Tanker Fight

Business Week reports on the ever-more-complicated politics surrounding the Boeing/Airbus/Northrup tanker-contract bidding. Lobbyists from both sides worked the Democratic National Convention and Boeing could be seeing its future at stake:

Adds [Lexington Institute defense analyst Loren] Thompson: “Boeing is at least as worried about their key commercial customers in the U.S. market as they are about the tanker franchise. Once EADS sets up a commercial operation in the U.S. market, Boeing loses a lot of its national advantage in terms of competing for congressional support, protests from the [U.S. Trade Representative], and so on.”

The electoral politics of the thing are straightforward. Washington state [Boeing] votes Democratic, Alabama [Northrup/Airbus] votes Republican, and you can expect the incoming administration to award the contract accordingly.

The defense acquisitions argument is a different matter. Until DoD throws Airbus a contract, Boeing will retain a monopoly on large-aircraft sales to the military because the only other big domestic producer, Lockheed/Martin, got out of the transport business for good after taking a bath on the L-1011. An award to Airbus would also help build the domestic manufacturing base (if perhaps in an industry facing long-term decline) and punish Boeing for its ethics problems.


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