While deliberations on the draft RFP for the KC-X tanker contract are still continuing, Arizona Senator and former Presidential candidate John McCain bizarrely questioned the US Air Force focus in this contest favours a smaller airplane.
The single most critical component of the KC-X competition that may ultimately decide whether the 767 or A330 wins the deal is that of infrastructure. Quite why a Republican politician supports a foreign entity for a strategic military procurement is as bizarre as the very short-lived Airbus “E-Squared” concept (quietly born and brushed aside) during the limelight of the Boeing Sonic Cruiser days.
Adding to the complexity of this new RFP is the issue of the preliminary WTO ruling against Europe and Airbus, and in particularly the aspect of retrospective penalties for all Airbus airplanes from the A300 to A380 that received state launch aid that the US Air Force may well have to factor in.
Image courtesy of UnitedStatesTanker.com
Amidst the melee of the arguments and counter-arguments, Dr. L. Thompson from the Lexington Institute summed up the crux of the political matter thus and hit the nail on the head:
“It is important to recognize that the argument over illegal subsidies is really between Boeing and Airbus (or between the United States government and the European Union), and that Northrop Grumman is a bystander that has been dragged in because Airbus made the plane it wants to use for its tanker. But once the controversy is seen for what it is — a trade dispute — it becomes obvious that Boeing is right and Airbus is wrong. European governments have violated free-trade rules by subsidizing Airbus for decades, providing benefits that an impartial panel of trade experts has determined to be illegal, and as a result of those benefits U.S. companies have lost hundreds of billions of dollars in sales.“
Dr. Thompson’s comments echo those of Boeing’s legal counsel team whom I spoke with at length on the subject and the central issue surrounding the KC-X contest is one that far from being swept aside, is gaining more momentum.
“We’ve had a finding that its against international rules to have given these subsidies and with those subsidies obtained market share that one shouldn’t have been able to obtain otherwise and be able to use those very same subsidies to do it all over again [in the KC-X competition] and that’s the part that’s an economic matter and a trade policy matter which is offensive,” said Bob Novick, a member of Boeing’s legal team dealing with the WTO ruling.
With unemployment in the United States running at high of 10.2%, both Northrop Grumman/EADS and Boeing will argue that they are the best choice for securing future jobs in this much specialised arena.
Thompson ends by saying:
“…how can the Pentagon simply ignore the position of the U.S. Trade Representative, when trade deficits are destroying the value of the dollar and the military is planning to conduct many more competitions for weapons systems based on commercial products available from overseas sources? “
He has a point. Several in fact.
The real issue is just how far all sides will go to force the WTO edict onto the US Air Force and factor that into the final RFP.
Northrop Grumman may well be thinking about an exit strategy if the A330 subsidies come into play, because it and EADS would have a hard time proving the same charges for the 767, particularly when infrastructure costs of the eventual procurement will factor in cost of production. There is no tanker facility for the A330 in the US. The 767 does.
On the bright side, EADS will no doubt be pleased that the A330MRTT successfully transferred fuel through the boom during night time refuelling tests – although again the image leaves a lot to be desired.
As much as the press and supporters of a tanker line in Alabama may want to avoid it, on the face of it, the costs the A330 incurs may just be one the US Air Force may not be willing to bear – but let’s be fair, the 767 and A330 both have much to play for on Capitol Hill.
From Wikipedia on the KC 135
“Operations and support costs for the KC 135 Fleet are estimated to grow from about $2.2 B in 2003 to $5.1B in 2017..a growth rate of 6.3 %
There are currently 505 Aircraft: 199 on active duty; 80 Reserve: 222 National Guard
There is also a list of the many Varients on the model. Many have been upgraded over the years and many have been reengined.
So, it must be interesting where the first tranch are scheduled for replacement
“For someone like him to have served in the US Army ”
Sen. McCain is a veteran of the US Navy and a former Naval Aviator.
Sorry for being late – I’ve had a lovely vacation, thank you very much!
#1, there is no WTO preliminary ruling – there is a draft proposal – both parties get to input and amend before the WTO panel puts out it’s draft proposal that will then (in all likelihood) be accepted in it’s entirety by the WTO.
#2, there will be an WTO draft proposal ruling that will find Boeing & the US gov’t are guilty of similar facts of comparable magnitude. I don’t know this far a fact – but my water is seriously tingling.
Let’s ignore #1 – Let’s even assume there is an ruling. The WTO rules specifically forbid any party to implement punitive action before the WTO has ruled and the guilty party has had a chance to correct their fault. This has not happened. Don’t try and change the rules because they don’t suit you – either use the WTO and ALL its rules, or disregard the WTO in its entirety.
Lets ignore #2, Only the Airbus & the EU are found guilty and need to make reparations. How much do you really think it is going to be – and how much will trickle down to the tanker. remember it’s only a few aircraft a year, in the low tens per year I think. Any damages would be amortized over a long period and over the full production & product line of Airbus.
