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Air Force goes European with new refueling planes
Hot Air ^ | March 01, 2008 | by Ed Morrissey

Posted on 03/01/2008 7:42:30 AM PST by jdm

The Air Force snubbed longtime partner Boeing and awarded a lucrative contract to Northrop and EADS, the European maker of the Airbus, to build a fleet of refueling aircraft. The decision stunned Boeing and elected officials in the Northwest, who immediately objected to the decision to reject the all-American option. However, officials claim that Boeing’s submission simply didn’t measure up — literally:

Air Force officials offered few details about why they choose the Northrop-EADS team over Boeing since they have yet to debrief the two companies. But Air Force Gen. Arthur Lichte said the larger size was key. “More passengers, more cargo, more fuel to offload,” he said.

“It will be very hard for Boeing to overturn this decision because the Northrop plane seemed markedly superior” in the eyes of the Air Force, said Loren Thompson, a defense industry analyst with Lexington Institute, a policy think tank. And as the winners of the first award, EADS and Northrop are in a strong position to win two follow-on deals to build hundreds of more planes.

Boeing spokesman Jim Condelles said the company won’t make a decision about appealing the award until it is briefed by Air Force officials. Boeing believes it offered the best value and lowest risk, he said.

Stifel, Nicolaus & Co. analyst Troy Lahr said in a research note it was surprising the Northrop-EADS team won given the estimated $35 million per-plane savings offered by Boeing. Lahr estimated the Boeing aircraft would have cost $125 million apiece. “It appears the (Air Force) chose capabilities over cost,” Lahr said.

In short, Boeing gave a better price, but Northrop/EADS gave more capabilities. It can deliver more fuel or carry more personnel and/or cargo, depending on configuration. That may be a rational trade-off, and the Air Force is the organization best positioned to make that choice. They understand what their missions require and should know which airframe best complements them.

Appeals rarely if ever work, as the GAO assumes the client (Air Force) knows what it’s doing. It will only have a chance of succeeding if Boeing can demonstrate that the Northrop/EADS offering does not meet the specifications demanded in the RFP, or if the competing bid has unfair pricing or other violations of the process. And even then — as I know from personal experience — Boeing is unlikely to succeed, and could damage their chances for future contracts.

In the mid-1980s, the FAA put out an RFP for a system to completely replace the air-traffic control system across the nation. Two companies got selected to compete for the prime contractor position, IBM and Hughes Aircraft. The spec had three bedrock requirements: the system had to use all-new components in the ATC suite, it had to be functional at the time of submission (no mock-ups), and it had to use IBM’s computer as its core. IBM was required to give Hughes its at-cost pricing to ensure fairness.

IBM won that contract, as it bid significantly lower costs than Hughes. After the debriefing, Hughes found that (a) IBM had priced its core higher for us than for them, (b) their model reused existing components in the ATC suite, and (c) they didn’t have a working system. Hughes appealed the decision, which was considered something of a scandal in its own right at the time, but got overruled.

Three years later, IBM gave up on the contract, admitting that it could not produce the system. By that time, Hughes had sold its system to Canada, as well as other nations, while the US remained reliant on ATC computer systems dependent on tubes.

If that deal didn’t cause Congress to demand a redirected result, this one won’t, either. Congress may have the Air Force explain their decision to send some of their procurement budget to Europe rather than employ Americans, but unless someone turns up corruption or compromised safety, the decision will likely stand — and it might just be the best decision in any case, at least in terms of support for the missions the Air Force has to accomplish.


TOPICS: Business/Economy; Foreign Affairs; News/Current Events
KEYWORDS: aerospace; airforce; boeing; defensecontractors; defensespending; dod; eads; euro; northrop; planes; usaf
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To: dragnet2
I have no idea whether this decision is a good one or not, though I doubt the Air Force would be stupid enough to shoot themselves in the foot. I do believe in getting the facts right and after the Dubai ports deal I have learned that people are easily swayed when deeply held preconceptions are reinforced with a little misinformation.
101 posted on 03/01/2008 9:22:50 AM PST by SoCal Pubbie
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To: SoCal Pubbie
I have no idea whether this decision is a good one or not, though I doubt the Air Force would be stupid enough to shoot themselves in the foot.

I tend to agree. And this is a major plus for California. So....

102 posted on 03/01/2008 9:24:07 AM PST by dragnet2
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To: nyconse

Last time I checked, Northrup is an American company. Read the fine article. America works because of competition. If Boeing and people like yourself can’t accept that, you deserve what you get.


