Boeing Continues to Whine About Airbus

Airbus announced recently it will locate an aircraft assembly plant in Mobile, Alabama.  Boeing promptly issued a whining objection.

So, what else is new?

Boeing’s latest whine alleges Airbus has recieved too much in the way of incentives from the French government.  Nevermind that Boeing has received billions in favorable treatment from the U.S.

Perhaps a review of the former criminal enterprise currently known as Boeing and its relationship to Mobile, Alabama is in order.

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), parent company of Airbus, 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-Airbus 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, the Northrop/Airbus partnership 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/Airbus.

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/Airbus 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.

During the bidding process, 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.

Long story short, Boeing won the contest with a low-ball bid and with the help of its superior lobbying efforts in Washington.

And surprise, surprise!  Within months of winning the contest with their lower bid, Boeing announced that there would be significant cost overruns as allowed under the contract.

And another surprise!  Boeing has announced that they are taking the tanker manufacturing out of Kansas.  Never mind the promises.  “Adios Wichita.”

But Mobile, Alabama gets the last laugh.  Airbus has announced a HUGE facility to be built at the Brookley Aeroplex in Mobile which will employ over a 1,000 workers to assemble the Airbus 320, one of the hotest selling aircraft on the world market.

Message to Boeing: Get a grip, y’all.

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About William Bruce

President, American Business Brokers Association / Business Broker and Accredited Business Intermediary assisting business buyers and sellers with the transfer of ownership / Author: How to Buy a Business.
This entry was posted in Alabama's Economy, Gulf Coast Regional & National Economy, Mobile, Fairhope & Gulf Shores, Alabama and tagged , , , . Bookmark the permalink.

6 Responses to Boeing Continues to Whine About Airbus

  1. Carolyn Barnes says:

    Wow!

  2. Clark Tucker says:

    This commentary makes me sad. Where are we as a country when we refer to “whining” about an apparently corrupt process that was reversed and “bullying” when given short notice for a bid requiring thought and intelligence? The market decides through cost and production efficiency until the politicians, et al. get involved.

    I also believe that with the rest of the world supporting business through public funds that it is a good practice to loosen our anti-trust garbage to allow our companies to grow domestically and compete internationally. It seems to me that the only real competition currently taking place is from outside the US because of our socialistic (we’ll brake while you catch up) mentality. Let’s have open competition regardless of the players.

  3. Clark, thanks for visiting and commenting. We obviously have some differences in perspective.

    Best wishes,
    ~ Will

  4. Ralph Scott says:

    Global differences and the apparent necessity for a reality check, of course domestic industry both sides of the globe should be supported but where does an Airbus being built in America creating thousands of Jobs, bringing income tax returns on their salaries and corporate taxes, enriching expertise in the sector really offend, and please if the USAF are not the best people to judge which is the best Aircraft/Deal for the job who are, definitely not a group of corrupt politicians with well hidden links and personal financial interests (albeit well hidden) in obtaining the contract for Boeing?
    This is a personal opinion and by no way represents the opinions of Airbus in any way or form!

  5. steve solberg says:

    There is also the union issue which certainly played a major role in boeings win of the tanker contract!

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