Boeing, EADS, Revisited


I just watched a video where channel 5 News did a horrible smear job on Congressman Tiahrt. The media can be so very biased and you cannot trust them to do an unbiased job of anything any more. Of course this was from Alabama too and I’m sure they want the contract to go through as is. But, didn’t it used to be the media’s job to report the news AS IT WAS and not as they wanted it to be? Well, those days seem to be over. I’ve noticed that EVERYTHING, and I do mean EVERYTHING in the media seems to play the emotional card these days. Commercials are a perfect example of this. I can’t remember the last commercial I saw that didn’t play on your emotional *need* of some kind. < shakes head>

The fact still remains that before EADS and their commissioned report the Air Force was set to buy one type of plane, the KC-135, with an un-subsidized company. I have to wonder just how large the kickbacks were to those higher up in order to get this slam dunked and not just a larger plane but one outside the USA with a company that the USA already has issues with. Didn’t they know this couldn’t remain a secret? Or were they so arrogant as to believe that public opinion didn’t matter? That We the People can say what we want and it won’t make one bit of difference in the end?

Considering the fact that runways and hangers will have to be remade to fit the larger planes, just how much of a savings is this anyway? I just don’t believe this was anything less than a payoff. And how stupid does the military think we are? Oh, that’s right, they don’t have to answer to us with bush in the White House. Silly me!

On March 18th Congressman Tiahrt asked the Secretary of the Air Force for documentation regarding the tanker contracts:

Tiahrt Calls on Secretary of the Air Force to Provide Official Documentation Regarding Tanker Contract Decision

WASHINGTON – U.S. Rep. Todd Tiahrt (R-Goddard) today sent the following letter to Secretary of the Air Force Michael W. Wynne requesting he provide specific documentation regarding the KC-X aerial refueling tanker contract decision to provide clarification for Members of Congress. The letter also highlights how substantial information was provided by the Air Force to the Lexington Institute on the day of the award announcement regarding the decision and rationale. However, Members of Congress are still receiving minimal information and are awaiting a full and detailed explanation.

The Honorable Michael W. Wynne
Secretary of the Air Force
1670 Air Force Pentagon
Washington, DC 20330-1670

Dear Mr. Secretary:

On February 29, 2008, the Air Force awarded a $35 billion KC-X Next Generation Air-refueling Tanker contract to the Northrop Grumman (NG)-European Aeronautic Defence and Space (EADS) Team. This controversial issue has brought wide-spread concern and many of us in Congress need more information on the selection process.

Although the House Defense Appropriations Subcommittee has received a formal briefing and conducted several hearings with Air Force leadership, there are many unanswered questions. The Air Force continues to provide piecemeal information on the decision, raising more questions than answers about the fairness and logic of this competition.

Though Members of Congress remain uninformed about much of this process, the Air Force extensively debriefed Dr. Loren B. Thompson, Ph.D. with the Lexington Institute on the day of the award announcement regarding the decision and rationale. Dr. Thompson was provided this information prior to either competitor or a single Member of Congress.

I respectfully request the following documentation regarding the KC-X competition:

* All documentation briefed or provided to Dr. Loren B. Thompson, Ph.D. regarding the KC-X decision
* A list of Government officials who discussed the KC-X Tanker decision with Dr. Loren B. Thompson, Ph.D. on Friday, February 29, 2008
* Northrop Grumman’s Official Bid Proposal
* The Boeing Company’s Official Bid Proposal
* The official Debrief Presentations of the KC-X Tanker Award Decision
* Any appropriate data to the KC-X Tanker Competition and Award

Congress has a responsibility to fully review this important decision. Until all the relevant information is provided, however, Congress can not be expected to support this controversial decision. I look forward to your prompt reply.

Rep. Todd Tiahrt
Member of Congress

March 19, 2008

I’m looking forward to that response I’ll tell you! And while I do not think any heads will roll, it is just appalling that the Air Force has ALREADY given away the President’s Helicopter contract and others to foreign business. Is it any wonder our economy is in the toilet?

