Air Force Tries Economic Unstimulus Package

There are two large airframe manufacturers in the world - U.S.-based Boeing and the European consortium Airbus. Both produce large commercial and military planes, though Boeing clearly has more military experience. Both were bidding on the contract for the Air Force's new fleet of aerial tankers, and with the U.S. economy in a slow down right now and the government preparing to send most Americans checks to stimulate the economy, you'd think it would make sense for the Air Force to choose the American-built aircraft and keep the vast majority of that money at home. Not so:

WASHINGTON — The Air Force, in a stunning upset against the Boeing Company, awarded a $40 billion contract for aerial refueling tankers on Friday to a partnership between Northrop Grumman and the European parent of Airbus, putting a critical military contract partly into the hands of a foreign company.

The contract, one of the largest at the Pentagon, is initially valued at $40 billion but has the potential to grow to $100 billion. It is also a sign of the growing influence of foreign suppliers within the Pentagon and breaks a relationship that has lasted decades with Boeing, which had built the bulk of the existing tanker fleet and had fought hard to land the new contract.

Under the contract, Northrop and the European Aeronautic Defense and Space Company would build a fleet of 179 planes, based on the existing Airbus 330, to provide in-air refueling to military aircraft, from fighter jets to cargo planes. It gives a huge lift to Airbus, whose commercial aviation program has suffered a number of setbacks in recent years. While final assembly of the craft would take place at an Airbus plant near Mobile, Ala., parts would come from suppliers across the globe.

At a news conference, Air Force officials said that the creation of domestic jobs was not a factor in the decision.

Why not? Many people in the know though the Boeing version was the superior aircraft, and when combined with the positive economic effects of keeping as many jobs and dollars in the U.S., it seemed a slam dunk that they'd go with Boeing. I guess logic is not always a consideration.

So, what happened? Some are speculating that this deal is a payback of sorts to the new French President for the support he will give (or has already given) to the U.S. War on Terror. After decades of petulant French governments I guess a wink and a smile from Sarkozy has made it all better.

Congress will be rightly ticked at this decision, and I expect Boeing, with the help of some members of Congress, will appeal the decision. In light of the economic factors in play today, it seems to be an incredibly tone-deaf call by the Air Force. The poor sap who had to make the anouncement had this to say:

In response to questions about possible negative reaction to the deal in Congress, Gen. Arthur J. Lichte, head of the Air Force’s Air Mobility Command, said, “This will be an American tanker, flown by American airmen with an American flag on its tail and, every day, it will be saving American lives.”

Sorry, this is going to be a European-built tanker, outfitted in the U.S., carrying a U.S. flag decal on it. It's sort of like putting a "Buy American" sticker on a Peugot.