Air Force, EADS Tanker Contract Fallout

As expected, the fallout from EADS winning the US Air Force's tanker contract over Boeing, that could send as much as $100 Billion to the European conglomerate, spawned emotional responses from a wide array of individuals.

If you ask German and French leaders, Merkel and Sarkozy, this seems to make up for the US barring the European nations from bidding on any Iraq reconstruction contracts. The European leaders were tickled at the outcome. "Gallois, the EADS chief, described the deal as an 'emotional'."

Gallois went to claim that it could bring as many as 25,000 jobs to the US. This seems extraordinarily high when the US will only be making the interiors at a new plant in Mobile, AL with a workforce of 1300. European plants on the other hand will be making the wings, fuselages, tail sections, and assembling them before flying them to the US before the interior work is completed.

Air Mobility Command's Commander General Lichte stated, "This will be an American tanker, flown by American airmen with an American flag on its tail and, every day, it will be saving American lives," when he heard congress might not be too keen on the idea of so many American jobs being sent overseas by the Air Force. General Lichte may have the big Air Force picture, but he misses the big American picture. The economy is falling into a recession and he wants to send $100 Billion overseas. Lichte probably won't get a fat consulting job with Boeing after retirement either.

There are three senators running for the presidency right now and to hear this from the Air Force will not make the Air Force very popular with any of them. Hillary Clinton is "very concerned" about the Air Force outsourcing thousands of American jobs to Europe.

She added that she found it "troubling" the government would decide to award the contract to a team including a European firm it is simultaneously suing at the World Trade Organization for receiving illegal subsidies.

We've yet to hear from Barack Obama or John McCain, who started the ball rolling in EADS favor by catching Boeing with its hand in the cookie jar back in 2003 when Boeing was given preferential treatment by senior Air Force acquisition leaders.

But now, Boeing is "very disappointed" the Air Force turned its back on the only American aircraft manufacturer in support of a foreign competitor that is subsidized by the European governments in the hopes of driving Boeing out of the aircraft manufacturing business. That would leave EADS as the sole major aircraft producer in the world until China would be able to compete. If the Air Force wanted to drive Boeing out  of the aircraft manufacturing business, this was a splendid first step.

For now, Boeing will consider appealing the decision to congress, something Air Force Chief of Staff Moseley said he wishs they wouldn't because it would only slow down the acquisition process. Maybe if Moseley worked for Boeing and was about to lose his job over this contract he'd think differently. Again, when General Moseley becomes Mr. Moseley, he need not apply to Boeing for a position.

Some in congress don't see Moseley's point of view.

Reaction from some in the U.S. Congress, however, was swift.

"We are outraged that this decision taps European Airbus and its foreign workers to provide a tanker to our American military," the delegation from Washington State said in a joint statement on Friday. Boeing planes are assembled outside Seattle. "This is a blow to the American aerospace industry, American workers and America's men and women in uniform."

But others did, the Alabama contingent, led by Senator Sessions, praised the deal of course.

The Air Force's snub of Boeing for EADS may have changed Boeing's relationship with the Air Force permanently. Boeing will survive, but most of it US military plane contracts (F-15, F/A-18, C-17, T-45) are about to close shop. Boeing has a strong civilian line going especially with the new 787 Dreamliner coming on board. The next time the US needs a military plane, Boeing may not have the engineers and trained work force that could design or manufacture a sophisticated military aircraft.

The smart move for Boeing is to focus on what it does best, commercial airliners. The USAF will then be stuck with EADS the next time it needs to build a military aircraft and then we'll see how good of a product the US gets for its dollar.