Boeing Loses

Floor Speech

BOEING LOSES -- (Senate - March 04, 2008)

Ms. CANTWELL. Mr. President, I rise to join my colleagues, the senior Senator from Washington, Mrs. Murray, who did an eloquent job talking about the shocking news that came out last Friday about the Air Force's decision to go with the KC-30 tanker over the Boeing KC-767 plane. I know my colleagues from Kansas want to continue this dialog as well.

What we see is a lot of concern and questions that have not been answered by the Air Force. I appreciate the fact that Speaker Pelosi also issued a statement today questioning the decision by the Air Force and asking for further congressional review. That is why my colleagues are here this morning. We want answers from the Air Force. Frankly, we don't want to wait another week to get them. For 75 years, Boeing has been making tanker products. They know what they are doing. They submitted a bid to the Air Force for a more flexible plane with a cost-effective life cycle. It has proven boom technology. This technology is used to refuel aircraft for the militaries all over the world. Other governments have already bought this product and have made the decision to use this technology. It is amazing to my colleagues and me that the Air Force would make this decision about these planes based one bid that is a proven technology and has proven successful for more than 70 years and all of a sudden switch to a product that has yet to be built and yet to be proven. The Air Force has made assertions and assumptions without giving Congress the answers.

What I am really amazed about, frankly, is that we are seeing some of the highest fuel costs in America and that impacts our Air Force as well and I want to know why the Air Force picked such a large plane, when their specs clearly asked for a medium-sized plane. If the Air Force wanted a large plane, the Air Force should have simply asked for a large plane. The Boeing Company could have provided a 777 instead of the 767. But that is not what the Air Force asked. I take the Air Force at its word when they say they want to be more energy efficient. In fact, the Air Force uses more than half of all the fuel the U.S. Government consumes each year. Aviation fuel accounts for more than 80 percent of the Air Force's total energy bill. In 2006, they spent more than $5.8 billion for almost 2.6 billion gallons of jet fuel, more than twice what they spent in 2003.

If anybody thinks fuel costs are somehow magically going to come down, they are not. The Air Force needs to consider the impact of fuel costs in the future. In fact, I believe it is a national security concern as to where the Air Force is going to get fuel in the future.

Just last Friday, the Air Force Assistant Secretary told the House Armed Services Committee that it wants to leave a greener footprint with more environmentally sound energy resources. Well, if the Air Force is coming up to Capitol Hill talking about a greener, more fuel-efficient plane and at the same time awarding a contract for a plane that burns 24 percent more fuel than the Boeing KC-767, they do not have their act together.

This is what Assistant Secretary Bill Anderson said:

The increasing costs of energy and the nation's commitment to reducing its dependence on foreign oil have led to the development of the Air Force energy strategy--to reduce demand, increase supply and change the culture within the Air Force so that energy is a consideration in everything we do.

Well, I certainly want to know what consideration the Air Force gave to this new energy mandate in their decision to go with the KC-30 over the KC-767, when the Boeing plane is 24 percent more fuel efficient.

Now, one of the things the Air Force stressed in the contract announcement was the size of the KC-30. It is a slightly bigger plane, and the Air Force claims to want that larger plane because it can carry more fuel. However, that fuel is going to cost us.

Since the Vietnam war, the average amount of fuel offloaded from these air tankers is 70,000 pounds. When these tankers are out refueling planes the average amount of fuel they need to carry to complete a mission is less than 70,000 pounds, and that is during combat operations when they are very busy, which obviously would be less during in peacetime operations. This begs the question: Why did the Air Force choose a foreign-built tanker that has the capacity to carry 245,000 pounds of fuel versus the right-sized plane from Boeing that carries 205,000 pounds of fuel? Why did they choose a plane they know is going to have more expensive life cycle costs and more expensive on fuel costs, instead of buying the right sized plane? That would be like driving a humvee to the Capitol every day when you could drive a more fuel-efficient car. The Air Force has to live up to their commitment to a greener energy strategy.

The second issue that is troubling to me is the fact that there is an issue about runway, ramp, and infrastructure capacity. The KC-767 tanker is a smaller plane, it has ability to land on many more airstrips we have access to around the world. The Boeing tanker can land on shorter runways, takes up less ramp space, and altogether needs less infrastructure. The KC-767 can operate at over 1,000 bases and airstrips worldwide.

For example, at a strategic central Asian airbase in Manas, Kyrgyzstan that I think is key to the war on terrorism, the current runway cannot support the KC-30 plane. It cannot support the plane the Air Force just selected. However, it can support the KC-767 that Boeing offered. Again, it begs the question: why did the Air Force would choose a larger plane when it knows it is going to be unable to land at many bases and airstrips? Are we going to have to pay for the cost of infrastructure improvements of that as well?

It is very important, given these fuel issues and these infrastructure issues, that the Air Force prove to Congress that the cost-effectiveness throughout the life cycle of this procurement really does pan out. If we are simply talking about buying cheaper planes up front, but the life-cycle cost of these planes turns out to be exorbitant--because the fuel is more expensive, because the plane cannot land at various bases--and you have to spend billions more on both of those things, that is very troubling.

The reason this is so troubling to me is because I have seen this same issue play out in the commercial marketplace. Airbus planes have been backed by government financing in the commercial markets, so they were able to put a cheaper plane out in front of many governments across the globe. Boeing, on the other hand, has proven with technology to have more fuel-efficient planes, and they were able to show people that the true life cycle costs of their planes were actually more cost effective. The end result is a WTO dispute over the financing of Airbus by government-backed operations.

What I am trying to say is that the private sector has figured it out. In the commercial space, fuel-efficient planes are paying their way. I wonder why the Air Force did not figure out the same scenario and did not figure out that they will save U.S. taxpayers' dollars by having a more fuel-efficient plane. I also ask the Air Force to explain when the Boeing tanker is 22 percent cheaper to maintain because of the flexibility advantages it has.

I have concerns that Boeing worked hard to meet the requirements the Air Force set. The 767 platform best matched what the Air Force wanted. If they wanted a bigger plane with more capacity, they simply could have asked for one. Yet here we are with a questionable decision that I think raises concerns about the ability of the Department of Defense to maintain critical skills. We need to make sure there is a homegrown workforce and engineers to deliver products we need.

The U.S. Government needs to consider the national security implications of fuel efficiency in this procurement decision. It needs to take a look at the U.S. workforce and determine whether the loss of high-skill manufacturing jobs is impacting our national security. I plan to ask the Government Accountability Office to investigate these issues and report back to Congress so we can have a full debate and move ahead.

I will remind the Air Force that in the conclusion of their testimony last week before Congress, they stated: We will continue to wisely invest in our precious military construction and operations and maintenance. They highlighted energy as the key element wise investment. I think the Air Force has a lot of explaining to do, and I want to know why they have made this choice. I guarantee you that Congress will continue to ask the tough questions until the information is clear to everyone in America.

Mr. President, I yield the floor.

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