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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: dr_who_2

They would get my vote too. Why should I be loyal to Repubs. They have shown no loyalty to Americans.


151 posted on 03/01/2008 11:26:57 AM PST by nyconse
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To: Veto!

Maybe and yeah you are correct. There are no good choices this election.


152 posted on 03/01/2008 11:28:13 AM PST by nyconse
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To: dr_who_2

So you think American companies build crappy products? Why am I not surprised.


153 posted on 03/01/2008 11:29:25 AM PST by nyconse
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To: FreeReign

Workers see good manufacturing jobs lost...whether they work in that area or not, they are incensed. Further more, who knows how many jobs awarding this contract to Boeing would have created or saved.


154 posted on 03/01/2008 11:31:29 AM PST by nyconse
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To: FreeReign

All recent reports have stated that the only American jobs will be the ones in Alabama. The articles you provide are old articles discussing what jobs might be provided in the US. Those jobs are going to Europe and are not coming back.


155 posted on 03/01/2008 11:34:02 AM PST by nyconse
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To: Hillarys Gate Cult

Thats it exactly Northrup is a front man. They hope to convince American (whom they think are stupid) that Northrup will actually have more jobs than the ones in Alabama promised.


156 posted on 03/01/2008 11:35:19 AM PST by nyconse
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To: RinaseaofDs

Reagan was speaking of the American company. It’s awful difficult to tax those pesky foreign companies. I guess that’s another loss for America-no corporate taxes will be paid.


157 posted on 03/01/2008 11:36:49 AM PST by nyconse
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To: nyconse

Some do, some don’t. If your talent at making shoes is equal to your talent at defending Boeing, you should stay out of the shoemaking business.


158 posted on 03/01/2008 11:39:11 AM PST by dr_who_2
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To: NoLibZone

This is Northrop’s one words...they hold out a carrot-maybe more jobs, but the reality is...

‘But Northrop, a defense contractor perhaps best known for developing the B-2 stealth bomber, said it would assemble and modify the tanker in Mobile, Ala., making it, in its words, an “American-built” plane.’


159 posted on 03/01/2008 11:42:52 AM PST by nyconse
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To: dr_who_2

Again personal insults instead of arguments...I don’t think this comment speaks well to your ability to argue a point.


160 posted on 03/01/2008 11:44:17 AM PST by nyconse
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To: nyconse

You should post less and read more carefully.


161 posted on 03/01/2008 11:44:39 AM PST by dr_who_2
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To: nyconse

Agreed. They get 2,000 jobs, we lose 9,000.


162 posted on 03/01/2008 11:46:32 AM PST by ChiefBoatswain
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To: dr_who_2

I read quite carefully-thanks. I have seen what modern free trade has brought this country-closed garment factories, closed steel factories, close auto plants, destruction of the American electronics industry...etc. The American government should award billion dollar weapons programs to American companies. Also, I do believe it is a security issue as well.


163 posted on 03/01/2008 11:47:31 AM PST by nyconse
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To: ChiefBoatswain

Unfortunately, this is the truth despite all the rhetoric.


164 posted on 03/01/2008 11:48:10 AM PST by nyconse
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To: dr_who_2

“A functioning air force is infinitely more important than drumming up business for Illinois”

Glad you agree but will you still say that should the French withhold parts and service if they disagree with one of our foreign policies?


165 posted on 03/01/2008 11:48:17 AM PST by CodeToad
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To: nyconse
I believe Freedom (Free Trade and Capitalism) can only work with a moral people.

Up until yesterday I had so looked forward to seeing the dims kick the crud out of each other come their convention.

Do a search here on my posts prior to 2-29-08.

Here's what CONSERVATIVE Duncan Hunter said of the deal :

“These are the same European governments who are unwilling to support us in the global war on terror and over the last few months refused to provide even an additional 100 soldiers apiece for Afghanistan operations,” said Rep. Duncan Hunter, R-California.

“Instead, we have to send 3,200 additional U.S. Marines to Afghanistan while they take $35 billion in American taxpayer contracts.”

166 posted on 03/01/2008 11:48:40 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

Excellent post-you make very good points.


167 posted on 03/01/2008 11:49:47 AM PST by nyconse
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To: nyconse

I might care more about what you think if you could distinguish between facts and delusional rantings.


