Tag Archives: EADS

The United States Air Force was handed good news on March 23^rd when the World Trade Organization made its final ruling on a complaint brought by the United States Government.  It found that $178B in launch aid given to France-based EADS/Airbus for its family of jetliners was improper and illegal.

Further, the WTO determined that $5B given specifically to provide EADS with an unfair advantage over America’s Boeing to build new U.S. aerial refueling tankers broke trade laws – and the spirit of legal and fair international competition.

That the subsidies were illegal or that EADS/Airbus cheats to win contracts comes as no surprise to trade watchers.  The ruling that they broke laws and put an American company at an unfair disadvantage should remove any obstacles for the Pentagon to move forward immediately with a contract for these much-needed flying gas stations.

Emphasis, “should.”

In a House Budget Committee meeting on March 24^th, Defense Secretary Robert Gates stated,  “My lawyers tell me that the WTO case gives us no basis on which to make a judgment.”

His lawyers?  What about his Airmen?  Their lives depend on an aging tanker fleet, remarkably reliable since Eisenhower was President, but now deserving of retirement and a gold watch to commemorate its extraordinary service.

For the Secretary of Defense to make such a statement is astounding.  If this case does not provide him with a basis for judgment, what would?

At a time when American manufacturing employment is low and the downline transfer of sensitive technology is high, the ruling is a welcome vindication for the U.S.

Nearly 15 million Americans are unemployed and 5.5 manufacturing jobs have been lost since 2000.  As line workers go, so do managers, engineers and computer technology experts.  Our domestic commercial airline business has not escaped unscathed from the current economic downturn and our military supply chain is suffering due to domestic sourcing challenges.

Countries like Venezuela and Iran – who have relationships with EADS/Airbus – should not be de facto recipients of emerging U.S. technology.  EADS/Airbus has been mired in bribery, corruption and espionage investigations for years.  That it has taken part in Iranian air shows should give anyone pause.

The tanker bidding wars have lasted too long. Most recently, EADS/Airbus submitted a version of its A330 to replace the trusty Boeing KC-135s.  Critics panned the French plane for being too large and cumbersome to operate efficiently in the air and on the ground in military operations.

But after political interference from EADS supporters in Congress, its bid was accepted — then overturned amid accusations of improprieties.   The WTO ruling has crystallized the illegal reality of EADS’ bid.

In March, EADS minority American partner, Northrop Grumman, did the smart thing and withdrew from the partnership.  In response, EADS issued the statement, “We acknowledge support from France, Germany, the United Kingdom and Spain in promoting transatlantic defense cooperation…”

Publicly thanking the countries whose illegal subsidies were likely the underpinning of the pullout of your minority American partner seemed an arrogant, yet oddly French approach.

EADS is now considering bidding for the tanker on its own. It requested an extension from the Pentagon, which Mr. Gates has not ruled out.

Why Mr. Gates does not believe a case brought to the world body – and won  - by one branch of the U.S. Government does not bind his branch of the U.S. Government is incomprehensible and shows little regard for the danger that further political dilly-dallying will pose to our warfighters.

There is no value in further delaying production to accommodate a foreign company that poses a security risk, has no remorse for cheating on trade agreements, and is peddling an illegally subsidized plane that does not add jobs to the U.S. economy.  American airmen, U.S. manufacturers and taxpayers deserve far better.

Soon, my USAF ROTC son will be somewhere in the world proudly wearing the blue uniform and protecting the security of our nation.  His survivability could depend on a refueling tanker.  Americans will always demand the best for him, and for every other mother’s child who volunteers for harm’s way.

Every day of delay puts patriots in the Air Force and Air National Guard at risk.   Mr. Gates may find this acceptable, but the rest of us should not.

Northrop Grumman has announced it will not compete for the contract to build the U.S. Air Force’s new refueling tanker, stating that the specifications of the RFP were unfair. Northrop’s partners in Europe are lashing out at the United States. One French official said this week, “I can assure you that there will be consequences” for the United States. The Euros were planning on using Northrop as the American face of their plane, but the fact remained that most of it would have been built in France and to many observers that seemed like a bad deal for out of work Americans. In fact, EADS/Airbus, who would have actually built the plane Northrop was proposing, was counting on the American taxpayer-funded refueling tanker to help its financial situation.

Meanwhile, an advocacy organization called Build Them Both is urging President Obama to step in “fix” it all. “Build Them Both urges President Obama to step in and – with the stroke of a pen – hire each company to build its proposed new tanker. This will put 100,000 Americans to work, provide the Air Force more tankers more quickly and offer massive taxpayer savings over building only one,” says the group’s spokesperson Carrie Giddins, who is also a Democratic political operative.

Build Them Both, which does not disclose its funders, further argues that the United States should yield to French threats and “European outrage.”

But the “build them both” solution would actually be the worst of all possible ideas. It would, in fact, be a terrible deal for taxpayers. The costs of building two tankers would be astronomical, costing taxpayers more upfront and long term. Designing and building two separate refueling tankers would require two separate sets of specifications. It would also require training two separate groups of pilots and maintenance crews and developing and maintaining distinct resupply networks. Its important to note that Northrop’s partner EADS/Airbus was proposing to build a completely different plane; which would require its own hangars, air base taxiways and landing strips. All of these considerations carry enormous costs.

And of course one cannot forget the principal reason Northrop decided its bid would ultimately be unsuccessful: The jobs it was proposing to create would for the most part have been European – mainly French – jobs. This was confirmed on Wednesday with the release of a new study.

Protectionism is a serious threat to our economic health. But this is not a case of protectionism. Northrop backed our of its deal with EADS/Airbus because they partnership was offering a bad deal, one that would have cost an extraordinary amount or money for little value to U.S. taxpayers.