Streetcar Line

Boeing, Boeing… Gone?

Have nasty politics put the air tanker, and our military, at risk?

By 1.16.09

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A curious thing, and some would say a suspicious one, happened on the morning of September 10, 2008. On the floor of the House of Representatives, Members representing districts where the Boeing Company had a heavy presence began cheering and celebrating. But Members representing districts with closer ties to the Northrop Grumman company had no idea what was going on.

Eventually the news came out: Deputy Secretary of Defense Gordon England and other Pentagon officials had called interested Members to tell them the Pentagon had decided to completely cancel the existing competition between Boeing and Northrop (along with the European Aeronautic Defense and Space Company North America, or EADS) for a desperately needed new Air Force refueling tanker. Northrop had won the competition until a semi-successful Boeing protest and was widely expected to win it again. But it seemed that all the Boeing-friendly Members got the cancellation news first -- news that, translated, meant they could start over from scratch a competition they had thoroughly lost.

That very night, at a gala to celebrate the next day's scheduled dedication of the Pentagon Memorial (in remembrance of 9/11), England and other top Pentagon brass sat as guests at the table sponsored by Boeing.

Boeing has long had an incredibly cozy relationship with the Pentagon -- sometimes too cozy. In 2001, the Air Force had awarded a lease/buy tanker contract to Boeing, but it was canceled after a John McCain-led investigation sent several Boeing and Pentagon officials to jail for corruption relating to the award.

Defense Secretary Robert Gates already owns a home in Big Lake, Washington, 55 miles North of Seattle, Boeing's original headquarters and still one of its biggest manufacturing sites. His children also have extensive Seattle ties. Incoming National Security Advisor James Jones was a member of Boeing's board until December 15 of 2008. Boeing's corporate headquarters is now in Chicago, political home of incoming President Barack Obama and his chosen chief of staff Rahm Emanuel, who was one of the most angrily outspoken congressmen when Northrop was announced as the competition winner last Feb. 29.

Most experts in the outside trade press had already written by then that Northrop had the better plane, and subsequent testimony showed that Northrop also had offered to build the first 68 planes in this 179-plane contract for $2.9 billion less than Boeing would have charged. Yet when Boeing protested on more than 100 counts, a Government Accountability Office (GAO) analysis upheld just eight of the more minor procedural (not substantive) complaints -- and even there, some observers smelled a rat. One of the unions with significant Boeing membership -- but not Northrop membership -- is the International Federation of Professional and Technical Engineers. The IFPTE also has members who work for GAO, some of whom actually worked on the tanker protest analysis.

And in Congress, Boeing seems to have more clout -- or at least a far more impassioned group of Members as advocates, ones far more willing to use open threats and other hardball tactics. Truth be told, their intensity on the subject in many cases borders on the bizarre. Witness the scene at one of the national political conventions this summer where a columnist was chatting very amiably on a number of topics with a congressman who always had been most friendly -- and then, when the columnist asked in passing if there were any news on the tanker contract, the congressman's demeanor changed markedly. Raising his voice, jabbing his finger for emphasis, suddenly red-faced, the congressman erupted into an absolute rant about how the award for Northrop/EADS would be giving jobs to Europeans (because of the EADS component of it) instead of Americans.


NEVER MIND THAT NORTHROP also is responsible for a host of jobs in that congressman's own district. Never mind that nearly a third of Boeing's proposed plane would feature parts built overseas, and that overall Boeing is outsourcing more and more jobs abroad, including breaking ground for a $21 million expansion for a plant in China last November while boasting of having bought more than $1.5 billion of aviation hardware from China in the past two decades and promising to double that in coming years. Boeing also is a partner in the Moscow (Russia) design center, with 2,000 employees there.

And never mind that independent (not Northrop-sponsored) analyses show that if Northrop gets the tanker it will create some 48,000 new direct and indirect jobs in the United States -- some 4,000 more than the Boeing version -- with 230 suppliers based in all 50 states. The Northrop plane itself would be assembled in a new, labor-intensive plant in Mobile, Alabama, with crucial, satellite economic boosts throughout the Gulf Coast from Louisiana into Florida.

