I Really Wish Emptywheel Hadn't Written This Post...

>> Friday, February 05, 2010

Emptywheel notes that one element of Shelby's decision to put a blanket hold on all nominees was to defend the Airbus bid for the new USAF tanker aircraft. This represents part of the long competition between Boeing and Airbus for the tanker contract. Unfortunately, Emptywheel decides that it's necessary to engage in xenophobia in order to attack Shelby.

There has been a lot of discussion of how foreign companies will be able to influence elections and politics given the Citizens United deal. But foreign companies are already dominating our politics.

As we'll see, Marcy is arguing that Airbus is "dominating" US politics by providing Richard Shelby with incentive to put holds on all of Obama's nominees. The instrument of Airbus' domination is a promise to assemble key components of its USAF tanker contract in Alabama, which would supply jobs, investment, facilities, etc.

The key issue is that Shelby wants the Air Force to tweak an RFP for refueling tankers so that Airbus (partnered with Northrup Grumman) would win the bid again over Boeing. The contract had been awarded in 2008, but the GAO found that the Air Force had erred in calculating the award. After the Air Force wrote a new RFP in preparation to rebid the contract, Airbus calculated that it would not win the new bid, and started complaining. Now, Airbus is threatening to withdraw from the competition unless the specs in the RFP are revised.

Essentially, then, Shelby’s threat is primarily about gaming this bidding process to make sure Airbus–and not Boeing–wins the contract (there’s a smaller program he’s complaining about, too, but this is the truly huge potential bounty for his state).

If Marcy had followed this discussion since the beginning, she'd appreciate that "gaming bidding process" has been fundamentally about giving Boeing a heavy advantage. Airbus, of course, won the original contract handily, to much consternation and hand-wringing in the substantial portion of the US military-industrial complex that depends on not having to compete with foreign suppliers. There are legitimate questions about the bidding process, and legitimate debate about what needs the Boeing and Airbus bids provide, but it's fairly clear that the revision of the terms of the bid have "gamed the process" to the extent that Airbus has no chance whatsoever to win. Marcy is entering this movie halfway through; Boeing has already exerted its influence on the US democratic process to substantially change USAF requirements in favor of its own bid.

I understand why any Senator would fight for jobs in his or her state. And I understand that there was dirty corruption in this original contracting process.

This is a key point; understanding American politics, Airbus determined that promising to assemble key parts of the tanker in the United States would weigh heavily in favor of its bid. Boeing already plays this game, and plays it very well; it has a wide range of Senators and Representatives in its pocket through diversification of its production all over the United States. In this sense, it was somewhat surprising that the USAF believed it possible to give the bid to Airbus. There was no question that Boeing would mobilize its political support to overturn any deal, even if Airbus had submitted a clearly superior proposal.

But underlying the refueling contract is the question of whether the US military ought to spend what may amount to $100 billion over the life of the contract with a foreign company, Airbus. Particularly a company that the WTO found preliminarily to be illegally benefiting from subsidies from European governments.

I don't recall reading Marcy's robust defense of WTO intervention in domestic subsidy discussions, but it's at least worth noting here that one reason Airbus receives subsidies is to allow it to compete with Boeing in the civilian jetliner market. Unlike Airbus, Boeing has significant DoD contracts that give it sufficient financial security to weather turbulence in the international civilian aircraft market. Airbus doesn't have the kind of cozy relationship with a major defense buyer, and has to rely on subsidies. The story is a touch more complicated than that, of course, but it's nevertheless fair to say that Boeing's ability to sell to DoD is one reason why Airbus needs subsidies.

Richard Shelby is preparing to shut down the Senate to try to force the government to award a key military function to a foreign company.

And this is really the key line. If we're to take this seriously, Marcy is arguing that Airbus should not have been allowed to bid for the tanker contract. Allowing Airbus to to bid meant that there was at least the possibility that they would win, resulting in the "award of a key military function to a foreign company." Now, I suppose it's a defensible position to suggest that only American companies should be allowed to bid for American defense contracts. In this case, since there are precisely three companies worldwide capable of building long range military tankers (including one Russian), this would have the practical effect of awarding the contract to Boeing. The implications of giving a contract to a European company are, to me, a good deal less scary than the suggestion that Boeing should be insulated from defense competition when providing to the DoD. I would further argue that if you're going to award key military functions to any foreign company, it might as well be Airbus; the US and Europe have maintained a tight defense relationship for sixty years, and the US defense industry supplies a very substantial proportion of European defense needs.

And so here are my key problems:
  1. Marcy is demagoguing the Shelby question, when she really doesn't need to. Shelby's behavior is despicable enough without making insinuations about the dread domination of foreign corporations.
  2. By highlighting the "foreign" aspect, Marcy is playing with the worst kind of xenophobic prejudice. Progressives really, really shouldn't truck in the kind of anti-foreign stereotyping that conservatives love to employ. It's also incidental to the argument; would Marcy have been cool with Shelby's hold if it had been in defense of a Lockheed Martin or Boeing contract?
  3. Marcy appears to be suggesting that foreign companies ought not be allowed to bid for major US military contracts. That's all fine and well, but it rather substitutes the domination of US defense corporations for foreign defense corporations. For my part, I'm pretty happy about the idea of letting Airbus into the competition, and of giving them a fighting chance to win.

...And I'm sorry that I have to include this, but when Marcy notes that the first bidding process (which Airbus won) was characterized by "dirty corruption," she links here, which is a letter from a Boeing whistleblower about fraud and corruption at Boeing, rather than at Airbus. In other words, she identifies Boeing as the corrupt party, then argues that Shelby is trying to "game the process" by making sure that Airbus has a fair shot to win a contract that Airbus has, in fact, already won.


Post a Comment

About This Blog

  © Blogger template Simple n' Sweet by Ourblogtemplates.com 2009

Back to TOP