Monday, June 30, 2008

France Set to Announce Purchase of EADS Tankers Without A Competition

Last week Aviation Week military editor Amy Butler, in a for subscribers only Aerospace Daily & Defense Report (Vol. 226,Issue 24), broke a bit of news of which no one seems to have grasped the significance. Specifically Ms. Butler reported that:
Plans for French President Nicolas Sarkozy to make a big announcement next month at the Farnborough Air Show related to his country's own refueling tanker program have apparently fizzled out after recent events in the United States, according to industry sources.

Sarkozy was set to announce that Paris was planning to buy A330-based tankers assembled at the yet-to-be built EADS North America manufacturing facility in Mobile, Ala. The country has a need for new refuelers, though a procurement strategy hasn't been released.
If this report is accurate, it means that France planned to buy EADS tankers without a competition. And, they hoped that because the tankers would be assembled in the US, everyone here would overlook the fact that this once again proves the hypocrisy of French defense firms.

These firms demand that they be allowed equal treatment for US defense contracts. Yet, behind the scenes, they seek to deny American companies the same rights in their country. Ed Morrisy on the Hot Air blog had a good post on this issue in March.

This is not the first time the France did not allow Boeing to compete in a defense contract. When the France asked for proposals for an air transport contract in 2004 they stipulated that the aircraft proposed must be of European conception. This effectively barred Boeing from participating.

It should be noted that the German's procured A310 tankers from EADS, also without a competition. Granted, the A310s retrofitted for this role were already in service with the German Air Force. But, given that the A310s were originally procured without a credible competition, and that the tanker retrofit contract opened the door for EADS to get into the tanker business, the German's procurement actions should be viewed with some suspicion.

It never ceases to amaze us here at Tanker War Blog how the KC-30 team was able to brand themselves as the defenders of the free-market; while at the same time, labeling all Boeing supporters rank protectionists. Though, we sense that this is about to change.

A case in point is an op-ed that ran in Sunday's Washington Post titled "5 Myths About the Death Of the American Factory". Myth 2 was especially interesting:

U.S. manufacturers can save themselves by investing in innovation.

Okay, but how much are you going to invest? U.S. private-sector companies can't put as much money into technology and research and development as foreign governments do to build up their sectors. As the chief executive of a technology firm with whom I've worked for many years says, "We're the best company in the world, but we can't compete with foreign governments." Consider Airbus. The European Union has put more than $15 billion into building this aircraft company from the ground up. Whatever you may think about the recent U.S. Air Force decision to buy tankers from Airbus rather than Boeing, one thing is clear: Through its subsidies, the E.U. has managed to build a highly competitive aircraft industry. South Korea has put more than $12 billion into its semiconductor industry to similar effect, severely harming the U.S. semiconductor manufacturing base.

At Tanker War Blog we continue to contend that the US government has a duty to balance the promotion of free trade with enforcement of free trade. Competition works great, if the all participants play by the rules of the free market, and if all countries agree to hold free and fair competitions.

If US defense companies are not allowed to compete at Away games in certain EU counties, then our government should ban those countries' competitors from Home games here in the US. Such action is not protectionism; it is enforcement of free market rules.


Anonymous said...

I guess it is because no one really reads the papers, just look at the pictures. but when it comes to this people at boeing they have been dealing with Airbus and there tactics since it was first started northrop only really knew them of a name. If they get this Contract i will quit paying my taxes. and as a recent article you published talked about bribeing goverments, this article goes hand in hand you would have to be stupid not to see this.

Anonymous said...

I wouldn't be suprised if this is another canard launched by folks desperately looking for anything to justify the KC767 that seems so hard to justify.. Now if the darn thing was only about as capable as the KC30, we didn't have to go through all this.


Anonymous said...

as #2 post shows just another person that looks only at the pic did they search out the Highlights and read any articles. I think not only read what they want to see.

Anonymous said...

Methinks #3 missed the winky-wink from #2. It's an important winky-wink in this context.

This blog entry was a very important one, in light of the pro-KC30 crowing over how successful the EADS product has been against that of Boeing in overseas competitions.

Anonymous said...

A detail about the German A310. The first A310 were donated by former GDR state airline Interflug to German Air Force. Therefore there was no competition.

When the France asked for proposals for an air transport contract in 2004 they stipulated that the aircraft proposed must be of European conception. This effectively barred Boeing from participating.

Specs are even better.
"22 LD3 containers" 767 can handle just the smaller LD2.
"aircraft of civilian type, less than 15 years old as determined by the production date" a 777 would be appropriate.
"The aircraft is expected to navigate in any zone without limitations on their utilization or destination." No ETOPS allowed.

Is France going to buy Ilyushin Il-96?