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"Winning Bidder Has Stake In America"

March 23rd, 2008 10:39 AM

By TERRENCE GUAY
March 16, 2008

The Pentagon's decision to award a $35 billion contract to the parent company of Europe's Airbus has provoked a storm of controversy. The EADS-Northrop Grumman team was selected over Boeing to supply the Air Force with 179 aerial refueling tankers — the second-largest Pentagon contract ever.

For Boeing, which won a similar contract in 2003 and then saw it rescinded when it came to light that an Air Force procurement official landed a plum position with the aerospace company, the new award is a serious blow. The company's supporters in Congress and the states of Connecticut, Washington and Kansas are furious. Their complaints are economic (the Pentagon should be supporting American companies, not foreign ones) and political (Europeans should not be rewarded for their minimal support of U.S. actions in Afghanistan and Iraq).

But what has been lost in the discussions over the past two weeks is that it is no longer accurate to describe Boeing as an American company, nor EADS/Airbus as a European one. It is much more accurate to describe both companies as "transatlantic" or even "international."

Take Boeing. In the 1960s, only 2 percent of the content of Boeing's 727 was non-American. By the mid-1990s, this had increased to 30 percent in the 777 model. Going forward, at least 70 percent of the 787 Dreamliner will be built outside of the United States, mostly in Japan.

Likewise, Airbus is becoming increasingly "American." Airbus buys about $6 billion worth of U.S. goods a year, supporting 140,000 jobs in 40 states. About 100,000 U.S. workers make parts for the Airbus A380 superjumbo, and the company will build a new plant in Alabama to assemble the tankers, resulting in 2,500 new jobs and supporting 25,000 around the United States.

Other European aerospace and defense companies are adopting similar strategies. BAE Systems, a U.K.-based company, has made more than a dozen acquisitions in the United States since 2000. The company's 45,000 U.S. workers make up almost half of its global workforce, and BAE sells more to the U.S. government than any other non-U.S. company. In fact, BAE is trying to be so "American" that it is now a major contributor in U.S. federal elections, giving more than $1 million in the 2005-2006 election cycle.

Other companies also are making strategic links on both sides of the Atlantic. In 2005, Finmeccanica (along with Lockheed Martin and Textron's Bell Helicopter unit) won the prestigious contract to build a fleet of 23 Marine One presidential helicopters. The Italian company also has a contract to supply parts of the fuselage for the Boeing 787 Dreamliner, and works with Lockheed Martin and Northrop Grumman on the Joint Strike Fighter.

Finmeccanica also partners with Airbus on the A380, with BAE and EADS on the Eurofighter and missiles, and with France's Alcatel on satellite and space products. Like so many other U.S. and European defense and aerospace companies, Finmeccanica is forging international links that virtually eliminate its national identity.

Rising global demand for aircraft will further blur the identities of Boeing and Airbus in the coming years. Airbus estimates that China alone will need 2,929 large aircraft worth $349 billion between 2006 and 2025. Given these figures, China is destined to be a major market for both Boeing and Airbus, so the rivalry to win China is likely to be extremely intense. Airbus has already agreed to build an assembly plant in Tianjin for the A320, and it is almost certain that both companies will produce more in China in an effort to sell more there.

Given the multinational nature of all of these aerospace companies, the outrage over the air tanker deal is clearly misplaced. Members of Congress are being hypocritical when, on the one hand, they fume over general government waste of taxpayer dollars while, on the other hand, they are furious that the Pentagon made a decision that it believes offers the best value for money.

Fear that Europeans will gain from the Pentagon's largesse ignores the fact that U.S. companies have dominated the global arms trade since the end of the Cold War, and that European defense ministries buy far more from U.S. firms than European companies sell to the Pentagon.

More important, Americans should be concerned about the extent to which the United States offers a business environment that supports high-skilled jobs in the aerospace sector, regardless of the nationality of the company providing them. Ensuring a pool of well-trained engineers, technicians and production workers is far more important than who is paying them.

Unfortunately, that task, which requires better support for education, job training and scientific research, is far more complicated and less amenable to sound bites than the current blather over refueling tankers.

Terrence Guay is clinical associate professor of international business at Penn State's Smeal College of Business.

(OTHER ARTICLE SOURCE: This article may also be found within the Press-Register's Sunday, March 23, 2008 newspaper.)