168 posted on 03/01/2008 11:56:42 AM PST by dr_who_2
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To: CodeToad

No, but that’s a plumb opportunity for Boeing if it ever happens.


169 posted on 03/01/2008 11:59:21 AM PST by dr_who_2
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To: Eurale

“When our defense contractors realize that price points and design innovation really matter then they’ll get the business back.”

The Boeing entry would’ve suited the Air Force just fine. Just a couple of years ago, they were all hot to get 767 tankers.

This is one of the few issues I’d vote with a Democrat on. For defense systems, you ONLY go outside of America if you can’t get what you need here. And the 767 could easily be stretched if USAF simply wants a little more capacity.


170 posted on 03/01/2008 12:07:35 PM PST by DesScorp
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To: nyconse
All recent reports have stated that the only American jobs will be the ones in Alabama. The articles you provide are old articles discussing what jobs might be provided in the US. Those jobs are going to Europe and are not coming back.

Look, I documented for you in detail various the jobs that will be created from the Northrop Grumman Tanker program.

Your response is baseless.

171 posted on 03/01/2008 12:07:59 PM PST by FreeReign
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To: CodeToad
Won’t get to that point because as we speak the French are trying to get as much of the plane built there as they can. Once that happens, due to French labor now having so little leverage in anything, they’ll go on strike. Just watch, French strikes will be the norm with this project as they'll want everyone to know that they're the only game in town.
172 posted on 03/01/2008 12:08:31 PM 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: DuncanWaring

“Alamaba? Where the heck is that.

Right between Greogia and Mippississi.

Everybody knows that. ;-)”

Today they’re closer to France.


173 posted on 03/01/2008 12:09:48 PM PST by DesScorp
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To: Eurale

“When our defense contractors realize that price points and design innovation”

When FReeper’s read entire articles then we’ll get a conservative in office :)

The Boeing Aircraft according to this article is $35 million dollars cheaper per plane than the Airbus. The article mentions some aspects of performance but of course they won’t talk about the specifics and end the sentence...”depending on configuration”.


174 posted on 03/01/2008 12:10:39 PM PST by e_castillo
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To: Brilliant

“I also would not be surprised if President Obama cancels the contract altogether.”

Good point. Why would we need tankers if we’re just going to wait for him to come here instead of engaging him overseas?

Nobama!


175 posted on 03/01/2008 12:12:19 PM PST by PLMerite ("Unarmed, one can only flee from Evil. But Evil isn't overcome by fleeing from it." Jeff Cooper)
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To: nyconse

“Yes, they will. What is wrong with the GOP? They have begun to believe their own nonsense. Free trade is largely unpopular with all Americans-not just Democrats.”

Free trade is fine for civilian purchases. But not Military weapons systems. This deal is just insane on numerous levels.


176 posted on 03/01/2008 12:12:21 PM PST by DesScorp
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To: DesScorp
The Boeing entry would’ve suited the Air Force just fine. Just a couple of years ago, they were all hot to get 767 tankers. This is one of the few issues I’d vote with a Democrat on. For defense systems, you ONLY go outside of America if you can’t get what you need here. And the 767 could easily be stretched if USAF simply wants a little more capacity.

Boeing uses major parts and assemblies from China. Here's one example.

(The underscore is mine)

Link

177 posted on 03/01/2008 12:15:33 PM PST by FreeReign
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To: FreeReign

All the articles you provided were before the deal was struck. Show me one article -post deal- that provides any evidence that jobs will be gained outside of Alabama.


178 posted on 03/01/2008 12:17:07 PM PST by nyconse
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To: FreeReign

Exactly, Boeing was forced because of free trade pressure to manufacture some parts in China. Wow, I feel secure knowing that parts used for American military planes etc. are being manufactured by the Chinese-probably the most dangerous country right now in terms of national security.


179 posted on 03/01/2008 12:19:32 PM PST by nyconse
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To: FreeReign

That’s for the 787, a civilian airliner for an international market. For MILITARY SYSTEMS, we should only buy American produced weapons, period. We can get tech from abroad if we need it and build it here. But the Airbus will still be mostly fabricated in Europe. It’ll just be assembled here.


