Air Force goes European with new refueling planes Update: Did spec change treat Boeing unfairly?
posted at 9:59 am on March 1, 2008 by Ed Morrissey
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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.
UPDATE: Michelle is following the political fallout, so be sure to keep an eye for updates there. Also, I do agree with one commenter that the US has a strategic interest in keeping its manufacturing and procurement activities in the US — but if that was the case, then EADS should not have been allowed to bid on the project at all. EADS, by the way, has American facilities, and I assume most of the work would be done at those locations.
UPDATE II: Some believe a change in the specs during the R&D phase of the contract could gain Boeing some traction on the appeal:
As Boeing awaits news due at 2 p.m today of the Department of Defense’s decision on the long-awaited air refueling tanker contract, a controversial late change to the Air Force’s selection criteria has emerged that may provide grounds for a formal protest by the losing side.
Two analysts who have closely followed the tanker competition confirmed independently that the Air Force recently changed some of the criteria used to assess the performance of the competing planes, Boeing’s 767 tanker and its rival based on the Airbus A330 proposed by Northrop Grumman and Airbus parent EADS.
Each expressed surprise that the Air Force, after going out of its way to appear painstakingly scrupulous and fair, made such a last-minute adjustment.
“What we have is an appearance of fairness issue. The rules of the game were changed after the game commenced,” said aviation industry analyst Scott Hamilton. “This just really smells.”
Well, it wasn’t exactly a “last-minute” change. Forbes reported it in January 2007, 13 months before the award. That’s later in the contract than optimal, obviously, but not a surprise. Both bidders knew about the change in direction, and Boeing had time to adjust their approach. They apparently did not read the tea leaves correctly.
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Amusing seeing Seattle, which prides itself on its anti-military views as much as its lattes, screaming that it isn’t getting a military contract for a bunch of obsolescent 767’s. One would think that they wouldn’t want to be tainted by being involved in military production.
Maybe Bagdad Jim McDermott can lobby the Air Force to turn things around…
Realist on March 1, 2008 at 10:07 AM
This thread will be full of EU bashing in 5…4…3….2
The way I understand it the production system will be similar to the way Honda and Toyota build cars in the US.
Some of the jobs will be in the EU, some here.
We do exactly the same thing when we sell our fighter aircraft, radar systems, communications gear to a foreign country.
This subject is going to bring the EU and Protectionist crowd out in droves. It is also going to end up on Obama’s and Pelosi’s gotcha speeches today. More economic fearmongering can’t hurt.
Limerick on March 1, 2008 at 10:11 AM
Good! These aircraft companies have taken atvantage of the american taxpayer long enough. It’s time they found out that they are doing business in a free market economy.
Long run, it’s good for them and us. They need to get lean, even on military contracts and be competitive.
conservnut on March 1, 2008 at 10:13 AM
Guess I am a bit naive in how these bids are tendered. I assumed specs demanded certain capabilities and whoever could deliver those capabilities at the lowest cost won the bid. However, it appears the specs aren’t written that specifically, so the company has more latitude. In that scenario, if they guess wrong, they lose. I guess it still isn’t as complicated as an IRS form.
a capella on March 1, 2008 at 10:25 AM
Sure, Airbus relies on the Free Market, except of course that little, insignificant issue of Government Subsidies.
cat-scratch on March 1, 2008 at 10:27 AM
Did you read the article? The Boeing plane was $35M less expensive per plane.
The only good thing I see in the article is that they will be assembling the tankers in Mobile which is just down the road for me.
Personally I’m really not comfortable giving the EU a foot in the door for our military contracts.
jdog on March 1, 2008 at 10:29 AM
Boeing needs to be more inovative. They need to quit trying to make the one size fits all marketing work.
Bottom line is that Airbus provided a superior product that more closely met customer demand.
The government subsidies had no effect. The product was more expensive. Boeing lost on product value to the customer. I suspect because they took the customer for granted.
conservnut on March 1, 2008 at 10:32 AM
Do we know if they’re going to be building them in Europe? EADS has a number of facilities in the US and has been trying to increase its footprint here. So they might actually be employing Americans for this. I’d be interested to know. I know they’ve been trying to Americanize some of their operations in order to get more contracts. And, Lord knows it’s more expensive for them to operate in Europe.
CP on March 1, 2008 at 10:33 AM
The Marines opted for the Harrier years ago. The Army uses, as it’s main weapon in the M1A2Abrams tank the 120mm Krupp smoothbore. This isn’t anything new.
Limerick on March 1, 2008 at 10:34 AM
Sorry, bedrock belief here…
No major component of our military should relie on outside sources, not even if they are from an “allie”.
Things change… people go from allie to enemy at the drop of a hat… and our defense should never be held hostage to the politics inside another country.
Romeo13 on March 1, 2008 at 10:37 AM
Spot on. The liberals in Seattle are bleating as we write. As it happens, the EADS consortium looks as if it is going to be assembling all the planes in Alabama, and expanding their plants over here.
Protectionism is never a panacea for the economy, as much as the liberals and leftists would like to pretend it is. The advantage of free trade is that it boosts the incentive to competitiveness in our own market, and this should act as a wake up call to Boeing to improve on innovation. There are plenty more big military contracts down the road for them to take.
Pax americana on March 1, 2008 at 10:40 AM
I think CP (10:33) raises an excellent point.