Mobile County Commissioner Stephen Nodine put it in perspective: "The Gulf Coast has been devastated by four major hurricanes [just beginning with Katrina; the year before Katrina saw four storms inflict major damage on the eastern Gulf Coast] and is trying to rebuild our economy. If Obama and his administration want to make a statement about rebuilding the Gulf Coast, and get the best plane for the job… this is the way to go to reward American ingenuity and American resolve on the Gulf Coast."

Nodine has helped secure resolutions of support for the Northrop bid from city councils in virtually every coastal town from New Orleans to Melbourne, Florida.

U.S. Rep. Jo Bonner of Mobile adds a broader perspective, noting, as have many others, that the current tanker fleet is five decades old and becoming more and more dangerous to fly, with fewer and fewer of the planes available for use at any one time.

"Do we no longer need to project strength and purpose around the world?" he asked. "All over the world there are hot spots that could require American leadership at a moment's notice.… For years, everybody in Congress and the Air Force has agreed this is the nation's Number One military acquisition priority… that the tanker is the glue that keeps everything else [involving the ability to "project force"] together. We have to get it right sooner rather than later."

That last point is important: It is generally acknowledged that, whatever the other merits of the two competing planes, the Northrop plane will be ready to come off the assembly line far sooner than the Boeing one.

Bonner also said that a President Obama would have an incredibly difficult time building the promised better relationship with Europe if his administration rejects a plane merely because one of the plane's two main corporate builders is a primarily foreign -- European -- company.

"This is the man who stood before 1 million people in Berlin. He can't go back to Europe with all the challenges in the world and begin to build his promised partnerships but then say, by the way, we're not going to use products that have any European connections."

Finally Bonner pronounced himself unconcerned about incoming National Security Advisor James Jones' service until last month on Boeing's board of directors: "General Jones wore the uniform of his country long before he wore a suit as a Boeing corporate board member…. And with all the criticism of Vice President Cheney's past ties to Halliburton, does the Obama administration want to be accused" of showing favoritism of a similar nature in making such a big decision?


NEVERTHELESS, POLITICS does talk in Washington. Boeing's unprecedented hardball campaign to reverse Northrop's tanker award, with arm-twisting in Congress and a high-profile and nasty advertising campaign against its competitor, has made it clear that if Northrop again wins the competition when it is renewed this year, Boeing will continue to press every appeal it is allowed, no matter how long it takes. But an award to Boeing, after such a clear initial victory by Northrop, would almost certainly lead Northrop to take the battle to court -- where it would probably have quite a strong case. And the longer all this goes on, the longer our servicemen will have to wait for a tanker to replace the half-century-old fleet. That would be unforgivable.

As 22 retired Air Force generals wrote in a letter last summer, "Delays in the tanker program will only serve to put the lives of crews flying these aging systems in greater jeopardy."

The best answer -- the one that solves all the politics, that delivers the planes the soonest, and that forces both companies to be at their best in order to keep the business -- is the one I advocated on these pages back in July of 2007: "The best idea might not be to give the whole award to Northrop or to Boeing, but to split it up."

The first set of 68 planes in the first contract of 179 planes will take years for either company to fill, and eventually the entire fleet of 510 planes must be replaced. Why not keep both companies on their toes, forcing them to do good work by splitting the first batch while keeping the competition open for subsequent batches?

In the summer of 2007, many thought that idea preposterous. But in late September of 2008, powerful Defense Appropriations Subcommittee Chairman John Murtha of Pennsylvania told "Inside the Air Force" that (quoting the story's lead paragraph) "The Air Force will have no choice but to split the… tanker award between rivals Boeing and Northrop Grumman-EADS if it wants to receive a new tanker anytime soon."

The Pentagon darn well ought to listen to Murtha. If its splits the award before the end of February or even March, the first planes can begin being assembled by Northrop-EADS this autumn. But time's a-wasting, and our military personnel are at increasing risk.

As Alabama Gov. Bob Riley told me last week, "We believe in competition. We believe in value. That's what it means to be pro-American."

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About the Author
Quin Hillyer is a senior editor of The American Spectator and a senior fellow at the Center for Individual Freedom. Follow him on Twitter @QuinHillyer.