Wow. Thompson broke it down nicely when he penned his article covering EADS' bid in the latest tanker contest.
After reading his story it makes one wonder how in the hell our Congress is letting the Europeans bid their airplane at all. Read more here.
However, the operational need for new tankers has been eclipsed by controversy surrounding how the tanker competition is being run. The World Trade Organization recently ruled that the Airbus unit of EADS has received illegal subsidies throughout its history that have enabled it to compete unfairly with U.S. producers of commercial transports. The biggest recipient of these illegal subsidies was the Airbus A330 transport -- the same plane EADS now proposes to use as its platform for a future Air Force tanker. Having seen both of its domestic rivals forced out of the commercial-transport business and its own global market share cut in half by competition from Airbus, Boeing and its backers are incensed that EADS is being allowed to bid. The Air Force says it needs EADS in the bidding to get the benefits of competition, and it is refusing to factor Airbus subsidies into its evaluation -- even though the past predatory behavior of Airbus is a key reason why it must go abroad to find a second competitor.I read aviation blogs everyday and never heard this before. Wow. Time to find new blogs....EADS is acting like the Chinese nation...they're attempting to prey on our industry.
Congress is not so detached from the economic consequences of letting EADS bid. In fact, it probably will refuse to fund a tanker built by EADS, given what the World Trade Organization has said about the European company's unfair trading practices. EADS has elected to bid anyway, but its only hope of prevailing is to tap the same subsidies that the trade organization condemned since its plane typically sells for $50 million more than the competing Boeing 767 and burns over a ton more fuel per flight hour.
Of course, the fact that the A330 is a much bigger aircraft than the 767, carries far more fuel, far more cargo/people and over a much greater range isn't taken into consideration though is it? Never let facts get in the way of a good rant, Dr Thompson...
ReplyDeleteThese facts ARE the official reason why Boeing complained. USAF when it saw the capability increase the A330 offered over the KC-767 proposed by Boeing, jumped at the chance.
Boeing then bitterly complained that USAF should not award "extra" points for vastly exceeding the requirements of the program and if USAF wanted a bigger aircraft they should have asked...
Of course no-one forced Boeing to bid an inferior aircraft, but hey, Domestic protectionism must be the paramount issue in choosing a new capability, right?
Cheers,
AD
protectionism? i think on this one we might part company.
ReplyDeletefrom what i've read of the WTO report on EADS aid from the member nations, they've gone above and beyond in their support of that company.
same applies with the A4oo program. by rights Boeing's C-17 is far superior but they insist on pushing that airplane. as far as the tanker is concerned the problem arises from the Air Force specifications...they're suppose to have a KC-X, -Y and -Z competitions. from those specs the A330 is closer to the Y designation than the X....
its cool though. we can agree to disagree.
Shouldn't the ultimate criteria be which plane is best for the Air Force? Within cost guidelines, of course. Anyhow, I understand that Boeing, while it isn't subsidized by the Federal government, gets all kinds of tax breaks and other sweet deals from state and local authorities in return for building their factories in those locations. This is very common in the American defense industry.
ReplyDeleteAnd what about all the restrictions under the Buy American Act?
ok, i guess protectionism reigns supreme. the air force set up the criteria and all of a sudden the euro clowns want a fair and open competition.
ReplyDeleteguess what, our air force, our airplanes. if europe doesn't like it then pound sand, but its time to protect US industry...just like every other nation on this planet does.
Even if the Air Force ends up with an inferior product? How about all those JSFs you expect the Europeans to buy? Should those go by the board as well? Their air forces, their planes, right?
ReplyDeleteIt's OK to be protectionist about your military industries. Lots of other countries are, as you pointed out. Just don't pretend you aren't if you are.
Johnathan...guess what.
ReplyDeletethe Europeans can buy whatever they want. my country can buy whatever we feel that we need and i personally don't feel that the A300 is superior...just larger and no one is talking about the infrastructure costs.
we will be fine if we buy only our own stuff made here. if the Europeans and Israel feel the same then go for it.
oh and one other thing cowboy, i never pretended that i wasn't protectionist....i just pointed out the logical fallacies associated with this glorious European airplane.
i don't think we need it, i don't think that we need to buy European and if some don't like it then tough.
Well, I don't think the military industries would agree with you. They do a lot of business outside of he USA.
ReplyDeletei don't give a fuck what industry has to say. have you looked at the economies of the world?
ReplyDeletemost defense buys are subsidized by the American Taxpayer.
want to save money on the budget? cut out those payments and giveaways.
bash the US? you get no more goodies.
oh and yes. i am turning rabidly US first in my thinking.
ReplyDeletei am beyond tired of this apologizing for defending others and having them question the manner in which we defend them.