Customer satisfied and price met. Let’s find out where these things are manufactured before Hillary and Obama and Boeing (special interests anyone?) go off on a tangent.
bongo on March 1, 2008 at 10:41 AM
Which member of NATO do you see us fighting in the coming decades? Get real.
Pax americana on March 1, 2008 at 10:42 AM
I’m waiting for Mr Obama to say ‘I will cancel that contract the day I enter office and see to it that American jobs are saved. Praise be!
Limerick on March 1, 2008 at 10:44 AM
Do we know if they’re going to be building them in Europe?
To some extent, but they are going to be assembling them in the USA. But you know what, Boeing does this too! For all their jibber-jabber about “buy American”, Boeing has been relentlessly sending manufacturing and jobs offshore. The foreign content of the 787, for example, approaches 70%. Here is a good article on what Boeing has been doing:
http://www.custac.buffalo.edu/content/documents/OccPaper35.pdf
Lehuster on March 1, 2008 at 10:46 AM
So they might actually be employing Americans for this.
They will employ 25,000 Americans!
Lehuster on March 1, 2008 at 10:47 AM
“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.
Ha, this is the idiot who said the KC-30 would lose because it was too big, and the 767 was a “better match” for Air Force needs.
Lehuster on March 1, 2008 at 10:57 AM
Someone has to say it… Thanks, Maverick!!
drunyan8315 on March 1, 2008 at 10:57 AM
I would presume that there would be a security equivalent to manufacturing quality control involving strictly, Air Force personnel.
captivated_dem on March 1, 2008 at 11:06 AM
I suspect that the real key to selection was that Northrop-EADS designed and built to the specs provided by the Air Force (they developed what the Service needed). This was probably in contrast to Boing who tried to shove their product down the throats of the Air Force. I’m sure the Washington State gaggle of leftist politicians will try to overturn the decision but they’ll likely have no success.
rplat on March 1, 2008 at 11:06 AM
Well,
I am all for this deal. The aircraft will have much better capabilities than the 767 class. Boeing was basically hoping to get this contract as a means of extnding production of the 767 airframe. As it stands, that line is due to shut down soon.
As a veteran, I have no problem with this contract. Our military already has many foreign systems and partial systems in use. As was stated by a poster above, our main battle tank uses a Krupp gun, and our militaria uses a Baretta pistol. Many of our uniform clothing items are made overseas as well.
Our military contracts should NOT be used as a works program to keep Americans emploued. Contracts should be let to the company that can BEST meet the needs of the end user, and who can demonstrate competancy in maintaining the contract through it’s end.
respects,
AW1 Tim on March 1, 2008 at 11:12 AM
I live in Mobile, and this is really huge for this town. In fact, Mobile is the number one growing city in the country which I am sure pisses off all those who were raised to hate all things Southern.
It is supposed to provide 1600 jobs directly from EADS, and that is not even including the support jobs that will be required.
ClassicCon on March 1, 2008 at 11:14 AM
The other thing to note is that if Boeing hadn’t been so stupid and greedy on the tanker lease deal back in 2003, if they hadn’t openly tried to screw the government on price via a sleazy backroom deal with corrupt government officials, they would already have sold their tankers to the Air Force and there wouldn’t even have been a competition for them to lose! Serves them right that they are punished for their dishonesty.
Lehuster on March 1, 2008 at 11:14 AM
This just smells of sour grapes. Boeing gets contracts left and right, but they lose one and now they’re moaning about it? Get real - it’s called business. You win some, you lose some.
amkun on March 1, 2008 at 11:17 AM
Why does someone have to say it? It has nothing to do with anything.
Christoph on March 1, 2008 at 11:18 AM
The 330 is a much newer airframe and the proposed tanker will haul 20%(!) more fuel and be able to loiter considerably longer than the Boeing tanker.
The 767 is at the end of it’s service life, and, had it been adopted, the military would be the only purchaser, making the cost of spares and repair parts problematic over the next 10-20 years.
This is precisely the problem I faced with my last car selection. There simply wasn’t an American-made car that got 30+mpg, could accomodate my (admittedly massive) 6′5″ carcass and cost under $15K.
I would have preferred to drive American, but another country met my RFP handily.
It too is assembled in the U.S. with U.S. labor.
heldmyw on March 1, 2008 at 11:20 AM
Agreed. You should absolutely hamstring your military with poor equipment now to prepare for the coming war with Spain.
Christoph on March 1, 2008 at 11:21 AM
Most of the EU won’t fight by our side against Islam in Iraq, but they are happy to sell us our weapons at a substantial profit. Do these Air Force generals all drive German cars as well?
There is a huge difference between foreign companies manufacturing in the US, and US companies manufacturing in the US. It makes logistical sense in customs alone to manufacture goods here in the US to foreign corporations. Employing Americans to work for foreign companies does not equate with Americans owning the companies that manufacture the products we need.
Hening on March 1, 2008 at 11:22 AM
Ever read any history? Countrys can and do change philosophy and alliances all the time…
Look at Eastern Europe! Who would have thought 30 years ago that they would be better allies of ours than France or Italy?
I see a great change coming in Europe as the people there finaly wake up and see the Islamic influence… and either fight it out, or succumb to it… either way, there will be changes. If these changes are NOT Pro American, then basing a major defense system supply line from there could be problematic.
Personaly, I’m ALL for a Law that any defense related item HAS to be manufactured in America… I’d rather spend the money here, than there, even if it costs a bit more to do so.
