I got an email from a congressional source in Rep. Norm Dicks’ (D-Wash.) office over the weekend that foreshadows the upcoming fight on the Hill over giving those rotten Frenchies and their Euro pals billions of U.S. tax dollars for something red-blooded Americans can build better themselves (or that’s what the anti-NorGrum/EADS forces are probably thinking deep down).
Attached is the letter that Sen. McCain sent to Robert Gates as he was being confirmed … saying that the competition should not include a consideration of the WTO dispute. The result was that the Air Force a month later dropped the provision in the draft RFP that would have attempted to account for the subsidy that the USTR is alleging has gone into the A330 program. That was one of the key changes that ultimately cleared the way for the EADS-Northrop win.
Protectionism cloaked in legalistic trade jargon seems to be the first salvo fired by Boeing backers so far — unless you count former presidential hopeful Rep. Duncan Hunter (R-Calif.) who threw in a little Cold War redbaiting by basically describing EADS/Airbus as a “socialist” government-supported monopoly.
Reuters pulled the issue together well over the weekend, and I’ll bet you a million bucks whoever is facing McCain in the general election will blame him for losing American jobs by scuttling the Boeing lease deal and hinting in a letter to Sec. Gates that the Air Force might be attempting to negate the A330’s edge on cargo capacity (the letter was supplied by the Dicks source).
Stay tuned folks. You think the CSAR-X deal/protest was a hot one? This KC-X debate is going to get worse before it gets any better.
– Christian
{ 68 comments… read them below or add one }
I think the A330 is a better buy, no doubt about it. But there are other issues that we need to consider, especially when we are dealing with the economic turmoil we currently face.
To think that upwards of $100 billion is going to a company outside the United States while we also have a difference of 12,000 American jobs lost is a pretty tough pill to swallow. Add to that the fact the helicopter the POTUS will be flying in someday soon is not an American helicopter and we have some real soul searching to do.
And that is all politics aside, which a good point was made by Christian.
DC2
The is will rumble on and on , even when the KC-135 start failing and operational capability will be lost.
a question to christian (if he reads here of course)
could you get the *real* figures of how much of the KC-767 is actually american? i know the figures for the 777 and 787 – and the 787 is the shocking one with only 51% *made in america*
wouldn’t it be crippling to our military to buy less than adequate equipment?
It’s kind of funny… If Boeing had just built a better plane or had a better deal, this wouldn’t be an issue. Nor does this seem like a fluke, but a trend. More & more countries in the world are capable of competing with the U.S., but few in the States are willing to admit it.
Maybe the Boeing Machinists Union can go on strike again… that’ll show’em.
‘Picketer Brent Oliver of Des Moines wore a baseball cap bearing the name of Airbus, the European consortium that is Boeings main competitor. Jeff Hughes of Covington carried a sign used in the 48-day 1989 strike, wrapped in plastic to protect it. Brad Herrick of Kent brought three dogs decked out in T-shirts that identified them as the scab patrol.’
“Boeing machinists go on strike”
http://www.msnbc.msn.com/id/9141738/
Calm down, Roy Smith. Your frantic hysteria (“Rumsfeld, Pearl, Wolfowitz should be convicted and sentenced to death” etc.) does not persuade anyone.
The name of the game is offsets. The other name is globalization.
And why didn’t Boeing offer up the 777?
As long as engineering, R&D and final assembly are in the United States, there isn’t much to complain about. At least European executives aren’t as overpaid as Americans…
Boeing was over-confident and didn’t offer their best potential plane for the job. A modified 767 is still a 767. They should’ve offered their more modern, advanced 777 or even the 787 if they really wanted that contract! Then the jobs would’ve been domestic and would’ve been a solely US contract. All of that money would’ve been invested in our country alone. Instead, Boeing slacked it, and the contract was sold to a company that put out a comparatively superior product. Business is business. People spend money on the best products they can afford or budget for. In this case, the A330 outperformed Boeing’s option. Period.
Arguing about jobs is extraneous. You’re essentially saying you want the Air Force to buy inferior technology in the pursuit of creating domestic jobs. Inferior technology doesn’t last as long; doesn’t perform as well; and, doesn’t push the tax-payers dollars as far. So essentially, each tax dollar spent in purchasing an inferior product is buying less.
Think about it.
