Our government has allowed Boeing to monopolize the large/wide body aircraft industry with the Boeing / Douglas merger. Boeing sat on their arrogant fannies expecting the USAF to award the contract to a US owned company.
Military contracts are a bid contract similar to the B-747 / DC-10 tanker bid in the late 70s. Two American companies bidding to provide the best. Douglas provided a much better product, did research giving the Air Force a superior product. Boeing showed up with a B-747 and a 30 year old refueling boom (from a KC-135)hanging on the back, no research expecting to win the contract because "Boeing has been providing tanker support to the Air Force for 30 years".
The American competition is gone. Prior to Douglas merging with Boeing, there was talk of obtaining additonal KC-10 tankers, one of the first things Boeing did after the merger was to cut up the KC-10 (DC-10) jigs and tear the hanger down removing any chances of addition KC-10s. Once again, Boeing dominates the US market. Then there is the Darleen Druyun scandal involving Boeing's CFO Michael M. Sears and CEO Phil Condit.
Boeing claims to support the military, well let the tanker contract go, our men and women are flying 50 year old tankers. If the program is delayed, and the Air Force doesn't get its new tanker, we can expect to see the KC-135 flying until approx. 2050, 80 year old tanker.
At least one advantage of Boeing post-poning the new tanker is at family reunions, 4 generations can share the KC-135 flying experience.
I guess Boeing must think everyone is stupid enough to believe their bull about the fuel efficiency of the 767. The A330 tanker carries 26% more fuel than the 767, so of course it would burn more fuel to deliver a full payload. The Northrop Grumman Tanker is more fuel efficient per gallon of fuel delivered to the war fighter. That is the parameter which the Air Force used in the competition and Boeing knew that. One of the reasons that commercial airlines choose the A330 over the 767 is its fuel efficiency. Boeing doesn?t really even care about the Tanker Contract; its small potato?s compared to the commercial business. After driving Lockheed out of the commercial aircraft business and buying McDonald Douglas and systematically closing their commercial lines they have achieved monopoly status in the US. Another wide body assembly line in the lower cost south east has them sweating bullets. EADS has already announced they will produce commercial A330 freighters in the Tanker facility. Boeing may actually have to compete and the US industrial base will expand. Because of the Dollar/Euro exchange rate any work done on an aircraft in the US saves 40% in labor costs on the finished product, in-sourcing jobs to the US, so they?re incentive is to do as much work here as they possibly can. For once we are the lower cost market, when Northrop announced, and then quickly retracted, that the contract would actually be in-sourcing 1500 jobs from Europe they were talking about the A330 freighter work. EADS had a fit because the Germans, French and Britt?s might actually realize that they are not competitive with the facilities and workers Northrop and EADS are establishing in Alabama. Boeing gets the message; they may have an American made commercial airliner business to compete with again. That?s what this is about. The Tanker contract is big but it?s only 20 planes a year, Boeing sell?s 500 planes a year to the airlines. What Boeing won?t tell you is that they have outsourced more than 50% of their commercial aircraft business out of the US. The only reason the 767 has 85% domestic content is because the line is shutting down, due to lack of commercial orders. I'm sure jpen has never bought anything other than an American car.
Thank you jwkessler! You got it! Just because a foreign company opens a factory here and offers jobs to local folks, which isn't bad looking solely at the employment factor, it still is a foreign company reaping billions of dollars while paying only thousands. To go a little further, shouldn't Grumman, which abandoned Long Island and a long and distinguished history in mostly military aviation, using Airbus be treated as a foreign company itself?
Shouldn't Lockheed and the Marine One project also get the same treatment as they too are using Airbus?
It's not so much as shots taken at Airbus as it is the unveiling of the greed in the boardrooms and governments of both the United States and Europe.
Have we lost so much pride in products manufactured in the USA by Americans?
Our government should be ashamed. The armed forces should be ashamed.
If price is the reason we turn to cheap foreign made products, we have only ourselves to blame as we shrug our shoulders at out of control pricing, while CEOs "retire" with mega million dolar packages. If you speak up to our politicians and have them and the CEOs, VPs and other bigwigs in these corporations open their books for all to see, hold them accountable, don't let them push us around, then you can find out what is what and who is who. Most importantly where YOUR money is going. As much as politicians hate to admit, it IS OUR tax dollars funding this.
So shrug your shoulders at the $11.6 billion per helicopter, built by Airbus, which started out at $6 billion just three years ago. Shrug your shoulders at the price tag as it too, eventually will soar, just like you quietly shrug your shoulders at $4 a gallon gas.
America and Americans have lost the guts to stand up and say ENOUGH.
So, how is this ?flat earth?, globally integrated economy working out for us? Listening to the radio this morning, I?d have to say, ?not so well?.