Romeo13 on March 1, 2008 at 11:27 AM
I understand your point but who in America is going to compete with Boeing on that? They have a monopoly on the market. We give the specs, they say can’t do. Do we wait for another company to spring out of the ground on investment capital?
Like I said, I understand your objection, but I’m trying to figure out how you avoid being left with nothing in the supply line.
Limerick on March 1, 2008 at 11:35 AM
Even if it is being built in Alabama, it still rubs me the wrong way. The anti-American tools of the EU continually hamstring American companies, and subsidise their own just so they can compete. A 1992 agreement they honored in letter not spirit.
They just now got around to reforming the 1992 agreement. Which if the EU is the EU will mean: you scratch my back, I kick you in the balls. But we’ll see.
Theworldisnotenough on March 1, 2008 at 11:35 AM
As to the Baretta? it sucks. We have better here in America…
The M1A2 gun? Rhein metal… and amazingly….
“It is also produced under license by General Dynamics Land Systems Division and used by the U.S. military under the designation M256″
Romeo13 on March 1, 2008 at 11:38 AM
Well, then I think you’re for a weakened American military, unintended negative consequences, and central control of the economy. To quote the Heritage Institute:
heritage.org/Press/Commentary/ed081005b.cfm
But your belief that American manufacturers somehow *should* be able to produce the best military equipment by making it all in the United States, while ignoring the proven benefits of competition, while the rest of the world acquires their military equipment through global trade and a free market economy, would undoubtedly bear fruit:
Lost battles. Dead soldiers, sailors, and airmen. Insecurity for your family.
Christoph on March 1, 2008 at 11:42 AM
WRT Boeing costs savings: Can anyone name the last time Boeing was on time and on budget with a big project like this?
NPP on March 1, 2008 at 11:42 AM
‘The Fence’….no…wait….
Limerick on March 1, 2008 at 11:45 AM
Yes, it was toward the end of October, 1982. A Thursday, I believe.
Christoph on March 1, 2008 at 11:46 AM
Great post ED. Great backround, from what I hear Alabama is the big winner and liberal Seattle get the hit.
KBird on March 1, 2008 at 11:46 AM
In short, yes, but hardly accurate, Ed. Boeing gave a lower price with less capabilities, and Northrup/EADS gave a higher price with more capabilities. You provided no basis for saying Boeing offered a better price.
Dusty on March 1, 2008 at 11:46 AM
Very well put, Dusty, and I’m disappointed I didn’t catch that myself.
Christoph on March 1, 2008 at 11:54 AM
What rubbish. Britain, Denmark, Poland, the Czech Republic, Britain, Holland, Italy (till their job was done); and in Afghanistan EU nations make up half the NATO force. They’re not supplying us with weapons, but refuelling aircraft. But just keep on wallowing in ignorance. I suspect some of these countries will have better policies against Islamofascism than us if Barack Hussein Obama gets his way.
Ever heard of NATO? Do you know many of these nations have fought against us since WW2? Do you have any idea what a mutual protection alliance is? Funny that Britain is spending itself broke helping us in Iraq and Afghanistan. Funny that France is just about to increase it’s contribution to fighting the Taliban. Must be a ploy to fool us into a false sense of security. There are just so many nations outside Europe willing to help us in our foreign wars - look at all those Russian, Chinese, and Indian troops fighting by our side! The Pentagon is just terrified of our European allies - much more of a strategic threat than the Russians, Chinese and Islamists. Frankly, I’m not surprised we’re struggling for allies with attitudes like yours. Your grasp of global politics is about as convincing as your grasp of English grammar.
Pax americana on March 1, 2008 at 12:05 PM
Wow… pretty ballsy… um… I happen to be retired US Navy myself, have been to the front… have you? I’ve worked in both destructive and non destructive testing of US Navy Electronic systems in both communications and Radars… and participated in numerous boarding actions during Desert Storm…
We could easily have competition within the US itself, OR, as has been done with the M1A2 main gun, license it to be built in America.
Romeo13 on March 1, 2008 at 12:19 PM
Ever heard of WWII? About how many countries changed alliances prior, and during, and after, that war?
How about WWI?
Face it, the EU is NOT looking out for the best interests of America. With a resurgent Russia, and the Middle East, and Turkey, and the new problems in Eastern Europe… are you willing to bet the Security of the US on an alliance that was built to confront an enemy that no longer exists? (USSR).
Romeo13 on March 1, 2008 at 12:23 PM
Is it too much to ask that the US take the side of the Europeans against the Muslims? In Bosnia, Serbia (incl. Kosovo) and Azerbaijan Pro-American means Pro-Muslim.
aengus on March 1, 2008 at 12:28 PM
This part is wrong. Sometimes the protest does succeed. In fact, it often does, and Boeing itself was on the losing end of a recent protest on an unrelated program filed by a competitor. In other words, the competitor did win the protest. Furthermore, the GAO does not assume anything. The protest is reviewed based on the facts, and there are no assumptions of right or wrong. Finally, I cannot see how Boeing can damage its reputation by filing a protest. If Boeing has a legitimate claim, then it will not damage its reputation. On the other hand, if the claim is frivolous, then perhaps the protest should not have been filed after all.
Log on March 1, 2008 at 12:48 PM
The chickenhawk argument? Over defense procurement?
Excuse me while I laugh at you.