103 posted on 03/01/2008 9:24:14 AM PST by dr_who_2
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To: dr_who_2
ast time I checked, Northrup is an American company

Specifically, a California based company.

104 posted on 03/01/2008 9:25:18 AM PST by dragnet2
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To: nyconse
Arkansas is next.

Link

25 more states to go.

105 posted on 03/01/2008 9:26:03 AM PST by FreeReign
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To: hoagy62; nyconse
Never mind the economic standpoint of Boeing’s loss...what about seeing this from a NATIONAL SECURITY standpoint? If it flies for AMERICA, build the WHOLE DARN THING in AMERICA!!!

Never mind the facts, just use emotion and empty rhetoric!

http://www.boeingchina.com/en/aboutboeing/chronology.shtml

106 posted on 03/01/2008 9:28:24 AM PST by palmer
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To: nyconse
Next is California.

Link

24 more states to document.

107 posted on 03/01/2008 9:28:55 AM PST by FreeReign
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To: FreeReign
24 more states to document.

Please don't spam the thread.

108 posted on 03/01/2008 9:30:06 AM PST by palmer
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To: jdm

How stupid is this? If the Republicans had any shred of possibility for winning in November, the Air Force idiots just blew it away. As a result, the Dems will come in and cancel the contract and refuse to build any more planes or spend another dime on the military.
A
Makes me wonder how safe we are with idiots like this running the Air Force. Obama has decreed that he won’t even spend a cent on military research much less equipment and supplies. Aren’t they listening? Is anyone?

Cover your ears. Hillary is going to be all over this like a rash. And McCain can’t defend it.


109 posted on 03/01/2008 9:30:34 AM PST by Veto! (Opinions freely dispensed as advice)
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To: nyconse

I would go further and say that if you think McCain and the Republican’s platform in Ohio could be summarized as “we want to make Boeing be the next GM and the state of Ohio the next Detroit”, then they certainly wouldn’t get my vote.


110 posted on 03/01/2008 9:36:16 AM PST by dr_who_2
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To: hoagy62

Things have progressed some now. We routinely run simulators of automated equipment with a snooper that looks for unused lines of code. We run the unit through all of the parameters and errors and then look for stuff that was never used. Cuts way down on the search.


111 posted on 03/01/2008 9:37:10 AM PST by mad_as_he$$ (John McCain - The Manchurian Candidate? http://www.usvetdsp.com/manchuan.htm)
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To: Hillarys Gate Cult
I like the 747 idea. There are hundreds of them around that could be refurbed and put into service.
112 posted on 03/01/2008 9:39:14 AM PST by mad_as_he$$ (John McCain - The Manchurian Candidate? http://www.usvetdsp.com/manchuan.htm)
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To: nyconse

We are only up to the "M's", I could go on.

113 posted on 03/01/2008 9:41:00 AM PST by FreeReign
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To: dr_who_2

“Linking the fate of the Republican party to that of a defense contractor is a dubious form of patriotism.”

That’s corporatethink. Republicans ought to try some Humanspeak, like “We’re keeping thousands of jobs here in the USA.” That’s what wins elections.

The USAF contracting office did not work hard enough with Boeing to negotiate the best plane at the best price. Government agencies are notoriously bad at negotiating.


114 posted on 03/01/2008 9:41:44 AM PST by Veto! (Opinions freely dispensed as advice)
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To: Brilliant

The cost changes that will be added through the change order process will equalize any of the concerns you note.


115 posted on 03/01/2008 9:42:22 AM PST by Shanty Shaker
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To: palmer
Please don't spam the thread.

Your post is spam. My posts document jobs created. You have a problem with that?

116 posted on 03/01/2008 9:42:37 AM PST by FreeReign
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To: nyconse

You won’t vote for a Republican, you can’t vote for a Dem (I assume) and Bloomberg announced last week that he won’t get in. I was hoping he would, as he has the brains to get the USA back on the right financial track, if anyone does.

Come to think of it, perhaps he thinks the economy is unfixable.


117 posted on 03/01/2008 9:47:10 AM PST by Veto! (Opinions freely dispensed as advice)
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To: jdm
My information is dated, but for what it's worth:

last I heard, the only thing keeping C-17 alive was Boeing internal funding and lame hopes for foreign sales. AF was showing little willingness to go beyond the 220+ already on order...onsies and twosies (spec ops etc) but about 230 AC total. Editorializing about some "historical partnership" is stretching the point as far as Long Beach is concerned.

