Air Force Contract Award

Floor Speech

AIR FORCE CONTRACT AWARD -- (Senate - March 10, 2008)

Mrs. MURRAY. Mr. President, in the last several days, we have learned some surprising things about the Air Force's decision to award a $40 billion contract to the European company, Airbus.

The Air Force wants Airbus, which is headquartered in Toulouse, France, to supply our next generation of aerial refueling tankers. It chose Airbus over the American company, Boeing, which has been making those tankers for the last 50 years.

I have made it clear over the past several days that I think this decision is shortsighted and dangerous. But today, even more questions have been raised about the process the Air Force followed to make this decision. So I want to take the opportunity this afternoon to walk through the impact I believe the Air Force decision will have because I think we need to take a good hard look at whether we as Members of the Senate think this contract should be finalized.

First, we need to be very cautious about any decision that awards the right to build a critical part of our military air technology to a company that is controlled by a foreign government. What happens if that government disagrees with us on foreign policy? What if it decides it wants to slow down our military capacity? Do we want another country to have that kind of control?

The Air Force, of course, did not take that into consideration. They said they didn't have to. I think this case is a perfect example of how misguided that idea is.

Airbus is owned by the European Aeronautic Defense and Space Company--EADS--which in turn is controlled by several nations. Among them are countries which have not always agreed with the United States on foreign policy. They include Russia, which has a 5-percent stake, and the United Arab Emirates, which controls 7.5 percent of EADS.

Now, EADS has already demonstrated it is willing to bend the rules if it can help the company make money. I have talked extensively on the floor of the Senate about their attempts to sell military helicopters and planes to Iran and to Venezuela. But now we are opening the doors to a key piece of our military defense to them.

America's global military strength is built on our ability to use our military might anywhere in the world at a moment's notice. Aerial tankers are the linchpin of our air power because they allow the U.S. Air Force to stretch across the globe. Until now, the technology that powered these critical planes rested in the hands of Boeing and its American workforce that has been building them for more than 50 years.

Until now, our tankers have been built by manufacturers, designers, and engineers who are bound by law from selling technology to countries that sponsor terrorism. But as a result of this contract, we are allowing EADS to take over a cornerstone of our military technology, and we are actually paying them to do it. In fact, I argue that decision was a $40 billion investment in the military research budget of EADS and Airbus.

The Air Force has said it wasn't their responsibility to take our security or our industry into account. Well, I say to my colleagues: Congress must--we must--be more forward-looking than that.

Secondly, I question why the Air Force was not required to take the economic impact into consideration when it awarded this contract. If Boeing had won this contract, it would have created 44,000 U.S. jobs. But it is far from clear what kind of an investment Airbus and its partner, Northrop Grumman, plan to make in the United States.

Our economy is hurting. We are nearing a recession, if we aren't already there. Families across the country are struggling to get by, in part because their factory jobs have been moved overseas. Workers across this country are frustrated, and they are angry that at a time such as this, their Government is saying it wants to take American tax dollars--our tax dollars--and give that money to a foreign company to build planes for our military.

We have more reason for concern because for decades Europe provided subsidies, their subsidies, to prop up Airbus and EADS. Airbus, they have said, is a jobs program that has led to tens of thousands of layoffs in the United States, and EADS has made little secret of its desire to dismantle the American aerospace industry.

Our Government, in fact, is concerned enough about these practices that we now have a WTO case against the EU over this. Yet here we are, last week our Government awarded Airbus this $40 billion contract anyway. That should give us a great deal of pause because EADS is already looking to build on the toehold that contract gives them into our aerospace industry.

In fact, a report in a leading French news service today says the executive president of EADS--Airbus--wants to build on the company's success with the tanker contract and propose to the EADS board ``two takeover projects in the fields of defense, security, or services.''

And he said: ``One of them at least should be in the United States.''

That brings me to my final point this afternoon. Why didn't the Air Force consider these obvious questions about national security and about economic security? Well, the Los Angeles Times today suggests an answer. They report on the front page of their paper today that EADS and its partner, Northrop Grumman, may have played a role in narrowing the scope of what the Air Force looked at. In fact, the Times reports that Northrop executives ensured that the Air Force wouldn't ask the competitors how Government subsidies would help pay for the design and development of the tanker--the subject of the very WTO dispute I just mentioned.

According to that article, Northrop made threats in order to shape the criteria the Air Force followed.

The Times reports:

Northrop threatened at one point to pull out of the competition if the Air Force didn't change the way the aircraft would be evaluated.

So did the Air Force pull a bait and switch with this contract? Did it unfairly change the process to benefit EADS?

I believe there are many serious questions about this selection process. As U.S. Senators, it is our job to consider the future of our national security and our defense. I believe we need open and honest answers to those questions before this contract is finalized. In fact, I think we ought to demand the answers. Our economy and our aerospace industry are suffering, and we are at war across the globe. We have to get this right. Our future depends on it.

Mr. President, I yield the floor.

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