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PHOTO BY JOHN LARSON

CONTRACT CONCERNS. U. S. Senators Patty Murray, left, and Maria Cantwell, right, listened to concerns about the Air Force tanker contract award from representatives of local aerospace companies March 25 at the University of Washington-Tacoma.

Senators get earful on tanker contract

By John Larson

The Air Force’s decision to award a contract for refueling tankers to an American-European consortium will not eliminate jobs right away, but it could have severe long-term impacts on the local aerospace sector, according to business leaders in the industry. Representatives of local companies shared their concerns with United States Senators Patty Murray and Maria Cantwell during a meeting on the University of Washington-Tacoma campus March 25.

The Air Force recently awarded a contract for 179 aerial tankers to a consortium of EADS and Northrop Grumman. EADS is the parent company of Airbus, Boeing’s chief rival.

The plane will be based on the Airbus A330 commercial jet. Final assembly will be done in Mobile, Ala.

Boeing offered a version of its 767 airliner, with assembly to take place in Everett. Boeing has filed a protest of the award with the General Accounting Office.

Murray said she and Cantwell want to learn about the implications of the Air Force’s decision. She said the Air Force wanted an agile plane that could refuel other planes quickly, and be small enough to land on current airfields. Murray feels the Boeing plane fits this description much better than the Airbus one, and said the Air Force altered its original requirements during the process of considering the bids. “It was pretty jaw dropping,” she said of the decision.

Cantwell noted the Air Force consumes half of the fuel purchased by the entire federal government. The Boeing jet has fuel efficiency 24 percent better than the Airbus plane, she said. “A contract of this nature requires us to ask tough questions,” she remarked. “We expect the Air Force to answer them.”

Cantwell mentioned airfields in Kyrgyzstan used by the United States military, and noted they are not long enough for use by the Airbus plane.

Pat Faley, a service representative with Service Steel Aerospace in Tacoma, told the senators that awarding the contract to Airbus will not cost the company current jobs, but could prevent them from hiring additional workers in the future. “It is potential that will not be met,” he remarked.

Doug Nesbitt, a vice president with the company, said it and other local aerospace businesses survived tough times in the commercial airplane sector, such as what occurred after the 9/11 terrorist attacks, through military contracts.

“At the end of the day, business follows business,” Nesbitt said. “If it goes to Europe, theirs will grow and ours will shrink.” Nesbitt called doing the final assembly in Alabama “the lipstick on a pig” of the situation.

John Theisen, president and CEO of Orion Industries of Federal Way, said he is all for free trade. But he thinks this goes beyond that. “My gosh, isn’t this an issue of patriotism?” he asked.

David Baublits, CEO of Tacoma-based Precision Machine Works, said he worries the Airbus contract could lead to other defense contracts going overseas. For now, it makes much more sense to do such manufacturing here than in China. “Ten years from now that might not be the case,” he commented.

Steve Hill of Hill Stamping and Manufacturing of Auburn told the senators that when an organization makes such a large order, it pays for it twice. After the initial purchase, it generally spends at least that amount over the course of the lifespan of the planes on maintenance and repairs – work done by businesses such as his. Also, government inspectors visit the plants of Boeing subcontractors. He pondered whether they will now have to make visits to factories in Europe.

Hill said the businesses represented in the room are located in the Puget Sound region because Boeing is here. Sending contracts elsewhere will lead contactors to leave eventually, he said.

Tom Luce, executive director of Executive Council for a Greater Tacoma, put the decision “in terms the normal American family can understand.” He gave an example of a family looking to purchase a new car. The Airbus jet would be a car with a larger gas tank than the Boeing model; however, the Boeing one would fit in the garage, while the Airbus model would require the family to build a new garage and driveway.

Luce said 60 companies in Pierce County would be directly or indirectly impacted by which company lands the contract.

The matter of fuel efficiency, he added, “raises legitimate cost issues.”

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