> I asked myself how much better that task force would be IF THEY HAD AN IOWA CLASS BATTLESHIP WITH THEM???!!!
no better of militarily, far worse off economically
they would never use the 16″ UNGUIDED shells in a civilian area because of the risk (guarantee) of civilian casualties
PGM are far more effective and useful in such a situation
> To think that upwards of $100 billion is going to a company outside the United States
1. the total contract value is only $40 billion
2. 60% of that stays with companies in the US
3. there is only about an $8 billion difference in foreign content between the two proposals, or about $0.4 billion per year over the 20 year life of the program
4. that doesn’t include the brand new aircraft factory in alabama that is going manufacture hundreds of widebodies that will more than offset the difference in bids
> And why didn’t Boeing offer up the 777?
it was too expensive
the KC-30 can be offered for about the same price as the KC-767, this is NOT true for the 777
perhaps the next competition (KC-Y) will be for a KC-10 replacement and it will be offered then
HERE COME THE POLITICIANS. that is going to tell the airforce what they need to fight wars. i wonder how much experience does the senator have in air refueling ops? but im sure he know how many jobs are in his district. you know in roman times they would cut off the hand of a senator that took bribes.
“you know in roman times they would cut off the hand of a senator that took bribes.”
Yeah, good times. Wasn’t there something about free trips to the zoo for Christians, and letting slaves, oh, just hang around for a few days along the Appian Way on this awesome bar seat, shaped oh-cross-wise.
> the KC-30 can be offered for about the same price as the KC-767,
So what do you think the cost of the KC-767 is?
Have any hard figures from this contract been released?
The 767 tankers for Japan and Italy are in the range of $130 million per plane and those are for 8 planes. A rough cut of the numbers from the NG/EADS winning contract indicates a unit cost of ~$178 million per plane.
in the past the usa has been as protective of its industries/jobs for military projects as anyone else in the world – whether this is a good or bad thing, who knows? unfortunately its the way of politicians to be short-sighted (all of ‘em) and focus on the things to get re-elected, rather than those which are necessarily the best for their country.
in this case, all i would like to add is that the winning bid is EADS-Northrop Grummun (a rather large US company, no?), and EADS isn’t just ‘French and German’ – we Brits have stakes in it, too. for instance the estimation is that this contract will safeguard 7000+ jobs making the wing parts in wales and in other uk factories, which along with many other components made all over the globe, will be shipped to the usa for final aircraft assembly.
isn’t this what globalisation is? virtually every large military project these days will use bits and pieces from all over the shop, surely with the idea of building the best end product for the best value of the tax-payer money? part of the issue is also the currently weak dollar – if the usa economy was stronger, the contract with eads-northrup would be even better value compared to boeing.
if the head of the usaf thinks the eads-northrop bid is the best, isn’t he better informed in this matter than politicians in states with boeing facilities?
NTV,
Be careful with those cost numbers. The US dollar has taken a beating over the past couple of years and isn’t worth as much any more. Plus, metal prices have been climbing over the same period. Boeing probably can’t offer the same price now as they did for the Japanese and Italian deals.
That said, I think Boeing lost this one partly because they wanted to squeeze a bit more cash from an old product line (the 767.) The Air Force has enough problems with aging airframes right now without buying new planes based on a 30-year old design. They’ve had enough trouble supporting the old 707-derived KC-135 after most airlines retired it 30 years ago – why would they volunteer for that headache again? 767s are starting to reach the end of their service lives with most airlines, so the parts base will start to dry up over the next decade. Same thing happened with the 707, compounded by the age of the technology. The airframe might be sound, but you’re still screwed if you can’t find that valve that went out of production 15 years ago…
> So what do you think the cost of the KC-767 is?
about the same as the KC-30
> Have any hard figures from this contract been released?
no, but they were for the previous contest
that time Airbus’ bid was $10 billion less than Boeing’s bid
Loren Thompson apparently got some inside info
http://lexingtoninstitute.org/1234.shtml
interesting info
G. Skinner,
I understand the dollars decline, I am just trying to get some hard numbers here.
irtusk,
> about the same as the KC-30
How can you be syre of this?
Are you saying the 767′s where going to cost $178 million each?
> no, but they were for the previous contest
Dont you think we should find out the numbers from THIS contest. they might be more appropriate.
Ironicaly the security code for this post was 76767*
> Dont you think we should find out the numbers from THIS contest. they might be more appropriate.
well according to that link, the KC-30 was rated superior in the cost metric
so there you go
irtusk,
Here’s what Mr Thompsen says.
> Cost/price. This was the factor in which many
> observers expected the Northrop-EADS team to
> shine, because EADS subsidiary Airbus usually
> underbids Boeing in commercial competitions.
> But Boeing compounded its difficulties in the
> eyes of reviewers by failing to adequately
> explain its assumptions in calculating the cost
> of developing a tanker. The resulting low
> confidence in Boeing cost projections undercut
> its claims of lower life-cycle costs. Northrop
> was rated higher.
SO yes, on cost/price NG was apparently rated better, but I am still looking for the actuall costs presented. Do you have thoose? Does Mr Thompson??
Like I said, I am looking for the cold hard numbers.
