In competing for the Air Force refueling tanker manufacturing contract, Boeing used just about every trick known to man, some of them illegal, to win the contest.
Boeing promised the people of Kansas that if they won the contract, the tankers would be built in Wichita. This so fired up the politicians of Kansas that operating at full RPM in wild-eyed zealotry they accused anyone who supported Boeing’s opponent in the contest of being “un-American.”
It didn’t matter that the other manufacturer in the contest would have assembled the tankers in Mobile, Alabama, a city that most cartographers would locate within the United States of America.
Now surprise, surprise! Boeing just announced that they are taking the tanker manufacturing out of Kansas along with over 2,000 jobs. Never mind the promises. “Adios Wichita.”
If this comes as any shock to the people of Wichita, perhaps a review of Boeing’s behavior in the tanker contest would be of benefit to our friends in Kansas.
It’s a sordid history including corruption, suicide and bungling. It dates back to 2001 when the Air Force announced its intention to lease 100 new tankers from Boeing for $20 billion.
In May 2003, the Pentagon chief arms buyer approved the lease four days before he retired. Sen. John McCain promptly criticized the arrangement and called it a “sweet deal” for Boeing that would cost taxpayers more than the alternatives.
In November 2003, Boeing fired Chief Financial Officer Mike Sears and Vice President Darleen Druyun. Boeing said Sears had improperly offered Druyun a job while she was an Air Force acquisitions officer in charge of the tanker project. One week later, Boeing CEO Phil Condit “resigned.” Sears and Druyun were criminally prosecuted for their role in the tanker deal, convicted and sentenced to prison.
Early in 2004, Secretary of Defense Donald Rumsfield canceled the Boeing tanker leasing deal.
In September 2005, American-based Northrop Grumman teamed up with EADS (European Air Defense Systems) to participate in the competition to replace the Eisenhower-era tankers.
In January 2007, the Air Force issued a “final” request for tanker bids. A few months later, Boeing and Northrop submitted bids. In October, The Air Force’s number two acquisition official, Charles Riechers, was found dead in his home of an apparent suicide. Riechers was working on the tanker program and was under scrutiny while awaiting Senate confirmation for another job.
In January 2008, Northrop confirmed that the tankers would be built in Mobile, Alabama should the Los Angeles-based company win the bidding. The next month, the Air Force awarded the $35 billion contract for 179 tankers to Northrop/EADS.
Boeing promptly filed a loser’s whining protest. The aerospace giant brought its considerable political clout to bear, attempting to convince the government that whining constitutes substance. Three months later on March 10, 2008, the General Accounting Office upheld the Boeing protest, citing “significant errors” in the process.
Later in 2008, Secretary of Defense Robert Gates canceled the Northrop award and said the Pentagon would rebid the contract. But he removed control over the process from the Air Force, saying his office would make the decision. The Pentagon then released a draft request for another round of bidding.
Within days, Boeing filed a bullying complaint saying that it might bail out of the bidding unless it got additional time from the Pentagon to consider its offer. The Defense Department yielded to Boeing and delayed the competition, effectively punting the decision to the Obama Administration which took office four months later. President Obama asked Robert Gates to stay on as Defense Secretary and Gates agreed. Gates returned control over the tanker process to the Air Force.
Long story short, Boeing won the contest with a low-ball bid and with the help of its superior lobbying efforts in Kansas and Washington. And it didn’t hurt that Boeing’s corporate headquarters was in President Obama’s hometown.
Within months of winning the contest with their lower bid, Boeing announced that there would be significant cost overruns as allowed under the contract.
Now on top of that, Boeing is moving the manufacturing from Wichita. They have said, in effect, “Screw you, Wichita.”
Note to wherever this outfit locates next: You are hereby forewarned that your new corporate citizen bears close scrutiny.
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