Spokane7
65°
February 27, 2011 in Business
Caldwell: Boeing’s tanker victory a blow to ’Bama
Thousands of Boeing Co. employees and suppliers, and only a touch fewer politicians, took a collective victory lap Thursday after the Pentagon made the 767 its choice for a new generation of U.S. Air Force tankers.
The decision was a surprise to many, including partisans of the competing bid from the European Aeronautic Defense and Space Co. – EADS.
The European consortium planned to make a modified Airbus A330 aircraft at a new Mobile, Ala., plant. That state’s governor, the city’s mayor and other officials had assembled to respond to the expected EADS victory.
The modified 767, dubbed the KC-46A by officials with a tin ear for branding, will be manufactured in the same Everett and Wichita, Kan., plants where the commercial version is made. Production, labor leaders boasted Thursday, has become 20 percent to 30 percent more efficient with the help of skilled union workers.
Those improvements helped overcome the edge EADS gained by “cheating” in the form of $5 billion in A330 “launch aid,” said Paul Shearon, secretary-treasurer of the International Federation of Professional and Technical Engineers.
“American taxpayers did not subsidize the 767 airframe,” he said.
For organized labor, which has become a punching bag for those who resent any lingering pockets of middle-class prosperity, the Boeing win was especially sweet. Unions do not get much of a friendly reception down South.
The help given Airbus by European governments, a claim supported by the World Trade Organization, has also galled Boeing supporters frustrated by the Chicago-based company’s loss of supremacy in commercial airplane sales. Sen. Patty Murray has been particularly vehement, and she did not let Thursday’s announcement pass without another denunciation of Airbus sugar-daddies.
Oddly, it was EADS that thought it would lose on price if Boeing was willing to bid whatever it took to get the tanker bid. Former partner Northrop Grumman had dropped out because executives feared a winning bid might be a profit-killer.
With $30 billion-plus on the table, there must be a few gallons of black ink in there somewhere.
EADS and Boeing officials will be briefed this week on the process that led to the Pentagon’s decision. After that, the Europeans will have 10 days to appeal. Boeing did so successfully after EADS won a flawed 2008 competition.
Meanwhile, Fairchild Air Force Base airmen continue to fly the Studebaker of aviation, a point not lost on Mobile County Commissioner Merceria Ludgood. She was among the Alabama officials who faced a crowd that had expected a victory announcement. Considering the stakes, and the expectations, they managed well.
Speaking Friday, the gracious commissioner said state and local officials read for weeks in military and aviation journals that EADS was going to be the victor.
“Unfortunately, we started to believe them,” she said.
Mobile was looking forward to the opportunities EADS would create, particularly in the aftermath of last year’s Gulf oil spill, which Ludgood said has severely damaged the area’s fishing industry.
She said local leaders have not yet had a chance to discuss what happens next with EADS, or Mobile’s efforts to become an aerospace hub.
But Ludgood knew one thing: The Air Force deserves better than the ancient KC-135.
“That has to be the No. 1 consideration; getting our men and women the equipment they need,” she said.
“I’m afraid that sometimes gets lost.”
A politician speaks the truth. Does anyone have an absentee Alabama ballot?
Caldwell: West Point trained local bankers to survive 
scaleram on February 27 at 11:42 a.m.
With vacous comments like “For organized labor, which has become a punching bag for those who resent any lingering pockets of middle-class prosperity, the Boeing win was especially sweet.”
It is no wonder that newspapers are struggling to make a profit these days. No one resents middle-class prosperity but I think most people resent paying more for something than it is worth. Union labor is just that.
Kivaari on February 27 at 1:59 p.m.
Mike, You nailed that. Every couple of years the Boeing engineers or machinist go on strike. Washingtons anti-business taxation helped drive the Boeing headquarters out of Renton. Given enough time the unions and Washington liberals will make dying in Washington too expensive.
monkeyman on February 28 at 2:14 a.m.
Hope the schedule of new tanker will have better luck than that of the dreamliner.
comatus on February 28 at 5:23 a.m.
What did Studebaker ever do to you? They were pretty successful in the aviation business, if you’d cared to look that up. Best part, they had a president who pushed an all-new European design; it flopped, it almost destroyed the company, and he killed himself.
I only mention that because that Studebaker failure, A.R. Erskine, is a pretty famous Alabaman. A Huntsville man, which you’d also have known if you looked anything up. Sounds just like your Alabama Airbus. Joke’s not funny now, is it?
You don’t actually do “journalism” over there, do you.
johnclarke on February 28 at 9:28 a.m.
“Washingtons anti-business taxation”
Kivarri, I would be interested to know more - what taxes?
I heard that Boeing execs got tired of having their homes picketed and such by the Unions and that was the primary reason they moved HQ. I don’t know that to be the REAL reason.
bertc on February 28 at 9:53 a.m.
Comatus;
Did you mean to say Studebaker “founder” A.R. Erskine?
Studebaker never did anything to me. Nor did American Motors or any of the other American automobile companies now extinct.
My reference was not a judgment of the company, nor the unfortunate Erskine.
wobble506 on February 28 at 9:59 a.m.
Johnclarke -
Not sure of all the taxes, but the B&O tax for my brother’s small business is nearly 3 times what is costs him to do the comparable volume of business in Idaho. 3 times!!
(he works in both C’DA and in Spokane).
He’s contemplating relocating to ID and not doing business in WA at all, just because of the taxes. I also know of at least 3 companies that have moved to Post Falls or C’DA because of taxes in the last 2 years. They still do business over here, but they are now based in ID for tax purposes only.
johnclarke on February 28 at 10:10 a.m.
Thanks for that wobble. Had no idea.