“US manufacturing activity shrinks” – Who’d a thunk it? :\
http://news.bbc.co.uk/2/hi/business/7275446.stm
If a European designed platform were not going to be allowed to win, why didn’t the Congress just say that in advance and save Northrop Grumman the great time, trouble, and expense of making their bid.
This is clearly a case of changing the rules or moving the goal posts after the game has been fairly played and fairly won.
I agree with the US airforce. European can do combat planes better for themselves too.
Coming at this from an international perspective (I
Did the air force consider that France, Germany or the UK would not support future USA policies (for example Iraq or the war on terror) and that they would withhold spare parts in the future?
We have used the current Boeing tankers for 40 years. Will the Airbus counties be our allies 40 years from now? Or will they oppose our policies in the middle east, toward the war on terror, or toward Israel?
Considering the possibilities, Boeing is a better choice.
Is it just me or has the Boeing 777 gotten very little attention. It’s almost as if there was teh 767 and then the 787. Both planes get way more press coverage (the 767 is much older and the 787 hasn’t even been made yet!).
Is the 777 some sort of boutique plane? Are they selling quantities necessary to scale down the cost (assuming that is the reason the 777 wasn’t offered).
“We have used the current Boeing tankers for 40 years. Will the Airbus counties be our allies 40 years from now? Or will they oppose our policies in the middle east, toward the war on terror, or toward Israel?”
The US air industry purchases several hundreds of millions of dollars worth of airbus aircraft every year. There is no way that there will ever be a policy split large enough to break full economic ties with Europe. They would rather we destroy the middle east, then lose the possibility of selling to american companies.
> but I am still looking for the actuall costs presented. Do you have thoose?
nope
> Does Mr Thompson??
i don’t know, you could ask him
> Like I said, I am looking for the cold hard numbers.
afaik they haven’t been released yet
> Did the air force consider that France, Germany or the UK would not support
> future USA policies (for example Iraq or the war on terror) and that they
> would withhold spare parts in the future?
if you read the other thread, i show comprehensively that
1. France and Germany can’t force EADS to do that
2. EADS doesn’t want to do that
3. Even if EADS did want to do that, they can’t
it’s simply not possible
> Is it just me or has the Boeing 777 gotten very little attention
the 777 has gotten a decent amount of attention, but
1. it wasn’t offered, so it’s a moot point
2. it’s far more expensive than either the 767 or A330
Bottomline is right or wrong, it is dead wrong politically and this will not be allowed to happen by Congress
I must say, I am very disappointed in Boeing. From what I have read, it looks like they tried to rip off the air force by offering 30 year old designs. I mean, they could have offered the 787 for contract and it would have been ideal. They would have won coming and going. Perhaps offer to build some used 767′s into tankers to tide the air force over until the new equipment could be made. Or, build a new version of the 737. As for the argument that somehow Europe could cut off aircraft to the US, the argument doesn’t fly. I flew a US airways A330 some years ago and I can’t imagine that if the AF was hard up for parts a domestic airline could say no.
I will admit that it upsets me greatly that this work will go to the french. There are a lot of skilled jobs that go well beyond dime-a-dozen bolt turners that the assembly plant will provide. Not to mention that the profits will drive the next generation of commercial airline competition. Shame on Boeing for mailing this one in.
freefallingbomb, go f#ck yourself.
You give the rest of the world a bad name.
The tanker award previously given Boeing was cited for being expensive. Lease to buy rather than buying right away. With the Euro at record highs and the 767 being cheaper than the A330, I think the Air force is contradicting itself. Before they want if cheaper but now they want it bigger.
Just when most private companies are outsourcing, the government does the same. What irony.
Mr. McCain this is going to hurt your candidacy.
Hey US Air Force, you magnificent bastards! You now have KC-X under Congressional fire, CSAR-X competition reopened, F-22′s facing production line closure, F-15′s falling out of the sky, B-2′s with some mystery ailment, the rest of the services upset with your attempt to take over UAVs, a C-17 that has short legs and can’t carry much over long distances and a C-5 re-engine program thats over budget. You (the Air Force) need an enema!
> and the 767 being cheaper than the A330
sigh
THE KC-767 IS NOT CHEAPER THAN THE KC-30
THE KC-767 IS NOT CHEAPER THAN THE KC-30
THE KC-767 IS NOT CHEAPER THAN THE KC-30
THE KC-767 IS NOT CHEAPER THAN THE KC-30
THE KC-767 IS NOT CHEAPER THAN THE KC-30
THE KC-767 IS NOT CHEAPER THAN THE KC-30
i’m really at a loss as to how else to get the message through to some people
any suggestions?
I agree with Solomon that the AF gets an ‘F’ in project management. Which is a shame, because they really do need new planes to replace the ones Reagan ordered. Of course, Boeing gets an F too for taking their eye off the ball.
By that time Europe will be rapidly entering the islamic world, so no I find it very unlikely that you will find support this side of the atlantic by then.
