defense contracts in U.S. history."
The Washington Democrats called for including a requirement to consider subsidies in the defense budget under consideration. Sens. Sam Brownback and Pat Roberts, both R-Kan., Kit Bond, R-Mo., and Debbie Stabenow, D-Mich. also signed the letter to Senate Armed Services Chairman Carl Levin.
Here's the text of the letter:
We write to express our strong support for language to ensure a fair competition for the KC-X Air Force tanker contract in the Fiscal Year 2011 National Defense Authorization Act. Especially in this economic climate, Congress should act to protect American aerospace jobs from unfair competition and to restore fairness for our aerospace workers.
In particular, we urge you to include section 848 of H.R. 5136, which was passed by the House of Representatives on May 28, 2010. This section requires the Department of Defense to take into account the impact of illegal subsidies on the KC-X tanker competition. Section 848 requires the Department of Defense, in awarding that tanker contract, to consider any unfair competitive advantage aerospace companies may possess.
The House of Representatives has already demonstrated strong bipartisan support for this language. Section 848 passed in the House as an amendment to the National Defense Authorization Act by a vote of 410-8. We strongly urge you to retain section 848 in any final version of the Fiscal Year 2011 National Defense Authorization Act.
Thank you for your continuing work on behalf of the men and women of the U.S. Armed Forces. We look forward to working with you in the days ahead to pass a defense authorization bill in this Congress that ensures a level playing field for the Air Force KC-X tanker contract.
For Pete’s sake, can’t they let the Air Force get on with acquiring their new tanker? It’s obvious they consider the Airbus a superior platform and have since the beginning.
Why is a foreign-made offering even in consideration? If US taxpayers are footing the bill then the damn thing should be made in the US.
It’s not the first foreign system to be considered by the US. And the Airbus product will have to be built in the US-like all earlier foreign weapons purchased by the US. The Airbus offering, if selected, will be built in Mobile, Alabama.
Who's cryin' now?
The US is the world's biggest exporter of weapons, and would like to continue that. The JSF program would collapse without foreign sales. Makes no sense to give US warriors the inferior aircraft, and piss off JSF customers that are already looking for a way out
Boeing aircraft have a large amount of foreign content, the Airburst tanker has a large amount of US content, and will be assembled here. FINALLY, Obama has a real jobs program.
As far as subsidies...the EU subsidies make the aircraft cheaper...GREAT!!
If we can get the poor European taxpaying schlub to help pay for our airplanes, what’s not to love?
Not to mention all of the F-4s F-5s, F-16s, C-130s E-2s C-17s, and AH-64s and more that we have sold to NATO allies.
The Air Force made mistakes in the selection process to replace the KC-135 tanker (mid-size). The Air Force made mistakes in weighing criteria that had nothing to do with the RFP and fell outside the scope of the mission. In addition, the cost of the Airbus offer was artificially low (http://www.nytimes.com/2010/07/22/business/global/22wto.html ).
If the Air Force wants a bigger tanker to replace the KC-135, then they should have released an RFP that reflected that requirement and Boeing would have bid a 777-tanker. Instead, the Air Force assured Boeing their offer was in accordance with an RFP for a mid-size tanker and no additional points will be awarded for a larger tanker. Seems they were not truthful.
They did not adhere to their own requirements for a mid-size tanker and erroneously selected a large tanker that would be more suitable for a KC-10 replacement and did not meet many of the threshold requirements. (There is reasonable belief in the Pentagon the decision is being influenced by The One to payback his European allies).
I prefer to buy American when we can, especially when buying American assures us a critical national security asset-—easy to imagine the french stopping manufacture/deliveries if the US decides to defend its national security and the french disagree.
Unlike you, I would rather avoid giving the french veto authority over US military action.
Whats not to love?
See Post 11.
“Illegal. Unfair business practice when you don’t have to pay for your R&D and launch costs. “
So does Boeing. NASA does pay for Boeings R&D. And WTO considers this a illegal subsidy too. Didn’t you notice that demorat Murray was only concerned about “illegal FOREIGN subsidies”. Boeing could have been much cheaper then EADS with their vintage 767 offering, but they tried to rip off the taxpayer. Boeing deserves to loose this contract.
Boeing has to factor in the NRC into every proposal. That raises the cost of the product. Each time. Every product.
Airbus did not have to do that. Airbus NRC were covered by the subsidies AND they can bid at no profit (and did). Boeing cannot do that as a publicly-owned company.
Basic business. It cost you X-dollars to design and build a jet, therefore, you factor in the cost of those X-dollars into the final price. If you didn't, you would go bankrupt.
Airbus designs and builds a jet and they don't have to factor in those costs, no big deal to you.
Huge unfair competitive advantage.
But hey, if you have no problem with the french controlling a significantly important strategic asset of the US, thereby having an essential veto over US decisions, knock yourself out. Most Americans would rather the french have no say over US national security. Apparently you disagree.
“But hey, if you have no problem with the french controlling a significantly important strategic asset of the US, thereby having an essential veto over US decisions, knock yourself out”
The french don’t have a veto or anything like this. France has nothing to do with it at all. EADS (Airbus) is located in the Netherlands. Boeing and Airbus are the two remaining companies of the western hemisphere that build this kind of aircraft. So if you want to get ripped off by Boeing feel free to send all your money and your monthly paycheck to:
The Boeing company
100 North Riverside
Chicago, Illinois 60606