In another letter Congressman Tiahrt sent to bush we have this:

Tiahrt and Dicks Call on President to Reconsider Air Force Tanker Contract
Letter highlights USTR role in pronouncing Airbus subsidies illegal

WASHINGTON – U.S. Rep. Todd Tiahrt (R-KS) today along with Rep. Norm Dicks (D-WA) sent the following letter to President George W. Bush requesting he reconsider the competition and re-compete the $35 billion U.S. Air Force contract decision awarded to (EADS) European Aeronautic Defence and Space/ Northrop Grumman over Boeing to build the next generation of aerial refueling tankers with a consistent U.S. policy on illegal subsidies.

The Honorable George W. Bush
President of the United States
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President:

In October 2004, the United States Trade Representative (USTR), Robert B. Zoellick, filed a World Trade Organization (WTO) dispute settlement case against the European Union regarding billions of dollars in unlawful subsidies provided to Airbus by European governments. This case is still currently pending before the WTO.

The USTR, acting on behalf of the government of the United States, has pronounced that Airbus receives illegal subsidies through the form of launch aid, European Investment Bank financing, infrastructure support, debt forgiveness, equity infusions and grants, and research and development funding.

When the case was filed with the WTO, Ambassador Zoellick stated, “This is about fair competition and a level playing field. Since its creation thirty-five years ago, some Europeans have justified subsidies to Airbus as necessary to support an ‘infant’ industry. If that rationalization were ever valid, its time has long passed. Airbus now sells more large civil aircraft than Boeing.” It is clear that the US government believes that Airbus receives illegal subsidies resulting in unfair competition. Furthermore, it is clear that these illegal subsidies are costing American jobs.

Although the Administration’s position on subsidies is clear from a USTR perspective, the Department of Defense has just awarded Airbus a $35 billion procurement contract for aerial refueling tankers. Northrop Grumman/EADS’s winning proposal for the KC-X Next Generation Air-fueling Tanker contract is completely dependent upon the heavily subsidized Airbus A-330 aircraft. Without these subsidies, EADS/Airbus would not have been able to develop the A-330 or a refueling tanker. Without these subsidies, Northrop Grumman’s proposal would not have been competitive. Even given the clear illegality and unfairness of the Airbus subsidies, however, the Department of Defense refused to consider the impact of subsidies in this competition. This decision allowed a heavily subsidized foreign competitor to win a major Department of Defense contract.

Mr. President, the award of the KC-X Tanker contract to a subsidized foreign competitor has rightfully outraged Americans across our nation. This competition was clearly unfair and heavily weighted in favor of a foreign manufacturer due in large part to the subsidies deemed illegal by your own USTR.

I would like an explanation as to how the USTR contends that Airbus gains an unfair competitive advantage through illegal subsidies, yet the Department of Defense awards this same company a major contract without taking these concerns into account. What is the position of the Administration on the legality of the European subsidies provided to Airbus? How is this position consistent with the decision to award the KC-X Tanker competition to an Airbus aircraft?

Mr. President, I ask that you reconsider this competition and re-compete the contract with a consistent U.S. policy on illegal subsidies. I look forward to your reply.


Todd Tiahrt (KS-04)
Norm Dicks (WA-06)

March 14, 2008

If I know bush he won’t respond to this letter. After all, it calls into question his authority and asks him to examine decisions made. bush fancies himself unable to make mistakes. (Ya, and if you believe that I have some beach front property in Phoenix for you!)

Last but by no means least we have Congressman Tiahrt’s letter grilling the Defense Department on their decision:

Tiahrt Grills AF About Tanker Contract Award During Defense Appropriations Subcommittee Hearing

WASHINGTON – U.S. Rep. Todd Tiahrt (R-Goddard) today questioned Air Force Secretary Michael Wynne and Air Force Chief of Staff General Michael Moseley during the annual Air Force Posture hearing in the Defense Appropriations Subcommittee.

