July 2004


 

Offsets Make Allies of Adversaries

Concern over the multi-million dollar side deals called, ‘offsets’, being offered by U.S. defense firms to promote the sale of aircraft and defense systems overseas is making allies of conventional adversaries.

California Republican Rep. Duncan Hunter and labor union representatives are normally on opposite sides of trade-related issues, but the steady loss of U.S. jobs is drawing strong labor support for “Buy American” legislation backed by Rep. Hunter. “Duncan Hunter gets it,” said IP Buffenbarger, in a news article where he called offsets “a form of legislative extortion.”

Offset deals increasingly include the transfer of U.S. tooling, technology and jobs to foreign countries in order to close multi-billion deals, such as Lockheed-Martin’s $3.5 billion sale of 48 F-16 Fighting Falcons to Poland in 2003. In addition to the aircraft, Lockheed promised to assemble engines in Poland, and invest in Polish shipyards, steel mills and high tech projects.

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