180 posted on 03/01/2008 12:19:39 PM PST by DesScorp
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To: DesScorp

Yes it is insane.


181 posted on 03/01/2008 12:20:01 PM PST by nyconse
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To: nyconse
All the articles you provided were before the deal was struck. Show me one article -post deal- that provides any evidence that jobs will be gained outside of Alabama.

All Tanker bids were submitted in April of 2007.

The articles dated August through December of 2007 all refer to the Northrop Grumman bid of April, 2007. The bid that was awarded is the April, 2007 Northrop Grumman bid.

Your claim that something has changed since the various analysis that I posted of the Northrop Grumman bid, is false. Please don't spread false information.

182 posted on 03/01/2008 12:27:06 PM PST by FreeReign
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To: dr_who_2

Again with the name calling-no problem. Every word I have posted is true. Jobs have been promised to Alabama-nowhere else. American companies have been run out of business because of foreign dumping. National security is compromised by manufacturing military equipment overseas.

We have replaced an economy that relied on manufacturing goods with a consumer driven economy which is why we are told to spend money...including the so called stimulus money. Unfortunately, the chickens have come home to roost. Americans are over extended and can not keep the economy strong anymore. In fact, I think you are somewhat delusional if you can not see the impact immoral, unfair free trade deals have on the GOP and more importantly the country. McCain will lose Ohio on this issue...How many times have Republicans won without Ohio? The answer is twice.


183 posted on 03/01/2008 12:28:23 PM PST by nyconse
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To: FreeReign

Have you listened to the financial news yesterday or today? The planes will be assembled and modified in Alabama-that’s it. Whatever the bids called for-it’s not happening.


184 posted on 03/01/2008 12:30:01 PM PST by nyconse
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To: nyconse
Security is a necessity for some parts of the defense industry but in other places it's just a good way to drive out competition, drive up costs, and undermine the war effort. Treating every "refueling" system like a critical weapons program is a great way to promote further waste and bureaucracy in the defense industry. As for textiles and steel, industries with growth potential benefit from those commodities being plentiful and inexpensive (including the defense industry, among others). The American electronics industry is alive and well even if parts are manufactured in Thailand or some other poor country. Manufacturing has been on the upswing for a while up to now, but people who think they are entitled to lucrative jobs assembling circuit boards had best move to Thailand. No amount of additional protectionist policies or subsidies is going to bring the textile industry back to its former "glory", although that would be a great way to limit consumer choice and increase the cost of living.
185 posted on 03/01/2008 12:43:02 PM PST by dr_who_2
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To: nyconse
Have you listened to the financial news yesterday or today? The planes will be assembled and modified in Alabama-that’s it. Whatever the bids called for-it’s not happening.

N.G. will "just" be assembling and modfying?

No. Northrop Grumman will be engineering the electronic systems and the software componants and they will be building all fueling componants. American companies will be supplying a majority of the parts. Northrop Grumman will then assemble everything.

Contrast that to EADS. They will be metal-bending the frame.

I documented in full detail the reality. You have done no such thing except to give me some paraphrase from the Drive-Bys.

Whether you choose to ignore what I've documented is up to you.

186 posted on 03/01/2008 12:44:13 PM PST by FreeReign
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To: nyconse

It works towards the balance of trade. Northrop Grumman is Prime here and will reap most of the profit.


187 posted on 03/01/2008 12:48:03 PM PST by Always Independent
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To: FreeReign

Well, we shall see. I consider your ‘proof’ outdated. Tell you what, let’s watch the situation and see how many jobs America ends up with out of this dubious deal-not the ones dangled during the bidding faze but the ones actually created. Also, let’s keep an eye on the net job gain or loss in general.


188 posted on 03/01/2008 12:51:04 PM PST by nyconse
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To: Always Independent

Airbus will reap the profit.


189 posted on 03/01/2008 12:51:31 PM PST by nyconse
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To: dr_who_2

A country that manufactures nothing will not remain an economic power. We have a government that favors foreign competitors and does nothing when these companies violate trade agreements, a tax code that favors companies that move jobs overseas. There is no upside to free trade as it is currently practiced in America.