“We have used the current Boeing tankers for 40 years. Will the Airbus counties be our allies 40 years from now? Or will they oppose our policies in the middle east, toward the war on terror, or toward Israel?”
“Will the Airbus counties be our allies 40 years from now? Or will they oppose our policies in the middle east, toward the war on terror, or toward Israel?”"
We have a war on terror in 40 years?
Israel still exists in 40 years?
The USA will have an independent policy on the middle east in 40 years?
We will care about what happens in the Middle East in 40 years?
Europe will be “islamic” in 40 years?????
.
Sorry, too many bold assumptions (2 of them strictly unreasonable).
You’re not talking about 2010, you know? Today’s priorities and trends will be outdated in as few as 15 years.
.
About the tanker deal itself;
I believe it was necessary to sanction unacceptable defense supplier behaviour with a warning shot. The USN might give a SSK deal to Europe as well to warn its shitty suppliers.
I’m not entirely sure about the details, but it may be that the deal includes an offset package. This means that probably European countries agree to buy military equipment for a similar sum in the USA. That’s quite common in international arms trades among normal countries.
.
And well, if you want the best equipment for your forces then get accustomed to the idea that your indigenous suppliers might not be its inventor.
Trading the best equipment instead of an extreme form of self-reliance is actually an improvement.
Hey Sven,
I hope you’re not European with that mindset…lets talk Rafale which the French built to protect Dassault, lets talk Eurofighter for the UK when they were offered partnership on the F-22, lets talk Tiger attack heli when the EU members could all have taken Apaches…so get a life with that not protecting “homegrown” businesses. Europeans, one day they’re just a little annoying… the next… well you fill in the blanks…
mmm Soloman – don’t all politicians interfere with procurement in order to keep jobs for their voters, usa or europe? is it a bad thing? my opinion is that it generally leads to cost over-runs, poor service and in-service date slippage. opening up markets to competition can only improve the end product and costs, but at the potential of home nation job losses. however, the western militaries (nato if you like) are generally so inter-dependent on each other for technology and support these days, it seems unlikely in the near/medium term future that any can afford a technological or support schism, really.
“freefallingbomb, go f#ck yourself.
You give the rest of the world a bad name.”
~ Vercingetorix
Dude, you call yourself after a Frenchman! Please, FFbomb has a point, nobody is trying to dishonour your sister. We’re takling about a company that The companies themselves aims to make money, lots of it, and not care for something else.
Did you know patriotism is an expression of tribalism? You American types seem to feel everything “American” belongs to you; it doesn’t. For most of you, even your house isn’t yours. It is owned by a bank that is (probably) in part owned by an European or Chinese company.
The world has become a bigger place. You’re only a part of it, as are we.
peace
Pharsalus
Gentlemen,
I think Boeings loss was a good thing because several very important reasons.
1. The KC-30 gets the Air Force/Tax-payer substantially more for its money.
2. It sends a message to European governments that the US plays fair, as they are under much more pressure to become protectionist. They buy plenty of our military systems. E.G. F-16′s, Patriot systems, C-17′s, Aegis radar systems, Apache gunships, C-130′s, etc…. and many many sub-systems.
3. It sends a message to US contractors that they will have to compete effectively and fairly, if they want business. They can’t just rely on having high up decision makers in their pockets pulling strings to send the contracts their way. Look just how much they have screwed the US taxpayers with their cost over-runs on sooo many systems. E.G. The LCS, F-35, Global Hawk, Future Combat Systems, Expeditionary Fighting Vehicle, and many many more… seriously I’ll name them, but you get my point. The contractors have screwing the tax-payer down to a sophisticated science. Imagine how much better the USA’s armed forces would be, if the contractors didn’t lie and cheat so bad. (Remember Eisenhower’s’ warning on the military industrial complex)
I’m saying this because I love my country and I want it to have the greatest military in the world, but it’s being subverted by greed that cuts corners unethically.
Boeing needs to spread some more cash to their
friends in Washington, thats the only problem, send me the cash.
At a time when Americans need jobs, they give the contract to someone who will benefit overseas. I am an aviation worker, lets keep these jobs here at home. If we get into a war in the future with an ally of the company that builds the tankers, what will happen. I will vote for a man who takes care of Americans not Europeans. With a recession looming, create jobs, lets take care of our own, every dollar made on our soil is a bonus. God Bless America, not europe, we have to watch out for the U.S. the eurpeans won’t.
“Hey Sven,
I hope you’re not European with that mindset…lets talk Rafale which the French built to protect Dassault, lets talk Eurofighter for the UK when they were offered partnership on the F-22, lets talk Tiger attack heli when the EU members could all have taken Apaches…so get a life with that not protecting “homegrown” businesses. Europeans, one day they’re just a little annoying… the next… well you fill in the blanks…”
.
