Takes Flight

30 Apr 2008
Poland Minister Warns of Possible Protectionism in Other Nations
Reuters reports that Poland's deputy prime minister is saying that Boeing's effort to overturn Northrop Grumman's contract to build America's next generation of aerial refueling tankers could backfire on the entire American defense industry by prompting protectionist measures by other nations.

According to Reuters, "Waldemar Pawlak, who also serves as Poland's economy minister, expressed concern about moves by some U.S. lawmakers to block funding for the deal" so that Boeing can claim the contract.

"One can wonder in general if globalization has made a U-turn in the United States," Pawlak told Reuters in an interview during a visit to the United States. Pawlak said the threat from Boeing's congressional backers is "a risky approach."

Pawlak's comments echo the sentiments of Pentagon procurement chief John Young, who last month warned that congressional action to take away the contract Northrop Grumman won fair and square could result in retaliatory measures by European countries, which in turn could hamper U.S. defense exports.

For every dollar America spends abroad on defense-related purchases, foreign governments spend upwards of $4 buying from American defense contractors.

Boeing has appealed the tanker award to the Government Accountability Office, but its backers in Congress say they will try to halt funding for the Northrop deal or add funding for the Boeing tanker, even if Boeing loses the protest.

Several lawmakers have vowed to curb funding or otherwise halt the Northrop deal, including Rep. Duncan Hunter, a California Republican and ranking member of the committee, and Rep. Norm Dicks, a Washington Democrat, Reuters noted.

Ironically, Hunter's San Diego-area district stands to gain just over 2,000 jobs from the Northrop Grumman contract; overall, the deal would support 48,000 American jobs, split between Northrop Grumman and 230 suppliers in 49 states.

Citizens Against Government Waste, a nonprofit, nonpartisan watchdog group, on Tuesday called for an end to the lobbying effort by Boeing and its backers in Congress.

"The fact is that in today's global economy, companies like Boeing sell to European and other foreign governments all the time, their companies sell to us, and most U.S. defense systems, including those built by Boeing, contain foreign-made parts," the group's president wrote in an open letter, Reuters reported.

Reuters also notes that even though the Air Force has asked for a cooling of the rhetoric over the tanker, Boeing took out a full-page ad in the Washington Post Tuesday claiming that its plane was more capable, cheaper and less risky than Northrop Grumman's.

All those claims are contradicted by an Air Force document explaining its selection process that was provided to both companies. The Air Force makes clear Northrop Grumman's bid was superior in 4 of 5 major selection criteria – including program risk, the subject of Boeing's ad.

Read the entire Reuters story

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