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If this isn’t an issue during the upcoming Presidential debates it should be. Boeing, A U.S. Company based in Chicago, lost its bid to continue a 50 year tradition of supplying refueling tankers to the Air Force to European Aeronautic Defence and Space Co. (EADS) that has partnered with California’s Northrup Gruman to give an American face to the deal on paper. The reality though is that Northrup’s name may have just been a strategic move to mask the eventual protests and political fallout.

The kicker, the designs being used by EADS for the jetliner is reportedly the product of illegal subsidies from the France and German governments that were designed to undermine the U.S. airline industry.

WASHINGTON — The Air Force on Friday awarded Northrop Grumman Corp. and a European partner a $35 billion contract to build airborne refueling planes, delivering a major blow to Boeing Co.

The selection of Los Angeles-based Northrop Grumman and European Aeronautic Defence and Space Co., the maker of Airbus planes, surprised industry and elected officials. Air Force officials said the larger size of the Northrop-EADS aircraft helped tip the balance in its favor.

Chicago-based Boeing, which has been supplying refueling tankers to the Air Force for nearly 50 years and had been widely expected to hang onto that monopoly, could protest the decision, though the company said no decision has been made.

The contract to build up to 179 aircraft _ the first of three awards worth up to $100 billion over 30 years _ opens up a huge new opportunity for Northrop Grumman.

“They don’t come along at this scale very often,” Northrop Grumman Chairman and CEO Ronald Sugar said. “We do see this as being a very important component of our business for many years to come.”

The deal also positions EADS to break into the U.S. military market.

An August 7th 2007 editorial on the pending appeared in the Seattle Times.

In a competition against Boeing to win a $40 billion Department of Defense contract to replace the Air Force’s aerial-refueling tankers, French aerospace company EADS happens to be using a stacked deck.

The company proposes to win the contract by taking advantage of some $100 billion in illegal subsidies that our own U.S. trade representative has denounced as undermining the U.S. economy. Thousands of local jobs in America, billions in taxpayer dollars and even our foreign policy hang in the balance; but, the strangest part is that the Department of Defense isn’t raising any objections.

Tanker-refueling aircraft are critical military assets that connect a U.S. military stretched across the globe, and the competition between Boeing and EADS should ensure that the Department of Defense gets the best plane for the taxpayer dollar — if the companies compete on equal footing.

However, EADS’ aircraft design is based on its A330 commercial airliner, which is the direct product of $100 billion in illegal subsidies from both the French and German governments. These illegal subsidies are the subject of a massive lawsuit filed with the World Trade Organization, in which the Office of the U.S. Trade Representative claims they represent predatory policies designed to harm the U.S. airline industry. In fact, since the European subsidies began, Boeing has lost significant market share and been forced to cut some 65,000 jobs.

This is how our politicians protect U.S. jobs, by doling out billions of dollars in U.S. taxpayer funds to overseas competitors that were put in place to undercut America.

Naturally the big headline in U.S. newspapers is that Alabama is the big winner, with some news outlets acting as if mobile Alabama won the $40 Billion contract itself.

MOBILE, Ala. (AP) — The selection of a Mobile site for a multibillion-dollar Air Force contract gave Alabama’s port city its second major industrial victory in less than a year.

The Air Force announced Friday it had picked Northrop Grumman and its Paris-based partner, European Aeronautic Defence and Space Co., to build 179 refueling tankers at a site at Mobile, creating an estimated 2,000 jobs and putting the city on the aeronautics industry’s world map.

The contract is worth $30 billion to $40 billion over 10 to 15 years and could be even more lucrative — it is the first of three deals to replace the Air Force’s entire fleet of nearly 600 tankers. - Alabama’s port city lands $40 billion contract for Northrup/EADS (AP)

But it looks like that is just the hype.