Boeing has been happily dismantling the old MDC facility here and developing the real estate. Commercial facilities are gone and only C-17 and some support services remain for the most part. (They did leave the "Home of the Douglas Jets" sign either as a gift or a poke in the eye)

I think the C-17 tooling all belongs to Boeing and once it starts coming down the cost of starting over would buy you a medium sized country.

Profit in large AC is in their sustainment...decades worth of parts for these planes will have to come from Europe. Put another way - building them is the cheap part, sustaining them in service is where the real money is and that money will be going to the existing European suppliers and not to Alabama. Remember that these are based on existing (euro) aircraft and economy does not come from replacing current parts with American substitutes,also, support (actually hanging parts on the AC) will probably take place at AF depots. (Nowhere in the news releases have I seen the phrase "lifetime cost" and that's usually a gov. mantra)

I've read that the RFP drove Boeing to the smaller AC but it's also true that they wanted a new role for 737 specifically and the AF had wanted that plane before. Never saw the spec so that's rumor.

Some of the posts here claim the EADS AC has more capabilities. They both meet the specification but Airbus does it on a bigger platform. Not more capabilities but higher capacity (we are told).

118 posted on 03/01/2008 9:47:21 AM PST by norton (house for sale cheap)
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To: dr_who_2
I would go further and say that if you think McCain and the Republican’s platform in Ohio could be summarized as “we want to make Boeing be the next GM and the state of Ohio the next Detroit”, then they certainly wouldn’t get my vote.

Did you say Ohio?

Link
119 posted on 03/01/2008 9:52:32 AM PST by FreeReign
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To: FreeReign

What irritates me the most is so-called “Conservatives” harping on how winning government contracts creates jobs or how creating special incentives will attract this company into some region and create umpity-ump jobs when the effect overall is more than often irrelevant to the local economy or even worse for the country. What they’re really doing is screwing up the market and the taxpayers... something that Ted Kennedy Democrats are for.


120 posted on 03/01/2008 9:54:51 AM PST by dr_who_2
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To: FreeReign

My post (106) is not spam, it’s a Boeing website, please read it. Your excessive number of posts are spam, 1 or 2 would get the point across.


121 posted on 03/01/2008 9:56:02 AM PST by palmer
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To: palmer
My post (106) is not spam, it’s a Boeing website, please read it. Your excessive number of posts are spam, 1 or 2 would get the point across.

You harping now with your two posts about my ~six posts that document jobs, is spam.

Please don't post to me about it again.

122 posted on 03/01/2008 9:59:00 AM PST by FreeReign
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To: FreeReign
Northrop Grumman; Fairborn, Ohio

So that's what they do in that building ... I used to work right across the street from there.

123 posted on 03/01/2008 9:59:31 AM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: Veto!
That’s corporatethink. Republicans ought to try some Humanspeak, like “We’re keeping thousands of jobs here in the USA.” That’s what wins elections.

Either way, it's bull****. If the Republicans are basing their economic platform on the USAF, Boeing, or Northrup Grumman, they'll help lose thousands more jobs, and I won't be voting for them.
124 posted on 03/01/2008 9:59:56 AM PST by dr_who_2
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To: FreeReign
Actually to say that jobs will be lost in Kansas is a little misleading.

I think "jobs lost in Kansas" is probably accurate.

There are a lot of people in Wichita working on building KC-767s for Italy and Japan. Their long-term employment prospects just dropped considerably.

125 posted on 03/01/2008 10:01:21 AM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: FreeReign

Yeah, I’m sure Ohio has offices for every aerospace-related company under the sun, including BAE, Airbus, SAAB... If we treat the USAF as an employment program and a bureaucracy for delivering subsidies, we’ll have a very expensive, crappy air force and deficits until the end of time.


126 posted on 03/01/2008 10:09:35 AM PST by dr_who_2
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To: FreeReign
If Northrop were making the plane, I wouldn't have a problem with it. But Airbus (France) is making the plane and getting the lion's share of the loot.

And we send enough of our tax dollars overseas as is already, we don't need to be giving Billion dollar defense contracts to foreign countries, especially France.

127 posted on 03/01/2008 10:10:14 AM PST by AFreeBird
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To: FreeReign

I would also point out that not all Ohio voters or American voters work in defense/aerospace. While making that small segment of the population happy is not a bad political strategy in itself, alienating the voters who are far more concerned about domestic issues and who don’t work in that industry is politically stupid and plays into the hands of the opposition.


128 posted on 03/01/2008 10:15:18 AM PST by dr_who_2
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To: AFreeBird
If Northrop were making the plane, I wouldn't have a problem with it. But Airbus (France) is making the plane and getting the lion's share of the loot.