When I was a student, I was taught that countries build wealth by manufacturing things. Take raw materials and turn them into finished goods and you have created wealth. Somehow we have forgotten this in the US. Today we think we can build wealth by just passing money from one group to another. We believe we can outsource manufacturing to cheap labor countries and reap the rewards of buying cheap goods. We forget that these goods only appear cheap while we still have the wealth to buy them. In another few years we will all learn the folly of this. Take a look at what has happened to the value of the US dollar and you will see where this is taking us.
BMN asked, ?Is the Chevy built in Mexico more American than the Toyota built in Alabama?? The other side of this question is ?Where does the profit go?? The Chevy profits go to the US to help keep GM alive and boost the US economy while the Toyota profits go to Japan.
Finally, what does it do to our security when we off shore so much manufacturing that we have to import stuff to build our weapon systems from countries that we may potentially have conflicts with in the future? Can we build a missile today without using chips made in China?
This is a turning point for United States and the short sightedness of the Air Force will have long-term ramification.
It is such a shame that the 40,000 jobs created from the KC-45A tanker that 25,000 of those jobs will now be going to Europe mainly France and Germany. The other remaining jobs will be small here in the United States and will not have much impact. The size of this order is for replacing almost 600 aircraft over 20 years (a long-term impact on any economy).
However, the real problems will begin later on once EADS starts producing the aircraft. EADS is in trouble with their A400M, which is way over budget and very late. The declining dollar against the euro is going to cost EADS more money to produce the aircraft and after they build the initial four or five aircraft in Alabama they will have to do some more cost cuts to make there production targets. One of them will be to build the planes back in Toulouse France because of there experience work force there. The A330 plane is 19 feet longer than the 767 and over the life of the fleet, it will cost the Air Force an estimated $14.5 billion in added fuel cost.
The initial requirements the Air Force asked for was for a smaller plane originally Boeing had offered the 777 as a tanker the Air Force said no it is too large and they wanted a 767 size aircraft. Nevertheless, in the last proposal rounds the Air Force decide to change the requirements. I do not think it makes any difference what Boeing would have offered the Air Force had made up their minds that they wanted to help support the European economy or teach Boeing a lesson.
Had Boeing not tried to cheat the taxpayers out of billions when they had the sole source opportunity the first time they would have the contract.
The irony is, while Boeing is continuing to export manufacturing jobs outside the US, Airbus is bringing manufacturing jobs to the US. Is the Chevy built in Mexico more American than the Toyota built in Alabama? Is the Boeing plane built in China more American than the Airbus plane built in Alabama?
Boeing tried to cheat the taxpayers when they had no competition, they brought this whole thing upon themselves.
Just read the Druyun plea bargain, Boeing has been cheating for a while.
1) I am sure as in every big deal all over the world somebody or someone in the decision making process is on the gravy train (such as Sam Nunn getting contracts for Martin Mareitta, or people in the Clinton administration steering contracts Boeing's way, KBR getting no-bid contracts in the current one).
2) Outsourcing one's defense business is a great first step to walk along for becoming a net consumer.
Not that Boeing is a saint, I have heard that a lot of parts of the tail sections of their passenger planes are made in China and now they are looking to move some production to India.
Lessons and things to note for all of us:
1)The US is as close to a free market globally as there can be
2) In Europe, China or anywhere in the world no US company can produce products especially defense related and sell them in the local market as easily
3) We as engineers forget: business is not about technical prowess...there are a lot of smart technical people all over so it comes down to who can make the DEAL.
4) Our buying into propaganda that we are part of the owner class of corporation is stuff that we are made to believe. If we were, we would not be getting laid off because wall street did not like what our results looked like last quarter.
Our focus is not on technology, it is on becoming a globally integrated economy. If one buys into it, then one has to live with the consequences: both good and bad.
mech eng, please provide a source for your statement that the criteria that were changed after the Air Force's original request for proposal actually helped Boeing. That is complete nonsense. In fact Airbus threatened to not bid on the contract unless criteria were changed because if they weren't their bid would not be competitive.
"Boeing has mounted a politically potent counteroffensive, even though it has since emerged that its proposal for modifying its 767 jetliner--as a way to keep its 767 assembly line humming--failed to meet nearly all major Air Force requirements."
This statement is completely false. Please provide a source that says the 767 failed to meet ANY Air Force requirement. In fact the 767 met all Air Force requirements. You will also not find any quote from a Boeing executive publicly bringing politics (jobs, subsidies, money being sent overseas, etc.) into the protest. These are issues being brought up by Congress, not Boeing.
The U.S. Air Force has admitted to changing how they weighted the tanker selection criteria as recently as the month before the contract was awarded.
How could anyone, especially the U.S. Air Force, expect there would not be a protest?
If the rules of the game are changed at the end, and the air force admitted to doing just that, then it was obviously not a fair competition.
This contract must be completely re-bid from the start, with unchangeable rules which are clearly and openly published for all to see.
Then may the best tanker win.
This will certainly delay the U.S. Air Force getting their new tankers when they had hoped, but it is obviously, and admittedly, their own fault.