I don’t see the problem. European nations have of course their defense industry, their requirements and own products. They are of course running own projects.
.
But there’s a long list of projects that were cancelled and U.S. equipment used instead a well.
The existence of some European aircraft projects doesn’t mean much. Typhoon uses mostly U.S. munitions, for example. German Phantoms were modernized with APG-65 & AIM-120, Germany uses Patriot SAMs, HARM, Paveways, ESSM. – UK bought some C-17, Spanish bought F/A-18…
.
It’s pretty obvious that the trade balance of the USA is positive in regards to military equipment – in stark contrast to its overall trade balance.
.
And finally I’d like to emphasize that I ddin’t really talk about protectionism. I talked about warning shots for unacceptable U.S. defense supplier behaviour & (lack of) performance.
OK, I’ll admit I’m biased. I work for the PRIME -Northrop Grumman. It is being written as EADS wins the KC-45A with OBTW Northrop Grumman like we are some hack front company. The A330 is an airframe. The big money is in the air-system, avionics, engines, auxillary payloads. I have seen content numbers used pretty regularly of 60% US made. Don’t confuse that with dollar amounts. The domestic cut of the pie is over 80%.
Since quite a few people seem to be in a ‘what was Boeing thinking?’ mode concerning their offer of the 767 instead of another aircraft, I’ll give my two cents of opinion: They thought it was the best plane to offer for Boeing, and that clouded their view as to which plane would be best for the US. The 767 is the only product line within several ‘ring sizes’ of what the AF needed and where Boeing had excess capacity. It didn’t occur to them to size the airplane to the requirements and open up another line if it was neccessary, or if it did, THEY determined they didn’t want to do it because THEY determined it wasn’t worth it to them for the potential benefit (and they could be right). The contract was theirs to lose, and they did. It may have been that for them to offer the best product would have meant taking too much risk or incurring too much overhad cost, making ‘winning’ a less lucrative option for them than Northrop Grumman.
From what’s come out so far in the news, it looks like Boeing made the AF choice an easy one, so let’s call this the mid-term and give the AF an easy ‘A’ in program managment. But the final counts twice as much and that grade will be based upon how they handle things from here on out.
Mind your step everyone – don’t step in any trolls or troofers!
I think this Tanker deal is a raw deal for all american’s. We have no business farming out any significant defense related workload to other nations. This country is facing some tough times despite what President Bush says and our american people and businesses deserve to keep this workload and high paying jobs here at home. It’s not like we don’t have the technology or capability and have to seek outside assistance. Buy American, particularly for stuff related to national defense.
irtusk,
Call me confused, but on one hand you say this
> THE KC-767 IS NOT CHEAPER THAN THE KC-30
> THE KC-767 IS NOT CHEAPER THAN THE KC-30
> THE KC-767 IS NOT CHEAPER THAN THE KC-30
> i’m really at a loss as to how else to get the > message through to some people
> any suggestions?
But earlier you say this.
>> but I am still looking for the actuall costs presented. Do you have thoose?
>>>>>>>>>>nope> Does Mr Thompson??
>i don’t know, you could ask him
>> Like I said, I am looking for the cold hard numbers.
>afaik they haven’t been released yet
If you dont know the actuall cost of the planes then how can you say the 767 is not cheaper?
I would like to see the numbers that the AF used to judge the 5 areas evaluated.
Mission capability
Proposal risk
Cost/price,
Past performance and
Integrated assessment
Its only after we see these numbers that we can have any intellegent discussion.
“Please, FFbomb has a point”
Oh, Really? Was it this point, you truther psychopaths?
“ALL THE 11 / 9 PLANES WERE ELECTRONICALLY HIJACKED BY … ISRAEL !!!”
> At a time when Americans need jobs, they give the contract to someone who will benefit overseas.
this contract will end up creating MORE jobs than the Boeing proposal
> I am an aviation worker, lets keep these jobs here at home.
i think you mean ‘keep these UNION jobs and don’t let them go to Alamaba’
> If we get into a war in the future with an ally of the company that builds the tankers, what will happen.
nothing (in regards to the tanker)
1. EADS is a private company, they are not controlled by France or Germany
2. EADS has no desire to boycott the US. Doing so would mean they would forever be locked out of lucrative US defense contracts. Money talks.
3. practically all the critical systems (engines, avionics, boom, etc) ARE MADE IN THE US.
4. the USAF requires blueprints/plans of all parts so they can make their own if required
EADS can’t be forced to embargo anything, doesn’t want to embargo anything and couldn’t embargo anything even if they tried
> I will vote for a man who takes care of Americans not Europeans.
i would support someone who puts the needs of the warfighter first instead of foisting 2nd rate equipment on them to support some domestic agenda
> We have no business farming out any significant defense related workload to other nations
you realize the Boeing bid has significant foreign content too don’t you?