190 posted on 03/01/2008 12:55:10 PM PST by nyconse
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To: GreyFriar

I thought the Air Force had to go with the lowest bidder, but something strange happened in this case.


191 posted on 03/01/2008 12:55:17 PM PST by zot
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To: zot

Someone’s pockets getting lined perhaps?


192 posted on 03/01/2008 12:55:59 PM PST by nyconse
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To: nyconse

Could be. It has happened before.


193 posted on 03/01/2008 1:13:26 PM PST by zot
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To: nyconse

Right you are.


194 posted on 03/01/2008 1:24:38 PM PST by RinaseaofDs
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To: nyconse
Every word I have posted is true.

Just about everything you've posted is the same old hogwash.

Jobs have been promised to Alabama-nowhere else.

Waiting on government promises of specific jobs is a not a good way to get one.

American companies have been run out of business because of foreign dumping.

If you call offering readily available, innovative products for less "dumping" and lobbying the government for more regulation a good business strategy.

National security is compromised by manufacturing military equipment overseas.

If you define "national security" broadly enough, you can make American thumb tack manufacturers safe from any foreign competition, but the country won't be any safer as a result. Europe knows how to make advanced airplanes and weapons just like the US. It's rather difficult to argue that a government that spends more than most if not all of the countries in the world combined on defense in a single year is going suffer if it awards some of that business to another NATO country.

We have replaced an economy that relied on manufacturing goods with a consumer driven economy which is why we are told to spend money...including the so called stimulus money.

Maybe if Republicans advocated a tax policy and an inflation policy that encouraged private saving instead of undermining efforts to expand trade and foreign investment and end stupid subsidies, they would address the real problem.

In fact, I think you are somewhat delusional if you can not see the impact immoral, unfair free trade deals have on the GOP and more importantly the country.

I've merely been around long enough to see that the protectionists will perpetually resort to the "national security" and "patriotism" mantras, followed by the shriller "immoral and unfair" ones before they reveal their own narrow vested interests. Whenever there is an economic downturn due to other problems, they are the first to complain and the last to offer anything other than trade wars with this or that country as solutions, although their cures are frequently even worse than the disease. The only growth industry for them is politics and increased regulation. They routinely read the Republican party the riot act if they don't get what they want even though they never seem to get their candidates nominated, much less win elections.
195 posted on 03/01/2008 1:49:57 PM PST by dr_who_2
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To: nyconse

US manufacturing has increased 53% since NAFTA was first adopted. It follows the year-to-year state of the economy but has been growing steadily for over half a century along with our economy as a whole. You can point to the decline of this or that industry (assuming you have any numbers to back up your assertion) but it doesn’t affect long term trends overall. As of 2006, we’re manufacturing two and half times as much as China is, even though China is a huge country with an equally huge, increasingly well educated work force that understandably wants to provide for itself as well as the US or other markets out there. So if you’re implying that the US is doomed because manufacturing is in decline, you’re wrong on both counts.


196 posted on 03/01/2008 2:23:50 PM PST by dr_who_2
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To: dr_who_2

I don’t know. I think the reports that show manufacturing up are a bit suspicious. If manufacturing is up then how come almost all products in the store are made in China? Also, why do we have such a huge trade deficit?


197 posted on 03/01/2008 2:32:34 PM PST by nyconse
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To: dr_who_2

I’ve been around long enough to see the impact of free trade as currently practiced-to call it a disaster for this country is an understatement.


198 posted on 03/01/2008 2:34:47 PM PST by nyconse
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To: dr_who_2

You know, when people lose job as a result of trade policies, or have their wages cut and health care eliminated, there is a cost to the taxpayers. The more people affected, the more likely it is that Democrats will get elected and socialism will prevail. I think this will cost more in the end.


199 posted on 03/01/2008 2:40:20 PM PST by nyconse
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To: DesScorp
And the 767 could easily be stretched if USAF simply wants a little more capacity.

They also want it to fly. The 767 already has runway lenght issues to meet the present capacity. Stretch it to match the A330 fuel/cargo capacity and there wouldn't be a airbase anywhere with enough runway to get it off the ground.

200 posted on 03/01/2008 3:05:13 PM PST by Oztrich Boy (Never say yer sorry, mister. It's a sign of weakness)
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