Oh, not for your service or personal bravery. I respect those. Bordering operations are dangerous work, no doubt about it.
However, I assume you were an NCO from your description. And you bring up your boarding work in a discussion about manufacturing each and every “defense related item” in the USA… why, exactly?
This experience has little relevance. Argue the merits, if you will.
Your view is American could end up fighting any country so shouldn’t purchase anything from these countries, in case they cut off supply.
Ed Morrissey’s, the U.S. Military’s, and the Heritage Foundation’s view is that competition produces better products.
Hardly earth shattering.
Now, you suggest that you can “easily have competition within the USA itself”. But when the Heritage Foundation and the military, who frankly know made in America solutions are more popular and easier to sell, looked at this, they learned that more competition is better than less competition and produces better results.
Boeing couldn’t deliver what the Air Force wanted. As Limerick asks, “Do we wait for another company to spring out of the ground on investment capital?”
As far as producing under license goes, your next point, the planes will be largely assembled in Alabama. Further, as Lehuster points out, the foreign content of a Boeing 787 approaches 70%, up from the already significant foreign content of the Boeing 767, most of said foreign content produced by the Japanese, our former and relatively recent enemies. Obviously Boeing is farming out more and work to foreign countries.
So what was your point about this specific contract again?
/laughter off — resume serious listening stance
Christoph on March 1, 2008 at 12:52 PM
*
BorderingBoardingChristoph on March 1, 2008 at 12:53 PM
If one supports the troops, that should settle it right there.
MB4 on March 1, 2008 at 12:55 PM
Do we know if they’re going to be building them in Europe? EADS has a number of facilities in the US and has been trying to increase its footprint here. So they might actually be employing Americans for this. I’d be interested to know. I know they’ve been trying to Americanize some of their operations in order to get more contracts. And, Lord knows it’s more expensive for them to operate in Europe.
Log on March 1, 2008 at 12:55 PM
Log, don’t bring facts into this.
Christoph on March 1, 2008 at 12:57 PM
Bullshit. The victory here is for Pentagon douches with absolutely zero incentive to manage cost — the sky’s the limit, literally. So they take the larger, riskier, much more expensive plane, built by the fucking EU. (h/t to Limerick - gfys).
Once again, the Pentagon proves that it is utterly disconnected from reality and responsibility. They make me sick.
Jaibones on March 1, 2008 at 12:57 PM
Being retired USAF and having flown in KC-135s in the 70’s, the key really is size. Our forces need maximum fuel available continually in a conflict in order to execute sorties at maximum efficiency.
Northrup is the maker of the B-2 stealth bomber. They and EADS will work out fine. Boeing will scratch their collective heads and come up with a winning bid in the future, guaranteed.
jimbo2008 on March 1, 2008 at 12:59 PM
conservnut, explain how spending 28% more for every plane and sending the money to Europe helps us “get lean”?
Jaibones on March 1, 2008 at 12:59 PM
What the heck was that for? We disagree on the wisdom of purchasing this aircraft. I haven’t bashed anyone’s argument or made any kind of personal attack what-so-ever.
Limerick on March 1, 2008 at 1:06 PM
Way to:
1. Call the Pentagon douches. How dare Donald Rumsfeld waste his valuable time trying to assist these worthless sons of bitches on a memorable day.
2. Give us your detailed and reasoned analysis of why the Air Force’s procurement team’s work was valueless, based on your own great specialized knowledge.
3. Use the “F” word in addition to douches. It always enhances the seriousness other people assign to your arguments.
4. Reinforce how the Pentagon douches make you sick. (They are the true enemy, after all.)
Christoph on March 1, 2008 at 1:07 PM
Now there’s relevant military experience.
Christoph on March 1, 2008 at 1:08 PM
[Romeo13 on March 1, 2008 at 12:23 PM]
That’s addressable. Abrogation of the contract means any proprietary rights to the design become the property of the US government and the Fed distribute them to American companies to continue production. I have little doubt that will be a contract provision.
I don’t know what, if any, are the ramifications of choosing Northrup as it relates to preventing the dissemination of what might include unique technology, but aside from that, I don’t see this as betting the Security of the US.
Dusty on March 1, 2008 at 1:10 PM
As a former Boeing employee who worked exclusively on Air Force contracts, it appears that Boeing’s main selling point…”but we are Americans” was not enough to overcome an inferior product.
I have yet to hear a reaction from my representative, Jim McDermott. I am guessing he is simply not aware of this tanker deal of which you speak.
AndrewsDad on March 1, 2008 at 1:20 PM
Dear conservnut, this would be noble, if they would not be government subsidized. Alas, they are - thus, no fairness.
Entelechy on March 1, 2008 at 1:24 PM
cat-scratch, and probably others, I had not read your comments first, thus my “government subsidized” comment, above. You get full credit :)
Entelechy on March 1, 2008 at 1:27 PM
How much better a Boeing if it can only transport 80% of a battalion rather than a full battalion? How much better if you need two Boeings to refuel a bomber squadron, whereas one Northrup will do? What if transportation requirements of the military are always 10% short of what’s needed and, therefore 60% in excess of costs, because Boeing’s plane is too small. What if the initial cost plus the ten year cost of operating with Boeing’s aircraft is expected to be $35M more than it would be with the Northrup.