> Call me confused, but on one hand you say this
>> THE KC-767 IS NOT CHEAPER THAN THE KC-30
>But earlier you say this.
>>>nope
>If you dont know the actuall cost of the planes then how can you say the 767 is not cheaper?
because the USAF evaluated the KC-30 as SUPERIOR IN THE COST METRIC
> irtusk,
> because the USAF evaluated the KC-30 as SUPERIOR IN THE COST METRIC
Yes I understand that, But being superior in the cost metric does not necisarily menat that the KC-30 is cheaper per unit than the KC-767.
Again, given that NG/EADS will get $1.5 billion to produce four test aircraft and $10.6 billion to deliver 64 new tankers during the production phase that turns out to be $12.1 billion for 68 aircraft or ~$178 million per aircraft. do you think that the Boeing aircraft was going to be ~$178 million apeice?
No, it won’t create more jobs than Boeing. Stop using EADS/Northrup figures. According to INDEPENDANT observers, this contract will result in a net loss of 25,000 jobs. You have to not only consider how many jobs EADS creates in the U.S because of this contract, but you also have to consider how many Boeing workers will lose their jobs because of this. Far more people will lose jobs at Boeing than are created by EADS, at least in America anyway.
“Oh, Really? Was it this point, you truther psychopaths?
“ALL THE 11 / 9 PLANES WERE ELECTRONICALLY HIJACKED BY … ISRAEL !!!”
Posted by: Vercingetorix at March 4, 2008 09:37 AM
>> Oh please. I do think 911 was pretty fishy but please do accept people can have another opinion than yours.
respect
Pharsalus
Anyone with half a brain should heva a problem with Sen. McCain’s comment listed below. With him running for the highest office in our land, he should be extremely concerned with both jobs in the U.S. and the best weapon production! It does not appear that he put much thought into this statement considering it is going to be the American taxpayer that is funding this contract! Job creation may not be the “key issue,” but again since it is going to be American taxpayers “footing” this bill when it comes due, job creation should be a “major/key consideration!”
McCain said jobs were not the key issue.
“I’ve never believed that defense programs, that the major reason for them should be to create jobs,” he told reporters in Phoenix. “I’ve always felt that the best thing to do is to create the best weapons system we can at minimum cost to taxpayers.”
I have read each comment on this subject. The Aussie’s seem to have their head tied on right. While most arguments have valid points, bottom line is we are in a competitive world, and I agree with LY, At least European executives aren’t as overpaid as Americans. Below is the excerpt from the Aussie.
Coming at this from an international perspective (I
> Yes I understand that, But being superior in the cost metric does not necisarily menat that the KC-30 is cheaper per unit than the KC-767.
well then WTF does it mean?
try not to overthink this, ‘superior price = lower cost’, OK?
> do you think that the Boeing aircraft was going to be ~$178 million apeice?
apparently
> According to INDEPENDANT observers, this contract will result in a net loss of 25,000 jobs
lol, NO
you only get that amount when you use Boeing’s GROSSLY exaggerated 44,000 jobs number
which is simply a lie, there’s no other way to say it
> but you also have to consider how many Boeing workers will lose their jobs because of this
NO BOEING WORKERS WILL LOSE THEIR JOBS
Boeing has already said that there will be no layoffs
> It does not appear that he put much thought into this statement considering it is going to be the American taxpayer that is funding this contract!
you are wrong, his statement is exactly correct
the military should look into getting the best VALUE for the taxpayer’s money. Which means best capability at the lowest cost. Anything less is a WASTE of taxpayer money.
> well then WTF does it mean?
> try not to overthink this, ‘superior price = lower cost’, OK?
Well this comes from your man, Mr Thompson under the cost/price section.
“The resulting low confidence in Boeing cost projections undercut its claims of lower life-cycle costs.”
> > do you think that the Boeing aircraft was going to be ~$178 million apeice?
apparently
So you think that Beoing jacked up the price by 50 -60 million apeice?
> “The resulting low confidence in Boeing cost projections undercut its claims of lower life-cycle costs.”
life-cycle costs do not equal purchase price, in fact they’re not really related at all
and you were asking about purchase price
> So you think that Beoing jacked up the price by 50 -60 million apeice?
i think it costs a decent amount of money to convert a civilian airliner to a tanker
> life-cycle costs do not equal purchase price,
> in fact they’re not really related at all
> and you were asking about purchase price
Yes, I understand that. The point is that there is more to judgeing the Cost/Price part of the contract than just the unit cost.
So the unit cost could be lower for Boeing, but they could still lose the entire section based on other costs, and AF judgements of their proposal.