I've been documenting some of the Northrop Grumman jobs and some of the EADS, U.S. part supplier jobs.

You should document your point if you wish to make one.

129 posted on 03/01/2008 10:17:57 AM PST by FreeReign
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To: dr_who_2
I would also point out that not all Ohio voters or American voters work in defense/aerospace. While making that small segment of the population happy is not a bad political strategy in itself, alienating the voters who are far more concerned about domestic issues and who don’t work in that industry is politically stupid and plays into the hands of the opposition.

Why would voters who don't work in the industry be alienated, if voters who are in the industry aren't alienated?

130 posted on 03/01/2008 10:20:08 AM PST by FreeReign
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To: FreeReign

Perhaps at the time, one would have thought this to be true. Who would have believed that the GOP would settle for one dinky plant in Alabama? Of course we don’t know what other ‘perks’ they received. These are old articles read the new ones now that the contract has been awarded.


131 posted on 03/01/2008 10:23:20 AM PST by nyconse
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To: nyconse
Perhaps at the time, one would have thought this to be true. Who would have believed that the GOP would settle for one dinky plant in Alabama? Of course we don’t know what other ‘perks’ they received. These are old articles read the new ones now that the contract has been awarded.

I'm sorry. I think that you don't know what you are talking about.

The articles stand -- you counter with...nothing.

132 posted on 03/01/2008 10:26:58 AM PST by FreeReign
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To: AFreeBird
I wasn’t even aware that Northrop Grumman was involved in the deal at all until it was just finalized. I always heard it was EADS vs Boeing. Sounds like they wanted an American face on the deal and the only other choice was Lockheed Martin.
133 posted on 03/01/2008 10:27:13 AM PST by Hillarys Gate Cult (The man who said "there's no such thing as a stupid question" has never talked to Helen Thomas.)
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To: nyconse

Reagan’s words again ring true:

“If it’s successful, tax it. If it survives, regulate it. If it starts to fail, subsidize it.”


134 posted on 03/01/2008 10:29:00 AM PST by RinaseaofDs
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To: Hillarys Gate Cult
I wasn’t even aware that Northrop Grumman was involved in the deal at all until it was just finalized. I always heard it was EADS vs Boeing. Sounds like they wanted an American face on the deal and the only other choice was Lockheed Martin.

No. The U.S. media report the facts incorrectly and you believe them.

135 posted on 03/01/2008 10:29:20 AM PST by FreeReign
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To: Veto!
The USAF contracting office did not work hard enough with Boeing to negotiate the best plane at the best price. Government agencies are notoriously bad at negotiating.

Well the USAF contracting office sure worked hard enough with Boeing the first time around on this jet. That is why Darlene Druyan and some Boeing big shots went to jail.

136 posted on 03/01/2008 10:30:59 AM PST by saminfl (,/i)
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To: nyconse
Who would have believed that the GOP would settle for one dinky plant in Alabama?

All the jobs in various states this contract will create has been posted several times on this thread. Are you one of those, "don't confuse me with facts, my mind is made up" type of person? There is more than "one dinky little plant" in Alabama. Boeing cheated the first time on this airplane. Maybe that had something to do with the award.

137 posted on 03/01/2008 10:36:51 AM PST by saminfl (,/i)
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To: nyconse

Northrop Grumman employees are just as American as Boeing’s And they are NON UNION! GE in Ohio will be building the engines for this program, the refueling system is buil here also.


138 posted on 03/01/2008 10:38:56 AM PST by Always Independent
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To: FreeReign
I don’t believe any crap they say, I just know first hand how defense joint ventures work. The US almost always gets the short end of the stick. Those in our defense indusrty who set up the deals don’t mind mortgaging the company’s future as they’ll be long retired by the time the bill comes due.
139 posted on 03/01/2008 10:39:34 AM PST by Hillarys Gate Cult (The man who said "there's no such thing as a stupid question" has never talked to Helen Thomas.)
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To: Hillarys Gate Cult
Speaking of our favorite company, here’s a story about their greatest product,

Singapore Airlines grounds A380 due to fuel pump defect

http://www.iii.co.uk/news/?type=afxnews&articleid=6556041&subject=companies&action=article

Singapore Airlines (SIA) said Tuesday it had cancelled an EADS Airbus A380 flight to Sydney because of a fuel pump defect.

snip- Passengers were transferred to a Boeing 747-400 but not all of them could be accommodated.

140 posted on 03/01/2008 10:44:31 AM PST by Hillarys Gate Cult (The man who said "there's no such thing as a stupid question" has never talked to Helen Thomas.)
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To: jdm

48% of the project went to French Muslims.