I don’t know that any of these things are true, but based on your point that they are spending $28M more on each plane can just as easily be taken by Hess to mean that they would be better off delivering fuel to the local gas station in 5 gallon cans.
Does anyone know the revenue distribution between US and French concerns in the Northrup proposal?
Dusty on March 1, 2008 at 1:27 PM
The better plane won.
Period.
And for all the Boeing backers: don’t worry.
Boeing will get the contract for the KC-10 replacement.
Et tu Brute on March 1, 2008 at 1:33 PM
Airbus had been looking for an American front company for a while and finally found what was left of Northrop. Full military power spin at work by both the media and the Air Farce with the claim this is a Northrop aircraft, pay no attention to the fact that the aircraft will fly from France to the fit-up facility in the states. Some assembly required at best and certainly not core technology jobs that will last. You should also realize that we have allowed a government subsidized foreign competitor to Boeings commercial products to setup shop on our soil…just F’in peachy! As for the lame reasoning for the Airbus victory, composite/mixed mission flexiblity is back in fashion, jack of all-master of none, military history is littered with smoking holes that were the products of committee procurement.
dmann on March 1, 2008 at 1:44 PM
Forgot to add, my tax dollars are best spent on American products, this is not a tier one combat aircraft, this is a support bird and as such a prime consideration should be Made in the USA.
dmann on March 1, 2008 at 1:48 PM
Actually Boeing probably should have been cut from bidding on this contract in 2003 after it was caught with thousands of Lockheed-Martin documents in its possession. The rocket division was cut out of bidding for a short period, and some launch business shifted to L-M, but this massive theft of corporate information should have disqualified them from all new programs.
The highly unfavorable (to the government) lease back proposal for the tankers, engineered by Tom Daschle’s lobbyist wife, didn’t help Boeing’s reputation with the Air Force either.
All things being equal, the contract was going to EADS/Northrop because of the longstanding animosity of the USAF to Boeing.
Corky Boyd on March 1, 2008 at 1:50 PM
The Air Force needs a big plane that carries fuel. The Boeing 767 is a smaller plane.
So, what are you talking about, precisely? Is the Airbus plane pulling double duty as a fighter, a bomber, airborne early warning, can opener?
Christoph on March 1, 2008 at 1:50 PM
Boeing, as evidenced by the 787 program, has shown little loyalty to the American worker. I fell no pity for them.
ronsfi on March 1, 2008 at 1:58 PM
So they take the larger, riskier, much more expensive plane, built by the fucking EU.
It may be larger, but it provides more capability - more bang for the buck. It is not riskier.
As for the bleeping EU, are you aware that we sell billions of dollars of arms to the bleeping EU every year? That the balance of arms trade is still massively in our favor? That we would be the biggest loser if we gave them the middle finger?
Lehuster on March 1, 2008 at 2:01 PM
we have allowed a government subsidized foreign competitor to Boeings commercial products to setup shop on our soil…just F’in peachy!
Boeing is just fine with creating its own future competitors by setting up production facilities on foreign soil - in Japan, South Korea, and China, to name a few - so if they want to bang the drum for “buy American, built in America” they need to knock that shit off right now.
Lehuster on March 1, 2008 at 2:07 PM
I don’t think “aware” is what Jailbones does best.
Christoph on March 1, 2008 at 2:08 PM
When the protectionists are done ripping their robes from their chests, take the time to look at this link that clearly shows the difference between the capabilities between the two aircraft.
After you’ve read that, consider that Boeing’s aircraft would have only been about 70% U.S. made. The other 30% is made in Japan and Italy.
By comparison, 60% of the KC-45A will be made here in the U.S., with 13% of it being made in France and the remainder in other countries.
Congress has stated that an aircraft that is 50% or more made in the U.S. is “American-made”.
Is the 10% difference worth blowing a gasket over? Or does it make more sense to purchase an aircraft that has the clear advantage in capabilities?
Read and be informed.
Et tu Brute on March 1, 2008 at 2:14 PM
Christoph and Lehuster
I will cheerfully respond to your points a bit latter, I have to go remove about 8″ of global warming form the driveway so my better half can leave the house. There are several good articles about the requirements, multi mission, cargo, medivac, etc. they all fall under the air mobility command. The KC-10 extender was billed as such a platform and is constantly tasked with hauling cargo as opposed to fuel…muliti mission usually results in crap!
check Airliners.net
tab forums, scroll down military and space
dmann on March 1, 2008 at 2:14 PM
Et tu Brute on March 1, 2008 at 2:14 PM
Amazing, flight worthy whilst less than 50% complete…this must be Barry O’s Messiah One!
dmann on March 1, 2008 at 2:16 PM
When you do so, can you contrast both planes? Because you may be right on Airbus, but wouldn’t Boeing have likewise sold its plane on the basis of multiple capabilities?
Christoph on March 1, 2008 at 2:19 PM
All the pro/con comments here have some credence. This, however, is the most plausible, and least known/understood/remembered of all:
Payback, and supermode of ethics classes, be-better-than-human programs, PC, just to potentially gain another contract. Somewhere also a “kiss and make up with Europe”. No politics ever, never…It’s one more nail in the “American made” coffin. Yes, I agree with those of you who said that Boeing outsources some of its manufacturing too. And, no, I’m not a protectionist, if the trade is business-fair, not subsidized.