“Today’s hearing with the Air Force Secretary and Chief of Staff only leaves me with more unanswered questions that emphasize the outrage at outsourcing our national security,” said Tiahrt. “This clearly was not a fair tanker competition. The deck was stacked against American suppliers and against American workers. This is illogical, and changes must be made. I will continue pressing the Air Force for more information in the days ahead.”

Rep. Tiahrt’s opening statement from today’s Defense Appropriations Subcommittee hearing:

Mr. Chairman, thank you for holding this hearing. I’m looking forward to the testimony from Secretary Wynne and General Moseley.

Although this is the annual Air Force Posture Hearing, I hope our witnesses will be willing to comment on the recent KC-X Tanker contract. This controversial decision to award a $35 billion contract to a foreign supplier has rightfully outraged the American public around the country.

The losing bidder has announced they intend to protest this decision – and rightfully so – but I still believe both of you need to answer questions on this vitally important issue. The more I learn about this decision – the more I realize that this competition will need to be redone. It will save the Air Force time and money to immediately reissue the RFP with your apparent goal of replacing the KC-10.

Secretary Wynne, General Moseley, one of the most difficult things from this whole experience is that I believe I was misled by the United States Air Force. Since 2001, the Air Force has said it must replace the KC-135E, our medium-sized tanker. For seven years and countless hearings – the Air Force has said the same thing… we need to replace the medium-sized tanker.

And now the Air Force buys an airplane bigger than the KC-10, but not as efficient as the KC-10. What has changed? And why wasn’t Congress informed that the Air Force actually wanted to replace the KC-10, not the KC-135. Why didn’t the RFP baseline reflect a KC-10 replacement instead of a KC-135?

It is hard for me to understand how something as integral as the size of the aircraft was misconstrued until the award decision.

This is just one of many reasons why you will save time and money by deciding now to re-compete this with your real goals and intent.

However, in the meantime, I believe Congress has an important role in understanding how the acquisition system failed the American people. It is becoming clear to me that the Government has stacked the deck in favor of European Manufacturers.

As I mentioned last week – three of the last big defense contracts have been awarded to foreign companies. The Navy awarded the Marine One contract to a foreign manufacturer. The Army awarded the Light Utility Helicopter to a foreign manufacturer. And now the Air Force has awarded the KC-X to a foreign manufacturer.

Foreign competitors were able to compete and win against American manufacturers because our acquisition laws actually favor foreign competitors. The deck is stacked for foreign manufacturers.

For instance, the Air Force didn’t account for the costly regulations that our domestic manufacturers have to comply with that you simply waive for our European allies. This includes the “Cost Accounting Standards,” the Specialty Metal laws, Buy America provisions, Foreign Corrupt Practices Act, and ITAR Compliance. These are the ones I know of – there are probably others.

The Air Force didn’t account for the $5 billion dollars in illegal subsidies that European Governments provided to Airbus for development of the A-330 aircraft. You simply ignoredCost Accounting Standards would require an American manufacturer to amortize such costs. Foreign manufacturers gain a huge cost advantage that is unaccounted for in your final contract award. these subsidies, yet the

The Air Force didn’t account for the billions of legal subsidies, such as socialized healthcare and workman compensation. The American manufacturer, because of Cost Accounting Standards, has to include these costs. That provides the French company a competitive advantage over an American manufacturer.

The Air Force didn’t account for the loss of tax revenue with fewer American jobs. Under the Airbus Tanker, America will see a minimum 19,000 fewer jobs. These are good, high-paying jobs. We should expect that these workers would pay a minimum of $10,000 a year in federal taxes. If you factor this out through the life of the program, this would total around $3.8 billion lost to the federal treasury. So what was really the foreign competitor’s true cost – $35 billion or $38.8 billion? We should account for this in our procurement system.