Oddly, the Pentagon has turned a blind eye to these illegal subsidies, even though they clearly give EADS an unfair advantage. After enduring stinging criticism from Congress when it awarded Boeing a no-bid contract to build tankers in 2004, many think the Defense Department is determined to keep bidding for the contract at least nominally competitive, which depends on keeping EADS in the competition. Ironically, the Department of Defense seems to be undercutting the spirit of the competition by allowing EADS to break the rules.

Unfortunately, American workers will be among those who suffer the consequences of this twisted bit of Washington, D.C., agency politics. A Boeing tanker contract would support 44,000 jobs — 9,000 in Washington state alone. In addition, Boeing’s bid will lead to the hiring of hundreds of subcontractors, spreading the work nationwide.

EADS, on the other hand, has singled out only 1,000 jobs at a finishing plant in Alabama if it wins the tanker contract — it promises to bring thousands more American jobs, but since no one has seen any plans, many doubt they will ever materialize.

Even our own foreign-policy autonomy is at stake. At a time when global terrorism threatens us at home and abroad, can we really afford to cede manufacturing control of a vital piece of military equipment to nations that frequently disagree with our foreign policy?

If the European Union, France or Germany were to vehemently disagree with U.S. policy, they would be in a position to hold back tanker aircraft as a way to express their displeasure, threatening economic and national security.

EADS has sought to assuage these concerns about jobs and foreign policy by partnering with American aerospace company Northrop Grumman. But, the alliance exists more on paper than in practice. EADS plans to manufacture the critical parts of its tanker plane in Europe while it seems that Northrop merely lends its good name for press releases and currying favor in Washington, D.C.

In an 11th-hour ploy, EADS has begun to play a new card, suggesting a kind of tie: “splitting” the first batch of tanker planes between the companies.

While this might seem sensible — allowing everyone to win and giving the Defense Department more time to decide before ordering the rest of the planes — a split buy would only further postpone a tough decision. Worse yet, it would force taxpayers to pay twice for research and development, reduce economies of scale and increase the cost of maintenance. The department can avoid these costly inefficiencies simply by making the decision now instead of later.

The pentagon is urging Boeing not to protest using the typical “these planes are for the troops” type of plea meant to dissuade something so unpatriotic as fighting for American jobs.

Still, the chance that political infighting could delay the program worries some high-ranking Air Force officials. Speaking the day before Friday’s announcement, Gen. T. Michael Moseley, the chief of the Air Force, implored the losing team not to protest.

“From a service chief’s perspective, I would ask them to think about the country and think about the people that fly the plane,” he said.

That my friends is a load of crap. I’m so sick of this kind of reasoning. It’s not like the troops would be any worse off flying a Boeing. In fact some people think the Boeing design is a better, more fuel efficient machine. The bigger Airbus will also require major changes to the infrastructure to accommodate the bigger wingspan.

A reworked A330 might cost a little less than the 7E7’s $120 million list price, but almost certainly couldn’t match the fuel savings and operating efficiencies that are the Boeing plane’s key selling points. Airbus could still opt to develop a new aircraft, but it wouldn’t be ready for the market until at least three years after the 7E7 makes its debut.

The implications are clear.

Northrop and EADS proposed retooling the Airbus A330, which could carry 25 percent more fuel than Boeing’s proposal and 20 percent more cargo, according to a report by Jefferies & Co.

Even so, Boeing was thought to hold the edge since its plane was close in size to the current tankers, modified Boeing 707 jetliners. Military planners would likely be forced to reinforce runways and rebuild hangar space to handle the Airbus aircraft, whose wingspan is 25 percent larger than Boeing’s offering.

While the Air Force said potentially outsourcing work to Europe did not figure in the calculation, jobs could figure heavily into efforts to overturn its decision.

“It’s not every day that we give potential $100 billion contracts to France,” noted Paul Nisbet, aerospace analyst with JSA Research Inc.

Yeah, it’s important to think of the troops when you are giving billions of U.S. taxpayer funds to European companies that are being propped up to undermine U.S. companies and economies. What better way to help the U.S. economy.

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