Air Force, EADS Tanker Contract Timing in Poor Judgment

The Air Force picked a poor time to award a foreign nation a $35 billion contract that is potentially worth $100 billion.

The US economy is slowing, outsourcing is a sore point with American labor, and on top of it all, it is an election year.

"We are hemorrhaging manufacturing jobs to foreign countries already, so I cannot imagine why ... our government would decide to take 44,000 American jobs, good jobs, and give them to the Europeans," said Sen. Patty Murray (D) of Washington, where an award to Boeing would have been a huge boon. "Instead of securing the American economy and our military while we are at war, we are creating a European economic stimulus plan."

The Pentagon responded that EADS was only a subcontractor, but that pitiful argument isn't going to fly. Northrop-Grumman's name was on top of the contract, but it was in "name" only. Most of the real labor, and profits are going overseas. EADS most likely paid a pittance fee to Northrop-Grumman to represent EADS and do nothing else.

While congress can't change the Air Force's decision, it is the keeper of the purse. This could create a staring contest between congress and the Air Force. The Air Force desperately needs to replace its half century old tankers but congress doesn't have to fund them.

One of the reasons the Air Force might have decided on EADS was the belief EADS could deliver aircraft tankers sooner. But congress may hold up the process with hearings, investigations and other stall tactics, that it may have been quicker for the Air Force to award Boeing the contract in the first place.

Granted EADS is planning on building the interiors of the aircraft in Mobile, AL. EADS is going to construct the majority of the aircraft overseas and then fly them to the US to have the interiors built.

Some have said that EADS/Airbus is considering moving the entire tanker construction process to the US because the dollar has fallen to an all time low against the euro making US labor relatively cheap compared to the socialist based European economies.

But the profits will still go overseas. Just like when American companies outsource labor. The labor costs go over seas, but the US based company still pockets the profits. So if EADS was to move the entire tanker assembly project to the US, Europe would still retain the profits.

All things being equal, the Air Force should have waited for Boeing to announce a major 787 Dreamliner sale to announce it was selling out the American worker. Awarding the contract to a foreign company while staring at a recession during an election year was truly in bad taste.