The Air Force didn’t account for industrial base concerns. The Navy, when making acquisition decisions on all ships, does take industrial base into consideration. But the Air Force didn’t even ask the question or maybe they just weren’t interested in the answer.

The Air Force didn’t account for national security concerns. As you know, tankers are a “single-point of failure” for our national defense. The United States military does not project power without Tankers. But no consideration was given to the risk found in a foreign supply chain, concern over access to spare parts, or even the basic question of whether this critical asset should be produced overseas.

Secretary Wynne, General Moseley, you may argue that you didn’t have a legal responsibility to address all of these issues, but didn’t you have a professional obligation? You had two competitors, but they weren’t on equal footing. This was not a fair competition. The deck was stacked against American suppliers and against American workers.

I hope both the Department of Defense and Congress will learn their lessons from this experience. We can not expect our domestic manufacturers to compete when the playing field isn’t level. I believe that Congress has an obligation to address these considerations and others, and I hope that our Committee takes the lead, but this does not absolve the Air Force of responsibility. The Air Force does have the authority to account for these considerations, but chose not to.

Gentlemen, the American people have demanded answers – and I hope you are ready to provide them. I look forward to hearing from both of you on this critical matter.

Thank you Mr. Chairman.

March 11, 2008

I know I want answers and I hope that you do also. It is time the Military figured out that American Citizens have a right, a responsibility, and a duty to oversee what they do. That we are not going to accept quietly this kind of stupidity when it comes to oursourcing our military contracts.

Keep sending letters and demanding answers. If we do not let this go they will HAVE to answer us. It is only by forgetting, which is easy to do, that they will get away with this crap.


~ by justmytruth on March 26, 2008.

3 Responses to “Boeing, EADS, Revisited”

  1. Chip, before I ok any more of your posts, you will need to give me links to support the data you are throwing around. So far I’ve seen none. If I cannot check out information, I won’t post what is said just for the sake of argument or arguing.

  2. Dear Ms. Eliott,

    I too am fighting this every step of the way. Good news is, the head of the Air Force was fired today! I’ll be doing an article on it soon. Thanks for posting! Come back and see us soon!

  3. Wow, several years ago I saw a special on the History channel about strange happenings in commercial aircraft. The majority of these aircrafts were made by “Airbus”. The company produced so many faulty aircrft with extreme problems that they were forced out of business. Problems including the tail not withstanding certain situation, electrical problems, faulty systems of checking their product, to name a few and there is many many more. After watching that Special I begain to notice when planes went down all over the world, and sure enough THEY WERE AIRBUSES. I begain to check when flying what kind of airplane I or a family member would be traveling on. Of course, I would not fly on a Airbus. One time while flying I begain to ask the flight attendants what they though about the Airbus. Two attendents just looked at eachother paused then begain to tell their stories. One lady said,” They are really scary for us, because we get thrown all over in them.” Also one had bruises form being thrown. Another said I will never let my children ride in one. I never had one attendent say anything good about them. American airlines was tricked into a contract and had to purchase some, but were getting rid of them because of all the complaints. Then to hear that Airbus uas going to produce the tanker/transporters for our Airforce, I was shocked. My son is in Iraq, he is a Marine in counter intel. I do not want may son to get in one of those troop transporters and then find out they can’t land because the plane is to heavey or to large in size for the runway and they can not land on 20% of our militarys runways.
    This is all the tragic stories I have heard for years coming into play again. My son gathers alot of valuabe info for our military, and the risk envolved in these EADS/Airbus is too great. The company was closed down once, and the product that the revived company in producing already has reported problems. My first thought when I heard the company was back was,”Where in the world did they get the money, because they had millions of dollars in law suits alone. Who are these people? and why are they back? The airbus product IS A PEICE OF JUNK! Something is wrong here. They are going to build, I heard three factories in the south. They say that there will be jobs plah, plah plah. But the truth is that the billions of dollars that will be earned will go overseas to WHO? Wow this is such a disaster. I will do all I can do to help in this fight.

    Mrs. Jeannie Elliott

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