Despite the millions spent by EADS on lobbying, Boeing came out on top. | AP, Reuters Photos
Posted on 02/24/2011 9:26:11 PM PST by sukhoi-30mki
Millions spent on tanker lobbying
By: Chris Frates
February 24, 2011 09:24 PM EST
For a decade, the world’s two largest aerospace companies fought a bitter battle to build the next fleet of Air Force refueling tankers, a fight that’s likely to continue at least at the political level even after Thursday’s announcement that Boeing bested EADS for the $35 billion contract.
Both sides have spent millions of dollars working to convince lawmakers and opinion leaders of their plan’s superiority and there’s too much political capital invested for any of the players to just walk away – even if EADS were to pack it in.
Lawmakers are “going to want to at least appear that they’ve done everything they can to get the contracts to their home districts so there’s a virtual guarantee of protest,” said aircraft industry analyst Richard Aboulafia. “This has achieved a political life of its own outside the companies and there’s an awful lot that’s going to happen at the political level because the politicians on both sides have to show that they’re … fighting for jobs in their districts.”
Boeing has spent more than $52 million lobbying since 2008. EADS and Northrop Grumman, who partnered with EADS until 2010, spent almost $44 million in 2008 and 2009. And last year, EADS spent $3.2 million, according to the Center for Responsive Politics, which tracks money in politics.
But Boeing also had a powerful ally in the International Machinists and Aerospace Workers Association. EADS planned to build its tankers in Alabama, a state that doesn’t rely on union labor, while Boeing plans to assemble its planes in Washington state. Since 2008, the union has spent more than $5 million on lobbying expenses.
“This is a lot of work for many, many, many years,” said the union’s general vice president Rich Michalski. “This is $4 billion of generated income for American workers per year.”
The tanker fight also produced a bevy of print, radio and online advertising as the companies jockeyed to win the public relations war. Boeing outspent EADS on inside-the-Beltway print advertising. Since January 2010, Boeing spent $5 million, more than double EADS $1.7 million, said Evan Tracey, president of the Campaign Media Analysis Group, which tracks advertising buys.
The lobbying wasn’t directed at the Pentagon but rather focused on winning over lawmakers who could in turn pressure the Obama administration.
Boeing lobbyists worked to convince lawmakers that the $5 billion research and development subsidies that EADS, a European company, receives from the French government unfairly helped drive down the cost of their planes, according to a lobbyist familiar with Boeing’s efforts.
And just last week, the four senators from Washington and Kansas, states that will benefit from the Boeing contract, held a press conference to urge President Barack Obama to take the subsidies into account.
The company also worked lawmakers in states with a Boeing connection – a place where the American aviation giant had a distinct advantage over its European-based competition.
“On the grassroots front, it’s not really a fair fight,” said the lobbyist. “EADS has a lot of press release presence, but not a lot of physical presence.”
In fact, EADS was preparing for a tough fight on Capitol Hill if they had won the contract, said a lobbyist working on the company’s behalf.
“Our expectation was that Boeing was going to protest and enlist political pressure to overturn the decision and we would be fighting a hand-to-hand battle on the Hill,” the lobbyist said. “It was clear by their activities over the last six months they were going to try to either legislatively or politically try to undo an EADS win.”
And EADS had enlisted its own political friends, especially on the Gulf Coast. Republican Govs. Robert Bentley of Alabama, Haley Barbour of Mississippi and Bobby Jindal of Louisiana fired off a letter to Obama asking him to ensure “parochial interest group pressures” didn’t influence the outcome of the bid.
Up until Thursday’s decision, EADS had been focused on arguing the merits of its proposal, namely that it had a superior product that would create about the same amount of American jobs as Boeing, said a lawyer familiar with EADS’ strategy.
“This has been much more about getting the messages out. It certainly has political dimensions, but it’s much more about the messaging and public relations then it is about what you and I would think of as a lobbying battle,” the lawyer said.
Sources familiar with EADS could not say whether EADS would protest the decisions and a company representative did not return a call seeking comment.
But any public announcement is unlikely until the Pentagon briefs both companies on how they made the decision to go with Boeing.
Jen DiMascio contributed to this report.
Despite the millions spent by EADS on lobbying, Boeing came out on top. | AP, Reuters Photos
I think Boeing will make a better product and I would rather have more of it made in the U.S. After the lease deal they should be giving the country several of those tankers for free.
A lot of heat from both sides on FR tonight. Many don’t seem to know much about the respective benefits of each tanker.
I don’t either. What I do know is that the tankers are long overdue and the sooner either one gets to the pilots the better.
Whoever has some concrete facts on one over the other, I would love to hear fact over opinion.
This probably ensures that Patty Murray will die in her Senate office, at age 102.
While this was a dramatic mess, when it came down to it. Boeing had the most versitile, faster, and more fuel efficient product.
Also doesn’t hurt that at least 80% of the plane’s parts are manufactured in the US, where as the Airbus/NG plan would have less than 60% manufactured in the US. The Airbus plane would be 25% heavier and require a lot more fuel.
Plus all those billions will be going to a US company, not most of it going back to France. That’s the icing on the cake.
She’s senator for life, even if Airbust won.
During an election were almost all those who voted for Obamacare lost, Patty, who was also one of the chief designers of Obamacare, won re-election.
When it comes to federal, governorship, and mayor of Seattle, its a one-party state here now. Too many liberals in King county who vote dem, no matter how much of a disaster politicians like Gregorie, Cantwell, and Murray are.
Between Murray and the Governor it is amazing the lights even stay on in this state.
If you don’t pay off the politicians and their lobbists you don’t get the business. Look what happened to Microsoft, when they didn’t have a Lobbist in DC - they wpent years and millions defending themselves againist the Gov regardig them being a monopoly.
Have followed this..and am disappointed, but then what else is new and not disturbing out of this administration?
The MEDIA coverage RARELY spoke of new jobs being created in the US claimed early on by France's Pres. Sarkozy and showed annoyance with Obama's staging of a delay til after Nov. elections.
Machinists Union District Lodge 751 rejoice --easy to decision to make..so obvious!!
Published February 4, 2011 Labor Relations: "District 751 leaders are strongly supporting U.S. Sen. Maria Cantwell’s calls for an investigation into how the mix-up of tanker bid data – which resulted in an analysis of Boeing’s data being sent to Airbus and vice versa — has affected the bidding.
Four years ago Congress killed plans to spend $23.5bn on 100 Boeing tankers after an investigation led by McCain. Darleen Druyun was jailed for negotiating a position with Boeing while still working as an air force procurement officer. Druyun was given a nine-month prison sentence for negotiating a $250,000 job with Boeing, which also hired her daughter and son-in-law, while still overseeing the company's contracts with the Air Force. The man who gave her the job, Boeing's finance chief Michael Sears, was also jailed.
Blows over, nothing changes....
Well the USAF isn’t going to see a new Boeing tanker anytime soon. (Decade plus)
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