> i think it costs a decent amount of money to convert a civilian airliner to a tanker
Yeah, I get that, but think about NG/EADS bid, and how much a civilian A330-200 costs. Are they selling for $110 – $120 million a shot? No, the A330-200F goes for around $175 million per plane
> Yes, I understand that. The point is that there is more to judgeing the Cost/Price part of the contract than just the unit cost.
ok, you’re right, cost = purchase price+lifecycle costs
Boeing supposedly submitted lower lifecycle costs, the AF doesn’t believe them, let’s call them even in lifecycle (i really doubt 767 would be substantially more)
so if lifecycle is even (or Boeing is slightly ahead), the KC-30 must have a lower acquision price to be rated superior in cost
> No, the A330-200F goes for around $175 million per plane
list price does not equal actual price
> ok, you’re right, cost = purchase price+lifecycle costs
OKay, now we re getting somewhere. but not all the way there. There could be more to the cost/price evaluation than unit cost and lifecycle cost. Further, what is/where the AF’s judgements.
> so if lifecycle is even (or Boeing is slightly
> ahead), the KC-30 must have a lower acquision
> price to be rated superior in cost
But again take a look with what Thopmson says.
“But Boeing compounded its difficulties in the eyes of reviewers by But Boeing compounded its difficulties in the eyes of reviewers by failing to adequately explain its assumptions in calculating the cost of developing a tanker.”
Apparently a judgement was made by the AF for “failing to adequately explain its assumptions”. Again, its more than just a simple cost.
Again, this is why it would be nice to see the judgeing that the AF did.
> list price does not equal actual price
YES, YES, YES, A thousand time yes. I KNOW THAT.
But from all the sources I have seen the A330-200F goes for about $175 million apeice whereas the 767-200ER is about $124 million apeice. So when the list price != actual costs rule is applied, it should be appleid to both airplanes, And yes I understand that Airbus cuts more off their proces than Beoing, but it is still a $50 million difference between the two planes. Airbus would have to cut 30% of the cost off the A330 to get it to the list price of the 767, thats before Beoing makes any cuts.
AGAIN, this argument is why I want to see the numbers.
> There could be more to the cost/price evaluation than unit cost and lifecycle cost.
i don’t see anything that would be significant compared to those two
> Apparently a judgement was made by the AF for “failing to adequately explain its assumptions”. Again, its more than just a simple cost.
the ‘more than’ you refer to is what the AF believes about the bids
there’s what the companies said the cost would be and there’s what the airforce BELIEVES the cost will be
can we at least agree the AF believes the KC-30 will have lower total cost?
> I have seen the A330-200F goes for about $175 million apeice
the KC-30 isn’t based off the A330-200F
> And yes I understand that Airbus cuts more off their proces than Beoing, but it is still a $50 million difference between the two planes. Airbus would have to cut 30% of the cost off the A330 to get it to the list price of the 767, thats before Beoing makes any cuts.
yup, that’s what they do
Hmmm! Think this over; if the europeans are subsidizing eads, are they subsidizing our nation’s defense in this case?
Is this a good thing?
As has been mentioned, NATO is full of equipment purchased from US suppliers, with a lot of arm-twisting on our part.
Maybe the Aussie had it right, let’s look at the world market!
I can’t wait to buy my MAHINDRA small diesel pickup, since US makers won’t build one!
If the USAF has decided that the Airbus aircraft is the better value, then I support that. However, it’s only common sense that the AIRFRAME should be built in the USA.
What needs to be done is for Airbus to license production of the A330 in the USA. This is nothing new in the aerospace industry. The Dutch, South Koreans, Maylaysians, Japanese, Chinese, and to a limited extent, the Australians have done this with American commercial and military aircraft in the past. Licensed production is smart, makes sense, and creates jobs for the buying country.
The current plan is for Airbus (EADS) to build the airframes in Europe, then fly them to the USA where they will be fitted with tanker gear and other USAF-specific equipment by Northrop-Grumman. The current plan is a bad deal for America and its workforce, especially when we are now in a recession (according to Warren Buffet). The aerospace industry is one of America’s crown jewels and needs to be maintained.
> i don’t see anything that would be significant compared to those two
Which is why seein the actual AF judgement would be usefull.
Some insight could also be gained from looking at past AF judgments.
> can we at least agree the AF believes the KC-30 will have lower total cost?
I cant agree to that now, until I see what the AF was actually judgeing them on. This has been the point all along.
> yup, that’s what they do
Okay, then show me where a A330 costs < $125 million per plane. Thats what it will take to undercut Boeing, and again that without Boeing cutting its price.
> The aerospace industry is one of America’s crown jewels and needs to be maintained.
while that may be true in general
1. i can assure you the 767 line is no crown jewel
2. boeing will be just fine without this win
3. this actually increases the aerospace industry in the US by creating new capability that wasn’t there before
>> can we at least agree the AF believes the
>> KC-30 will have lower total cost?