The bottom line is that not only is Airbus subsidized by its governments, but the entire world is, on top of it, subsidized by America, at the multi-layered cost of the American tax-payers. Ah, and the rest of the world really love us for it. There really is nobility, fairness and justice.
Fairytales are indignant.
Entelechy on March 1, 2008 at 2:36 PM
“…the entire world is, on top of it, subsidized by America…”
All the while America borrows money from the rest of the world to subsidize it. You make a good point, yet it’s not that simple.
Christoph on March 1, 2008 at 2:58 PM
Well, things were not equal, since the Boeing and EADS planes were not the same.
Yet it is absurd to think the Air Force somehow hates Boeing. Boeing does billions of dollars in business with the Air Force every year.
Lehuster on March 1, 2008 at 3:02 PM
Maybe the Air Force hates Boeing so much that they’re willing to settle for more fuel for their airborne fighter planes.
Christoph on March 1, 2008 at 3:09 PM
Nobody should be naive enough to think that the Air Force didn’t take the political fallout into account. That tells me that the Airbus (ptui) product must have been that much better.
Boeing will survive, and lesson learned, they will not try to submit some out-of-date, piece-of-crap airplane for the next contract. I have an ex brother-in-law who works for Boeing, and I want them to succeed, but not if they are going to take advantage of their American-ness to exploit the contract/bid process.
urbancenturion on March 1, 2008 at 3:48 PM
I’m just happy to finally see the next generation of tanker coming on the scene. The re-engined KC-135R and T model tankers are 50 years old and it is time to replace them. The only stop gap was the KC-10A which I was also able to fly in back in the old days. They only bought 60 from McDonnell-Douglas with 59 still in operation. Still the KC-135R is a big improvement over the old KC-135A steam jets we used to fly.
KC-135A on March 1, 2008 at 3:50 PM
Here are a few relevant facts about this competition. The role of this plane will involve operating from smaller, less durable runways typical of foreign military and 3rd world bases. The wider Airbus wingspan and heavier runway loading was considered a significant disadvantage by many in the Air Force. More 767’s can fit into a limited area at forward bases and more refueling booms in the air has been considered preferable to fewer, larger capacity aircraft. If higher capacity per plane were the dominant criterion, Boeing would have bid the 777, which is even larger and has much more capacity than the A330. Boeing was apparently misled by the Air Force about its relative preference for capacity over flexibility.
Also, Boeing has been building tankers since the jet age began, and is on its 6th generation boom, whereas Airbus is building its first generation tanker. It will be great if Airbus gets its tanker right the first time, but Boeing has already delivered 767 based tankers to Italy and Japan.
As for US content, the 767 is virtually all US made. Airbus will do final assembly in Alabama, but all the large assemblies except engines will be shipped over from Europe and bolted together here.
While I’m not a fan of “Buy American” government policy, in this case it would appear that Boeing was mis-directed by the Air Force to favor flexibility over capacity, as it could have easily offered its larger 777. The Air Force may have felt the political winds were not favoring Boeing after the lease debacle, and didn’t want to have to defend a pro-Boeing decision. Now John McCain’s victory over Boeing is complete.
Orcaswa on March 1, 2008 at 4:11 PM
KC-135A on March 1, 2008 at 3:50 PM
Agreed! Know back to the fun….This decision and its implications can viewed as a paradigm as it were of the ongoing and ever lively debates regarding; globalization vs. protectionism, the reality of geopolitical influence,
the immediate need vs. waiting for future technologies, and many other subjects. My best guess is after the smoke clears we will see a compromise solution involving a combination of dedicate tanking aircraft (Boeing) and multi-mission capable aircraft (EADS/Northrop). I hate to bailout of this forum again…but work (6:00pm - 6:00am) is coming up fast and I need to go through my preflight routine ;-> As I stated earlier, AIRLINERS.NET has a wealth of information provided by many professional experts employed in the aviation field, as for the politics, that’s best discussed here!
dmann on March 1, 2008 at 4:25 PM
Yes. Key word: sell.
It’s a good point, though. My main point is that the Pentagon in general operates with no sense of financial restraint whatsoever. There simply is no number that’s too high.
Jaibones on March 1, 2008 at 4:44 PM
Other posters have already said, and I agree, we need to keep our military industrial base here.
Just before wwII we had a large industrial base. When it was time to build op Englands, Russias, and our military we were able to do it very fast with high tech and high quality equipment. By our nature we were prepared to do so.
Today much of our industrial base has been sent over seas. We no longer have the infrestructure or possibly even the skill to accomplish a fast high tech military buildup. We are already dependent on china and others to build our military!!!! Do you see the security problem with this?
For the sake of natiional security in very volital times we must keep, naa rrebuild our industrial base.
allrsn on March 1, 2008 at 4:44 PM
Sorry. I’m out of bourbon.
Jaibones on March 1, 2008 at 4:45 PM
I do not think it is the pentagon but congress pork. Congress constantly forces tens of millions of dollars of pork on the military that the military does not want.
allrsn on March 1, 2008 at 4:46 PM
Exactly.
Oroso on March 1, 2008 at 4:50 PM
This deal could affect McCain. The question is, how?
Note - the article is dated, though full of relevant information.
Orcaswa’s excellent comment prompted me to look into McCain’s influence on aerospace defense. He landed the crooks in jail, and had some fired, but he has also affected thousands of American jobs (not to confuse with the larger illegal immigration issue). Where will the chips fall?
