Dicks: ‘I hope EADS comes to its senses’

EADS should do the smart thing and not place a bid for the U.S. Air Force’s tanker contract, U.S. Rep. Norm Dicks said at a Seattle fundraising breakfast.

The oversized, French-built tanker would be too expensive to buy and too costly to operate, said Dicks. Given that, it would be a waste of EADS’ money and the Pentagon’s time for the Europeans to keep pursuing the contract.

“I hope EADS comes to its senses,” he told supporters at the breakfast. “Northrop got out for a reason.”

Among those supporters was a delegation from IAM District 751, led by President Tom Wroblewski.

Dicks is chairman of the House Appropriations Committee’s Defense Subcommittee and has been an outspoken advocate of the Boeing tanker bid.

His comments came amid reports that EADS is close to making a decision on whether or not to bid on the tanker contract. EADS has been shopping around for an American defense contractor to help it with on a tanker bid, after its long-time joint-venture partner Northrop Grumman backed out last month. According to reports, the new partner is likely to be L-3 Communications, which is based in New York City.

One thing that has gotten drowned out in all the shouting from Europe about the tanker is the fact that Boeing actually submitted a lower bid than EADS and Northrop in 2008, Dicks said.

The larger A330 also would be far more expensive to operate than the 767 tanker, Dicks said. “It’s just physics, it burns more fuel.”

And over the planes’ lifetime, that additional fuel cost would add up to about $35 billion — which is the expected cost to buy the planes in the first place, he said.

That combination of higher purchase price and higher operating costs makes the EADS bid an unattractive one, Dicks said. Given that, “there’s still a question in my mind whether EADS will bid,” he said.

One thing could change the equation, Dicks said: European government subsidies to EADS.

The World Trade Organization recently ruled that EADS had received $5.7 billion worth of illegal subsidies from European governments to help it develop the A330, the civilian airplane from which it is developing its KC-45 tanker for Great Britain, Australia and a handful of other small air forces. Those subsidies have given EADS an unfair advantage, he said, and his fear is that EADS will “use that advantage to bid lower than we should accept.”

Dicks also dimissed European complaints that the Pentagon had rigged the bidding to favor Boeing’s smaller tanker, based on the 767 aircraft built by District 751 Machinists in Everett.

American companies are blocked from bidding on European defense contracts, he charged, pointing to the Airbus A400M cargo jet as an example. American engine builder Pratt & Whitney submitted the best bid for engines on that aircraft, Dicks said, but European politicians threw out its bid and insisted that Airbus use a European-built engine instead.

“That’s how they do it,” the Congressman said. “They would not be fair to us in a million years.”

And none of this takes into account the notion that a Boeing-built tanker would create more American jobs, compared to the EADS plan to assemble its tankers at proposed plant in Alabama, from parts fabricated in Europe. It would take several years to get the Alabama plant running, so EADS proposes doing all the fabrication, assembly and modification work in Europe for the first batch of planes,  Dicks said. But “in the midst of this economic downturn, the idea of building the first 12 of thse airplanes in Toulouse, France, is unacceptable.”

Dicks vowed to “keep the pressure on” in the Capitol to ensure that the rules aren’t bent again to favor the EADS bid.

Boeing Commercial Airplanes CEO Jim Albaugh also spoke at the breakfast. He noted that he and District 751 leaders don’t always see eye-to-eye, but “one thing Tom (Wroblewski) and I agree on is there is no greater friend of the working men and women in the state of Washington than Norm Dicks.”

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  1. […] About « Dicks: ‘I hope EADS comes to its senses’ […]

  2. […] also has a lumbering, oversized airframe that will cost the Air Force billions more to buy and to fly, said Congressman Norm […]

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