Europe included. let them buy their own missile defense. Japan too. S. Korea too.
we can take care of ourselves alot better if we're not out to save the world.
But if the USA didn't have world-wide responsibilities, you wouldn't need such a big navy and Marine Corps. To be, you know, expeditionary.
ReplyDeleteanother swing and a miss.
ReplyDeleteif the Marine Corps shrinks so be it...its coming anyway. if the world says fuck us (and they are)...then me and alot of other Americans are saying fuck the world.
i'm tired of so called allies back stabbing us. using us and then running to us for help. so if the price to be paid is a smaller military then cool.
i'm just tired of the continuous bullshit. same thing applies to Israel and the F-35. either buy the plane or don't ... i really don't care.
you don't want it...fine...Typhoon is available...Rafale is available...Gripen is available...etc...
just stop pulling our fucking chains about it...i'm tired of the whining...even from an ally. oh and the Brits are trying the same bullshit even though BAE has a most generous production offset.
AMAZING.
If one looks at the armed forces of any nation with a defence industry what will you find?
ReplyDeleteA large percentage of equipment that is made in that country, is this because that countries requirements are uniquely met by its own manufacturers or is it because of an implied or overt subsidy?
As corporations become increasingly international this gets less clear but fundamentally everyone does it so when Boeing or EADS or BAe or Lock Mart complain about their competition getting unfair advantages it is nothing but a load of hot air.
Protectionism is a reality, not sure why everyone is getting exercised by it.
Sol, not sure what you mean by BAe getting most generous production offsets, is this for the A330?
no the conversation drifted (as usual ) toward the F-35.
ReplyDeletethe point here guys is that the US public (if i'm reading them right....i might not be since all my friends are conservative...so conservative that i sometimes seem liberal) is tired of being the gravy train for the world....from the outside people see the US as taking advantage of the world...from here we see the rest of the world screwing us because we aren't using our natural resources, financial and military might to get the best deals for us.
i guarantee one thing. this NOV will see a tidal change in our government...a change so big that what happened in Britain will seem small....in two years more you will see an America first movement take hold and for all those that talk about US Imperialism, you better hold on....i can see us divesting ourselves of alot of the worlds problems and just taking care of us.
as far as BAE...Airbus or any other foreign corporation....hey, if they don't want to play by our rules, then they don't have to get in the game. same with our corporations overseas.
if the US ever got back to its basics where we built what we needed inside our own country then you can bet that we would be self sufficient. our only weakness would be oil and we can regulate (or loosen regulations) enough to survive on what we can take out of the ground here.
Do you think BAe are getting a disproportionate share of the F35B then?
ReplyDeleteThe UK is the only Tier 1 partner, secured by nearly $4billion investment and a pretty significant design input in specific areas. The Harrier design heritage and obvious operational experience.
The JSF programe is also characterised by a value based workshare not based on the volume of orders.
I would say that BAe and other UK partners have a fair deal out of the JSF programe and the US have so far reneged on a deal for full ITAR transfer
On your wider view point, I agree that mainland Europe has been coat tailing the US for far too long, just look at the percent of GDP on defence spending, even at the height of the cold war. Not comparable to the US or even the UK which is still much less than the USA.
Do you think a retreat from 'world affairs' is a good thing for the USA, however inevitable
if you believe that then i recommend you contact your representative and join the likes of Goon over at APA and petition to have the UK pull out of the program.
ReplyDeletebut lets be honest. the UK leaks....as a matter of fact the UK's participation in the EU really does make selling sophisticated arms to that country problematic...especially since so many US products end up being duplicated and slightly altered as a result of those partnerships.
but that brings me full circle. no one is forcing the UK to stay in the program. you're a grown nation. if the deal sucks then pull out. but spare me the whining.
I don't think i was whining, having a more balanced viewpoint that recognises reality is not whining and what has APA got to do with what we are discussing, i.e. industrial issues?
ReplyDeleteI didn't say the deal sucked either, I said it was fair but in terms of a deal, the US has reneged on a key element, who knows where it will go.
The UK is the only Tier 1 partner yet we acknowledge the need for a wide participation, a European maintenance centre is likely to not be in the UK for instance.
The UK is committed to the programme and whilst everyone else is wriggling we have actually purchased a couple of test aircraft and continue to contribute to the ongoing flight test regime.
As for leaking information and the industrial consequences then I can see the US perspective but that particular street is not one way and has not been for decades, this is was the ITAR treaty was supposed to resolve but the protectionist beast on both sides of the Atlantic seems to be stopping progress
I think there is a middle ground on this, the F35 is not the cure for cancer nor is it the anti christ.
People seem to be polarised
It will no doubt be a fine aircraft but the key question potential purchasers have to ask is, it it worth it