COMMENT BY ALBERT MARSHALL CHENEY: I am sure by now, you realize my displeasure with politicians who outright lie to the public. Politicians who distort the truth should be held accountable for misleading Americans and, certainly should be receiving numerous letters from all of us. It is time for Americans to stand up and begin getting more vocal with our blogs as well as emails and or letters to the politicians who do not keep the American workers' best interest in mind.

I would enjoy receiving your thoughts on the above article as well as any other suggested topic(s) which should be explored more, in regards to, the local, regional and national economy.

Posted by Albert Marshall Cheney on March 23rd, 2008 10:39 AMPost a Comment (0)

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Northrop Grumman Sets the Record Straight Concerning the U.S. Air Force KC-45A Misinformation

March 27th, 2008 10:00 PM

Please click on the link below and it will take you to a great article by Northrop Grumman. It truly sets the record straight. Their article is very factual and proves my point about certain politicians who do not know how to be truthful. Instead, they would rather mislead and lie to Americans!

http://www.irconnect.com/noc/press/pages/news_releases.html?d=137846

Posted by Albert Marshall Cheney on March 27th, 2008 10:00 PMPost a Comment (0)

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"Mobile's Fight For Jobs Goes National"

March 12th, 2008 1:09 PM

(MOBILE, Ala.) March 11 -- Mobile's Mayor Sam Jones was in our nation’s capital Tuesday, doing his part to try and save the Northrop Grumman/EADS contract and the jobs which are coming to Mobile with it. Mayor Jones wants to counter some of the criticism which has been heard, not only at the nation's capitol, but also on national television.

Flip through the national news and business channels on your TV. The coverage concerning the planned Air Force refueling tanker, and the contract to build it, will take you to Washington, DC or to Seattle, Washington. You’ll notice not a lot, if any, shows anything about Mobile. Mayor Sam Jones thinks it's time the Port City takes some of the spotlight in this high stakes fight.

Bold statements have been broadcast across the country. For example, here’s one from CNN’s Lou Dobbs: "To turn away from Boeing, one of the leading corporations in the entire world, is insane."

Dobbs has spent a fair amount of time on his nightly show discussing the tanker deal. It’s his stance that the Air Force's decision to grant the $35-billion contract to Northrop Grumman and EADS outsources jobs and threatens national security.

"If this contract goes ahead, that every congressman and woman who supports it, every senator that supports it, and this president; There should be absolute recalls and impeachment," said Dobbs recently.

It's that kind of biting criticism which Mobile Mayor Sam Jones and a delegation from Mobile were trying to fight Tuesday on Capitol Hill. Jones joined Alabama Congressman Artur Davis at a news conference in Washington, DC.

Congressman Davis told the reporters from various national media: "A lot of people who have criticized this deal have said this will cost us jobs. That is not factually correct, ladies and gentleman."

Northrop Grumman projects the contract will mean 48,000 direct and indirect American jobs located in 49 states.

Mayor Jones told the reporters: "We've always said in Mobile, all we wanted was the competition to be granted on the merits of the competition, and we appear to have won on the merits."

To sell the deal's merits and those of Mobile, the mayor's staff is trying to book him on national television news and business programs, so that statements made by people like Lou Dobbs: "Because this is the death nail in American national security and it's that serious in my opinion," can be balanced by showing the other side of the debate.

U.S. Senator Jeff Sessions of Mobile has appeared on Lou Dobbs show. He pointed out that although the parts come from overseas, the plane will be built and modified into a tanker in Mobile, which Dobbs should know is in the U.S.

Mayor Jones says in addition to the Alabama delegation, he had meetings in Washington with lawmakers from the states of Georgia and Louisiana.

(SOURCE: Reported by: Mike Rush with NBC 15, the local television station.)

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COMMENT BY ALBERT MARSHALL CHENEY: The facts have been largely distorted by some politicians so, do not believe everything you hear! The Northrop Grumman-EADS economic project would bring a large percentage of employment to Americans! Please read and listen to ALL the articles and commentaries before passing judgment. By doing so, you will begin to see that the awarded bid was fair, and that, it will be a great benefit to many, many Americans!

Posted by Albert Marshall Cheney on March 12th, 2008 1:09 PMPost a Comment (0)

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