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Front Page » August 9, 2007 » Opinion » Guest editorial: Aircraft contract hits turbulance over t...
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Guest editorial: Aircraft contract hits turbulance over trade

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Utah State Senator

As the early presidential debates for both parties get underway, there will be a lot of cheap talk about driving the United States economy forward as well as protecting our national security at home and our interests abroad. But the more successful of candidates will likely be those who can connect with voters on real life issues instead of relying on bland abstractions.

One such real life issue that will affect our national security and the health of the U.S. economy - in Utah as well as all over the country - is a high stakes competition between Boeing and French aerospace company Airbus, who are both vying to win a critical defense contract worth over $40 billion for building aircraft that refuel our Air Force planes in mid-flight. There's a lot riding on this contract, including thousands of good-paying American jobs to build the Air Force's next fleet of refueling tanker planes - critical support aircraft for U.S. troops spread across the world. But Airbus is playing the game with a sleight of hand, leveraging what most commentators view as illegal subsidies to help them win the contract. If the scheme works, we could lose thousands of jobs as a result, and put a critical defense item under foreign control.

The illegal subsidies - totaling some $100 billion - are the subject of the largest legal battle ever brought before the WTO, where the U.S. Trade Representative has accused the European Union of attempting to directly undermine the U.S. commercial airline industry. In a new twist on this sordid affair, Airbus has based their military tanker design on their commercial A330 jetliner - a plane that was the direct product of these billions of dollars in illegal subsidies.

Years ago, Groucho Marx once told a joke about two groups of sailors on a sinking ship. One group was trying courageously to plug the hole in the bottom of the boat; the other group foolishly drilled a new hole in the boat, thinking they would just let the water out. Something analogous is being considered here; while the USTR sues the EU and Airbus over billions in illegal subsidies, Airbus is simultaneously trying to persuade DOD to have U.S. taxpayers foot the bill for aircraft constructed using the same illegal subsidies. Are we really so blind that our right hand doesn't know what our left is doing?

Boeing's plan for their tanker would support 44,000 well-paying American jobs - 600 jobs in shops right here in Utah along with $22 million in investment - and high-level research and development for critical military assets would stay in the U.S. On the other hand, it's no surprise that Airbus' tanker will be built mostly in Europe, since the EU has given the company so much free, no-risk money. The French company has promised 25,000 U.S. jobs for their tanker plane but is keeping their lips tightly sealed on the details of their plans, leading many to bet that the actual U.S. jobs number will be much lower. After all, Airbus barely employs 500 people in the U.S. right now, compared to Boeing's 130,000. And Airbus' 'partnership' with Northrop-Grumman on the tanker project is more like a public relations ploy, with Airbus using the American manufacturer to send out more press releases instead of creating American jobs.

Of course, a competition to build such a critical military asset shouldn't be decided on the basis of protectionism. In fact, the Department of Defense has gone the extra mile, holding a new competition for the tanker contract after a no-bid award to Boeing generated sensible protests. The Air Force is depending on a vigorous, fair competition to produce the best plane - a tanker aircraft that will serve our troops well for the next 60 or more years.

That's why it's so unfortunate that Airbus is trying to cheat the system in order to win. And there is more at stake than just producing the best plane, the rules of fair trade and American jobs. If Airbus is willing to undermine the U.S. economy in favor of the EU order to win the contract, it's hardly a stretch of the imagination that they would act similarly should the EU disagree with our foreign policy in the future. Airbus could easily withhold tanker aircraft that would be strategically pivotal to a U.S. military action that the French government opposes.

The Department of Defense is pinning its hopes of producing a great tanker aircraft on a fair and open competition between rivals. But the Department of Defense can't approach this matter in a vacuum. In the same way that steroids pervert professional sports, the persistent subsidies for EADS/Airbus means that, with the help of a foreign government, the company can pervert fair competition by allowing cheaters to underbid contracts and snuff out a critical part of national security and our industrial base on which working families depend. Open competition and fair trade must peacefully coexist. The Department of Defense should make sure that they do.

Ed Mayne is the state senator representing District 5 and the President of the Utah State AFL-CIO.

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August 9, 2007
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