> I cant agree to that now, until I see what
> the AF was actually judgeing them on
then you’re just being obstinate and i can’t help you
the KC-30 wouldn’t get rated superior in price unless the USAF believed it to have a lower total cost
> Okay, then show me where a A330 costs million per plane. Thats what it will take to
> undercut Boeing, and again that without Boeing
> cutting its price.
“EADS subsidiary Airbus usually underbids Boeing in commercial competitions”
that seems pretty clear to me
or do you think he’s lying?
give it up, the KC-30 was at least as cheap if not cheaper than the KC-767
> then you’re just being obstinate and i can’t help you
> the KC-30 wouldn’t get rated superior in price
> unless the USAF believed it to have a lower
> total cost
Actually, I am not being obstinate, I am waiting for all the information to come out before making a judgment. Some would say that not examining all the information is obstinate. And like I say, I am waiting for all the info.
> “EADS subsidiary Airbus usually underbids
> Boeing in commercial competitions”
> that seems pretty clear to me
What seems pretty clear to me is that you are taking what he said out of context. Airbus may underbid Boeing on similar aircraft, but these two are NOT similar. Obviously the 767 is smaller, Thats why it is $50 million cheaper.
I asked you for an example of a A330 being cheaper than $120 million. Mr Thopmsons assertion that Airbus often underbids Boeing offers absoulty ZERO poof that the A330 can be that cheap. To say otherwise is in a word obstinate.
> or do you think he’s lying?
I have know idea if he is or isnt, but again his statement offers NO insight into a $120 million A330, which was the issue.
> give it up, the KC-30 was at least as cheap if
> not cheaper than the KC-767
As I have said, you have NO proof of this, You or any else, cant say anything like this untill the relevent info is released by the AF and or Boeing.
> I am waiting for all the information to come out
enough has come out to make an informed decision
> but these two are NOT similar
they compete each other in the commercial world
or rather, they don’t compete, the A330 killed the 767
> Mr Thopmsons assertion that Airbus often underbids Boeing offers absoulty ZERO poof that the A330 can be that cheap.
the whole article was in relation to the 767 vs A330
i trust he wouldn’t be using something solely from 737 vs A320 as that would be irrelevant
> I have know idea if he is or isnt, but again his statement offers NO insight into a $120 million A330, which was the issue.
if he didn’t think it offered any insight, why did he say it?
don’t forget the first time EADS’ bid was $10 BILLION lower
you say it’s not relevant, but it is
ps what you ask for is practically impossible to get b/c airline deals are confidential. you can get ‘A underbid B’, but you usually won’t get hard numbers
> enough has come out to make an informed decision
With all due respect to Mr. Thompson, his one paragraph write ups is not enough info for an informed decision.
> they compete each other in the commercial world
> or rather, they don’t compete, the A330 killed the 767
The 767-200 holds 181 or 224 pax depending on 3 or 2 class configuration, in comparison the A330-200 holds 253 or 293 pax in the same configuration. It seems to me that a 70 pax difference would indicate that they are not competetors.
> i trust he wouldn’t be using something solely
> from 737 vs A320 as that would be irrelevant
Well the statement “EADS subsidiary Airbus usually underbids Boeing in commercial competitions” Is somewhat ambigous since he doesnt specify what the actuall products are.
> if he didn’t think it offered any insight, why did he say it?
I dont know, but I am trying to find out if anyone can get a A330 for $120 million. And he didnt address that.
> don’t forget the first time EADS’ bid was $10 BILLION lower
Okay then, what was the price of the 767 and the A330 then? and what went into those cost?
> ps what you ask for is practically impossible
> to get b/c airline deals are confidential. you
> can get ‘A underbid B’, but you usually won’t
> get hard numbers
Funny, you say we dont know the prices,but you are so darn sure that you know the A330 is cheaper than the B767.
In the end all we know is that the A330 tanker will cost $178 million per plane. For the KC-767 to be equall or more expensive then it has to be $54 million more expensive than the Boeing LIST price. But since they all sell below list its would be even more expensive.
A lot of factors impacted 767 sales, not the least of which the stretched 757 and the 777. Boeing found that airlines liked the 757 for the cattle car runs and the 777 for the long hauls. the 767′s niche became too narrow. Too bad, because I really prefer it over the 757, which feels like you’re riding in a mailing tube.
If this is a case of Northrop Grumman showing the Customer they can get more for their money than they expected, it isn’t the first time. The first would be the ATB competition which brought us the B-2. Of course, Boeing was teamed with NG on that program, and of course, that didn’t stop Boeing from trying to steal the contract when the AF forced a redesign with radically new mission profiles halfway through the design cycle. With Boeing nearby it’s best to remember the old saying: “Hold your enemies close and your friends closer.”
Irtusk–you’re doing a great job fighting on many fronts. Kudos.