Entelechy on March 1, 2008 at 4:57 PM
This issue is decades old and repetitive: the obscene waste of taxpayer money on military junk and the frequent involvement of both the congressional porkers (allrsn) and the Pentagon lifers who pave the way for another pension from the defense contractors in a few years.
Add to that a huge and essential Air Force contract going to a key EU-subsidized company, and my protectionist devil comes to life. But I have no particular love for Boeing, either, frankly, so if this was an overdue corrective device for them, then so be it. I don’t believe for a second that, given the same requirements, Boeing could not build a superior piece of equipment to Airbus.
Jaibones on March 1, 2008 at 5:05 PM
Is the contract priced in euros or dollars? The way the dollar is falling vs the euro, this could get interesting.
meci on March 1, 2008 at 5:26 PM
Interesting, you take ONE article from a group, and dimiss the real world experience of someone who had to work the system for years.
Yes, I was an NCO. In the Navy, there are NO OFFICERS who know crap about Electronics. Everything is run by NCOs… even the Electronic Warrants are mostly Ex ETs… so when SIMA or MOTU comes to call, guess who they talk too.
Lets see, Commander Submarine Pacific didn’t laugh at my opinions when I worked for him… interesting that you would…
But don’t worry… you are soooooo knowledgable on this subject that my real world experience MUST be wrong…
And as to the arguement of the bigger plane with more time on station… bet the Navy, Marines, and Army HATE it… because they have to be stationed further from the front, and are restricted as to where they can be based.
Romeo13 on March 1, 2008 at 6:37 PM
Got any sources to back up your claims?
Yes, Boeing has delivered some KC-767’s to Italy and Japan already, but with problems. Those tankers are not the same one that would’ve been delivered to the USAF. The US variant would have been the KC-767AT “Advanced Tanker” (based on the 767-400) with a larger wingspan (for more fuel) and more capacity (heavier) than the export version.
Boeing realized their initial KC-767 design couldn’t meet the mission requirements, so they tried to make an undersized plane “bigger”, all the while singing the slogan that the KC-767 Advanced was the “right size plane”. So no, Boeing wasn’t “mislead”.
Boeing miscalculated and they paid the price for it. They’d been ramming the KC-767 down the Air Force’s throat for years.
Read the facts here
Et tu Brute on March 1, 2008 at 6:50 PM
Hmm, quite a lot of factors not mentioned in the thread yet, but quite a few red herrings flopping about…
First, while initial unit cost per plane is an important factor, it isn’t the only factor that was likely considered. Operations, maintenance and sustainability issues were probably also studied to the point that a lot of people were probably ready to stick forks in their eyes instead of sitting through yet another meeting replete with 150 slide PowerPoint extravaganzas.
Some of these ‘extended tail’ issues were probably deciding factors, and although I thank whoever that I wasn’t subjected to the process of making the selection by forced participation, it isn’t too difficult to guess what some of the points may have been like - particularly with the ‘bottom line’ summation of citing greater capacity. Greater single aircraft capacity means fewer flying hours - i.e. use only two planes instead of needing three, or being able to use one plane instead of two, to accomplish a given mission profile. And let’s bop at least one red-herring in the snout along with that - if you need fewer planes, that’s a lower footprint at a deployed location - translating to even more ’savings’ in the cost of doing business area, and that deployment location, using planes with longer range, loiter, and offload, by no means needs to be bleeding edge forward, nor limited and austere - with a longer range, you have more choices for locations that can support something bigger, that works just fine.
As for the risk management aspects of not buying American on the basis the manufacturer’s front office locale could turn on us in a New York minute, thus leaving us in a lurch - well, it’s also a possibility that all of the molecules in our bodies could spontaneously disassemble and we end up as a pile of goo on the floor. Not likely, but possible. It would take a fairly major turn of events to turn the EU to such an extent the production run of the aircraft would be threatened. And once the aircraft is built, and in the US inventory, our vulnerability to the withdrawal of prime contractor support decreases substantially - as US companies could, and would, step up to the opportunity to manufacture, produce, and provide follow on support for these weapons systems should the need arise. There are existing examples of this in the US inventory as you read this - and the prime contractor happens, by chance, to be Boeing, but they no longer have anything to do with the items in question.
As for Boeing losing this one - too bad, so sad, try again tomorrow, and next time don’t try and short cut your way to a sweetheart deal that just ends up damaging US preparedness by delaying the replacement of a critical combat system because you dipsticks got overly greedy and chummy with upper echelon DoD procurement types. Build your Dreamliners, and maintain your skills with your civilian business. There will be future opportunities, given the age of quite a bit of the USAF inventory. That the competition was, and quite probably will be again in the future isn’t so much Boeing’s fault for being any better, faster, or cheaper to the point they vanquished all domestic competition - no, cast your gaze for who has brought us to this point, that the ‘diversity’ in the ‘military industrial complex’ is virtually non-existant towards Capitol Hill, and consider who was in charge running around spouting off about ‘the end of history’ and a ‘peace dividend’ as a reason to pare back on overall acquisition and maintenance of America’s military arsenal, thus creating the current atmosphere of ‘how’d we end up with all this old stuff we need to replace?’, and the attendant sticker shock from the need to do wholesale, fairly large immediate buy replacements.
