Update from 7-23-08 iMail:Clinton Backs U.S Workers in Tanker Debate
New York Democratic Sen. Hillary Clinton took a strong stand on behalf of U.S. aerospace workers this week when she challenged Air Force officials to follow the law governing major procurement decisions, such as the aerial refueling tanker, and to consider the impact on the U.S. industrial base.
At a Senate Armed Services Committee confirmation hearing this week, Michael B. Donley, nominee for Secretary of the Air Force, tried to downplay the domestic impact issue by saying that the aerospace industry is international and that the major corporations all have foreign entities. Clinton disagreed and asked him to respond in writing how the Air Force would honor established domestic sourcing requirements in U.S. law.
“When the Air Force announced its tanker refueling contract award to Airbus A330 last February, I was struck when the spokesperson indicated that the Air Force could not and did not take into consideration the impact of the award on the U.S. industrial base,” said Clinton. “I’m very well aware that we live in an international economy, but I’m also extremely conscious of the impact of decisions made by our government with taxpayer dollars that undermine our competitiveness for the long run and eliminate jobs and thereby undermine technical skill acquisition in a way that I think will come back to haunt us.”
The Air Force procurement program has been under intense scrutiny since it awarded a $35 billion contract for 179 aerial refueling tankers to a consortium headed by the European Aeronautic Defence and Space Co (EADS). The decision, which sparked nationwide outrage when the Air Force admitted it had not considered the impact on domestic employment, was also rebuked by the Government Accountability Office, which found “significant errors” in the bidding process, including favorable treatment for the EADS proposal.
July 9, 2008—The U.S. Defense Department announced today that it has reopened the bidding process for the $35 billion contract to build the next generation of refueling tankers for the Air Force. The contract had been awarded to Northrop Grumman, but the award drew criticism from Congress and led to a formal protest by Boeing—strongly supported by the Machinists, TCU and other American unions. (See two earlier articles here and here.)
The IAM is calling on Secretary of Defense Robert M. Gates to ensure the new round of bidding for the Air Force refueling tanker contract does not include any residual bias from the initial competition, which contained significant errors and was heavily skewed toward the Airbus tanker. According to the Machinists’ iMail of July 10:
“We are calling for aggressive oversight of the bidding process to make sure Boeing’s tanker is evaluated on a fair, level playing field,” said Headquarters GVP Rich Michalski. “We will not accept, nor should American taxpayers accept a process or an outcome that is only slightly less rigged than the initial round of bidding.”
Fresh concerns erupted following yesterday’s announcement that the Pentagon might once again use excessive fuel capacity and other criteria to favor the Airbus aircraft in a new round of bidding to replace the Air Force’s aging fleet of aerial refueling tankers.
“I am concerned that the department is trying to find a new way to justify selecting the larger Airbus tanker again, even though there is no current operational requirement for a larger refueling tanker,” said Washington state Rep. Norm Dicks, who learned that the criteria for the new tanker will favor a larger tanker than was initially requested.
Rep. Dicks also noted that the Airbus is 53 percent larger than the Boeing 767, requiring greater maintenance and operations costs. He noted that the Boeing KC-767 could save $35 billion in fuel costs over 40 years—an amount large enough to equal the purchase of the entire fleet.
June 26, 2008—Twenty-two unions, labor federations and affiliated organizations have signed and delivered a letter to House and Senate lawmakers calling for Boeing to immediately be awarded the Air Force refueling tanker contract.
Citing the Government Accountability Office (GAO) report that said the Airbus tanker lacked the ability to refuel all of the Air Force’s aircraft and calling Boeing’s KC-767 “the clear winner” in the competition to replace the Air Force’s aging fleet of tankers, the labor groups are urging Congress to award the contract to Boeing without delay.
“The Air Force needs new tankers now,” said the letter, which was delivered to all 535 members of Congress. “Continuing this phony “competition” only adds unnecessary delays and costs to the tanker refueling program. The Boeing KC-767 fulfills the requirements of the original Request for Proposal (RFP) and has over 85 percent domestic content – a clear win for America.”
The Air Force decision to award the $40 billion contract to Northrop Grumman/EADS Airbus, was rebuked by the GAO report, which cited the Air Force for failing to follow its own guidelines and awarding the massive contract to a more costly aircraft that is too large for many airfields. Additional concerns outside the scope of the GAO report were also raised.
“Only Boeing has the skilled workforce and fully operational production line to meet the Air Force’s demand for new tankers. We strongly urge that Congress act now and award the tanker refueling contract to the original winner, the Boeing KC-767.”
TCU stands with the IAM in loudly protesting the decision by the Air Force to bypass U.S. union manufacturer Boeing to award a $40 billion contract to European corporations Airbus and EADS (European Aeronautic Defence and Space Co.). As the Machinists report, if Air Force officials were betting the outrage over the deal would die out quickly, they gambled wrong. A formal protest filed March 11 by the Boeing Co. will be considered by the Government Accountability Office (GAO) to determine if the multi-billion contract was properly awarded. And, as one opponent put it, “It strains credulity to believe even the original EADS/Northrop Grumman job creation numbers and claims of 60 percent domestic content, could be true. To believe that the EADS/Northrop Grumman European Airbus tanker will create 48,000 American jobs is a fairy tale akin to the notion that NAFTA is a source of good paying U.S. manufacturing jobs.”
Here is the update on this story as of March 28, 2008, from the Machinists:
The fight to reverse the $40 billion tanker decision enters its third week with union members contacting lawmakers and demanding hearings on the process that allowed Europe’s Airbus and its U.S. front company, Northrop Grumman, to walk away with one of the largest U.S. defense contracts in history.
The stakes in this fight are extremely high. In addition to 44,000 U.S. jobs that could be impacted, as many as 300 U.S. companies in over a dozen states stand to lose significant contract and sub-contract work if the massive tanker deal is outsourced.
In an analysis of Mission Capability, the most important evaluation factor in the bidding process, Boeing’s KC-767 received the highest possible rating, meeting or exceeding all key parameters. The Boeing tanker bested the Airbus offering in numerous other areas as well.
Boeing is also questioning numerous changes to bid requirements and evaluation criteria that resulted in a decision that cheats U.S. taxpayers, rewards a foreign company and would require the U.S. military to operate with one eye on a dubious foreign supply chain.
TCU members are urged to contact their legislators immediately and ask them to support a full investigation of the circumstances that led to this outrageous decision. Click here for additional information and instructions about how to send a message to lawmakers