Our next move may be to negotiate for Chinese solders ( cheaper) to fight for the US.

House them here and create even more US jobs!


141 posted on 03/01/2008 10:45:19 AM PST by NoLibZone (At the age of 50 - The Offshoring of US Military Projects Has Changed my perscpective.)
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To: saminfl

Don’t worry about Tanker Aircraft, worry about our aging fighter fleet.

My Nephew is a Flight Commander for the USAF. All the F-15’s are starting to become dangerous to fly. The step to F-22’s is not happening like they promised over 3 years ago.

The Bush administration, and the Democrat controlled Congress is holding/diverting funds and using upgrade appropriations to fund the War.

Many of our finest and trained pilots are ready to resign their commissions over this problem. It will only get much worse.


142 posted on 03/01/2008 10:45:23 AM PST by PSYCHO-FREEP (Juan McCain....Viva El Presidente! "I'm not prejudice, I hate everybody the same.")
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To: Polybius

You left out two of their most important aircraft. The T-38 and F-5!


143 posted on 03/01/2008 10:49:57 AM PST by Always Independent
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To: FreeReign
Because if the Republicans reinforce the perception that they see the war on terror and just about everybody else as the ticket to economic growth or an end in itself, most voters aren't going to see it that way, particularly the ones who aren't concerned about defense spending but are very concerned about the economy in general. Just because you're supposedly creating all these defense jobs doesn't mean that people who are looking for a job with better health care benefits or a job in the financial or manufacturing sector are going to move to Ohio and apply for a job in the defense industry, assuming that they would even be qualified for one.
144 posted on 03/01/2008 10:53:53 AM PST by dr_who_2
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To: Veto!

Sure it can be defended. Look at how many fighter aircraft we sell to the Europeans! Are you trying to say that the Europeans should buy all the fighter aircraft we want to sell them at the cost of billions and not expect us to buy anything from them. Its attitudes like that that perpetuate the sterotype of the ugly american! This program is good for balanced trade


145 posted on 03/01/2008 10:54:04 AM PST by Always Independent
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To: nyconse
"Yes, they will. What is wrong with the GOP?"

I don't know.

I am a Ronald Regan Card carrying GOP member. I met and Talked with Barry Goldwater at the AZ Biltmore. I still have my '64 "Win with Barry" Remco Doll on my desk.

I'm open to foreign competition for all but our Military needs.

The one thing we could count on was that the bullets would be made here. Not 58% of the bullet, but the whole bullet.

It's not a north vs south or regional issue.

I'd like 100% of thee planes made in Alabama.

The new plans at off shoring of US military Projects to French/Muslims and the "A weak dollar is good" was nicely handed to the Liberals.

This will hand the election to Huessin.

And guess what he will do with the project?

146 posted on 03/01/2008 11:03:34 AM PST by NoLibZone (At the age of 50 - The Offshoring of US Military Projects Has Changed my perscpective.)
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To: hoagy62

Hey that’s a great point it’s a fly wire plane!


147 posted on 03/01/2008 11:15:14 AM PST by NoLibZone (At the age of 50 - The Offshoring of US Military Projects Has Changed my perscpective.)
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To: NoLibZone

I agree with you. I am not opposed to fair trade. My husband is an engineer. I have witnessed first hand the devastating cost of free trade as applied these last 30 years. I believe the long term welfare of the US is sacrificed for short term profits. I believe as you do that there are national security issues at state here. We need to be able to build our weapons in American from steel to the finished product. This aside, to award a contract to foreign competitors while the Democrats are fighting the free trade issue in the absolutely crucial state of Ohio is lunacy.


148 posted on 03/01/2008 11:24:31 AM PST by nyconse
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To: Always Independent

There is nothing ‘balanced’ about this agreement.


149 posted on 03/01/2008 11:25:17 AM PST by nyconse
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To: nyconse
"The KC-30 industrial team is committed to delivering an American military aircraft program, with tanker assembly and production taking place in Mobile, Alabama, and 58 percent of the aircraft, subsystems and support being provided by hundreds of American partners and suppliers. The KC-30 program will result in the in-sourcing of thousands of U.S aerospace jobs."

http://www.northropgrumman.com/kc30/operations/section.html

The other 48% of the jobs were sold to French Muslims at a USD to Euro of 0.661% !

150 posted on 03/01/2008 11:26:32 AM PST by NoLibZone (At the age of 50 - The Offshoring of US Military Projects Has Changed my perscpective.)
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