My bottom line is - the Air Force needs a new tanker. R model -135’s and -10’s are simply too long in the tooth, although we are stuck with them for many, many more years to come. Who provides it is not nearly as important as the overall cost of ownership value and the fulfillment of the stated needs of the service - in other words, what it is they need to get their job done in what they believe to be the best manner available. Settling on ’sorta good enough’ due to what-if hypotheticals and sentiment (for a corporation that probably doesn’t deserve it) is to poorly support the airmen we expect to go out, at risk of life and limb, and protect us; and as such, it is to provide ourselves with less than the best protection we can get.
Plus, the other side of the ‘EU subsidized’ coin (no pun intended) also means this - in a way, the Euros are helping to pay for our stuff. Probably not really the case, but it does evoke a snicker when considered in that light.
Wind Rider on March 1, 2008 at 7:14 PM
I laugh at you making the chickenhawk argument, then bringing up your naval boarding experience, in a conversation about what type of tanker the air force should use.
Christoph on March 1, 2008 at 7:25 PM
Well said, Wind Rider.
Et tu Brute on March 1, 2008 at 7:45 PM
Et tu Brute on March 1, 2008 at 6:50 PM
Your argument that Boeing had to try to push an undersized 767 on the Air Force simply ignores the fact that Boeing could have offered the 777, which is even bigger and more capable than the A330. If size and capacity were the only issues, the 777 would clearly have been superior to the A330. The reasons the 767 was selected as Boeing’s entry were that it more closely matches the infrastructure footprint of existing KC135’s, is able to operate on substantially weaker runways designed for military jets and in 3rd world areas, and the fact that more smaller planes can refuel more fighters at one time than fewer, bigger planes.
Orcaswa on March 1, 2008 at 8:15 PM
Yes, Orcaswa, and of the planes able to operate on the needed runways, the Air Force chose the A330 as superior.
Christoph on March 1, 2008 at 8:34 PM
In a word: Baloney. You still haven’t shown where you are getting your information.
Have you even read the links I provided?
Boeing had already invested substantially in the KC-767 design. Re-tooling to make the KC-777 would have been far too expensive for this competition, even for Boeing. So no, it is not that easy.
Boeing hadn’t planned on the competition from Northrop. For years they thought they had the tanker deal in the bank.
They were wrong. They were wrong in 2003. And they’re wrong now.
The fact that they changed their design plan to build a larger aircraft proves that even they knew their original offering couldn’t make the cut.
Boeing has only themselves to blame for losing this contract.
Et tu Brute on March 1, 2008 at 8:59 PM
Typical arguement for one who has no rational arguement…
You laugh at someone who has a LOT of experience in the DODs procurement system…
Without of course, countering what I said… because you are not talking from experience, or personal knowledge… you are the outsider trying to make a point about a system you really know nothing about…
So, tell me…. whose opinion should people listen to, a person involved with the sytem? or one who just dispareges those who were involved with the system?
Please, continue your laughing… its… amusing…
Romeo13 on March 1, 2008 at 9:07 PM
Thanks, gents. Now this thing finally begins to make sense. I had wondered (in a vacuum, admittedly) why Boeing had offered the 767 over the 777.
The “buy American” argument tends to fizzle the moment you review Boeing Commercial Aircraft (BCA)’s continued push to outsource its manufacturing base. For the Union folks, outsourcing will always equal “bad”; however, there are usually some very good reasons to outsource other than just cost. Boeing sells its product worldwide, and must enter into reciprocal sourcing deals with its multinational customer base. In today’s airliner market, therefore, a plane built solely in America is one that sells only in America - and many of Boeing’s customers are located outside of America.
Here’s a hint: Japan is one of Boeing’s most stalwart customers. It was also one of the first countries to supply major subassemblies to BCA, years ago.
Additionally, NG/EADS are claiming significant total cost of ownership (TCO) savings on the KC-45A selection due to higher capacity of its plane over the 767 tanker. If those numbers are true, then the USAF made the right choice.
Oh, and I almost forgot: Alabama wins a fair bit of new manufacturing jobs, as do several of the so-called “flyover states”, because of its right to work laws, among other things. The same can be said for North & South Carolina, Tennessee, and Kentucky. How many overseas-owned manufacturing plants (large assembly plants, that is) have been opened in states where Union membership is mandatory?
(Answer: none. If the EU is the Unionists’ proverbial wet dream, why have both BMW and Mercedes Benz, whose home country is Germany, sited manufacturing plants in South Carolina and Alabama, respectively?)
Wanderlust on March 1, 2008 at 9:14 PM
Romeo13, I’m laughing at you, personally, as an individual, for your desperate attempt to make the chickenhawk argument about “being at the front” in a conversation about best practices procurement strategies for Air Force tankers. You’ve boarded ships. Congrats. I went so far as to say I respect your personal bravery, which you assure me you have.
It just has nothing to do with the topic at hand.
That’s your position. And the military disagrees.
Perhaps all defense related “items” should be only manufactured by those who’ve proven their personal bravery at the front? Surely these are the best people and contributions of brainpower, manpower, and financial resources from others are of little consequence. Competition, meh. Free market? Old hat.
Pure protectionism and made in America will produce the best possible quality of military hardware and innovation, as Boeing has proved by rolling out an inferior air tanker compared to Northrup and EADS.
And you still, on some level, realize this A330-series tanker will be mostly built in America and the Boeing 767 would have been substantially built in Japan, a former serious enemy of your Navy’s, not?
Christoph on March 1, 2008 at 9:32 PM
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