Let’s ignore both – Would it make you proud to be an American knowing that your son, daughter, relative or friend is risking his/her life on a godforsaken patch of dirt halfway across the world depending on the second best choice just because the baseline model of the best was engineered in the EU – for decades your strongest supporter and best ally, whatever you think of the french in particular (no one likes them – it’s their forte) – despite the fact that the EU company was willing to go to extraordinary lengths to place as much of the production and assemble of each airframe in the US. Or is it just your own job, not their lives you’re interested in…
if the 767 is the better choice let that be chosen – if not, than to bad and get Boeing to work on a KC777.
and could it maybe have something to do with the fact that it is highly contested military technology that the picture leaves much to be desired by you? would you like a working CATIA model so you can help Boeing along with their proposal?
13. Ed | November 12th, 2009 at 14:57
1. Wrong, this WTO case is US vs. EU on illegal subsidies. The WTO has ruled that EU has Provided them. No unfair advantage was proven because that’s not what the WTO is about. the subsidies are wrong, whether they benefit anyone or not.
2. The counter case is about 6 months behind the US case, not a year. Both cases are important because if either company is found to have received illegal subsidies ALL PRODUCT of said company are subject to possible punitive action.
3. wake up and smell the bacon. ALL AVIATION is heavily subsidized. Our business is a global jobs program – deal with it.
4. because it is likely Airbus will open themselves up to an easy loss when Boeing/ US congress finds out airbus right out lied and didn’t actually do the night refuel. A400M, and you talk about apples and oranges? – I say pots and kettles.
how much does Boeing sped again on capital hill lobbies – I remember a figure of some millions.
How much would you pay to buy McCain?
22. Edd | November 12th, 2009 at 21:41
so both will be available when this latest round (not final?) is finished?
25. Sal | November 12th, 2009 at 23:49
“holding on to straws” mean anything to you?
31. Sal | November 13th, 2009 at 14:52
sorry, but it sounded like you questioned the MRTT contact by demanding a very specific picture and as long as you hadn’t seen it wih your own eyes, you wouldn’t accept it had happened.
I’d also like to see all teh MRTT refuel pictures, ’cause airplanes are pretty!
39. Vero Venia | November 15th, 2009 at 17:05
now imagine your choise with only two options, the I-phone (assuming it does the scripting, non-mandatory req’d) and a Nokia 3310.
Which would you take – a free 3310 or a $200 I-phone (I’d take the 3310)
44. Vero Venia | November 17th, 2009 at 09:36
would you consider toilet flushing pressure a mandatory requirement?
would you consider the amount of man-hours it takes to change from full freight to pax a mandatory requirement?
45. tommytoyz | November 18th, 2009 at 08:47
can you provide any reference for your quoted figures – was that $53B for the past 25 years of 340 KC135 operations?
47. Curious | November 18th, 2009 at 15:42
assume all you want – do you have a basis? Why exactly does the KC-135 warrant replacement? It’s designed mostly to safe-life principles, before we knew anything but the rudimentary of fatigue. why not replace those parts that are at the and of their design life and keep flying the rest?
48. keesje | November 18th, 2009 at 21:31
1) who would you resell them too?
2) I remember some number in the billions a year… not that much considering the 53 vs 108 claim
3) good question, again – what’s the basis for Curious’ numbers
49. Jack | November 19th, 2009 at 14:30
learn to type, retard – then explain how McCain has “destoryed America’s ability to rely on its own aerospace industry” – way I see it, US industry did that all by themselves – see US automotive industry!
Mr/Ms Ikkeman
Why the need to call me a retard because I made a spelling error?
If anyone is a retard its you.
You spelt, “choice”, “the”, “with” all incorrectly – not to mention the grammatical errors in your comment.
Practice what you preach, retard.
54. Jack | November 27th, 2009 at 14:47
So I guess you agree that making unbased insults isn’t quite the thing to do – so lets get to the heart of the matter.
Why should McCain be stripped of any medals – do you propose we should try to change the past to fit the future? Ever read 1984?
How does McCain pose a threat to US interests and security. All he does is force the AF to consider all options based on their merits instead of continuing the incestuous relation between the US defense and industry
He has not destroyed USAF’s ability to rely on US industry. to credit him with such extensive and far reaching powers is to grossly overestimate his abilities.
and it’s Mr, thank you very much
ikkeman
22. Edd | November 12th, 2009 at 21:41
so both will be available when this latest round (not final?) is finished?
Not necessarily, Airbus have stated that they have already got 80% or the requirements met, so there could still be surprises!
As for boeing, their current Gen 5 boom (used for Japan and Italy) is only capable of offloading 900GPM (the requirement for 1200GPM may be met with the Gen 6 boom (Boeing only state it can offload ‘more than 1000GPM) either way, its unmade and untested).
The Tanker for italy and Japan is the 767-200, Boeing have not (I am open to being corrected on this), stated they will use this, or, as per the earlier competition a model that combines the 200ER fuselage, -300F wing, gear and cargo door and floor, -400ER digital flightdeck and flaps, uprated engines and “sixth-generation” boom.
Clearly this will mean a great deal more development work, or a degredation on performance over their previous offering to the USAF.
56. Edd | November 30th, 2009 at 09:05
Boeing have clearly stated they will not again go down the road of combining the best of various models. It’ll be a direct COTS approach.
Fair enough, though i suspect this will make the performance advantages of the KC-30 even greater, especially when operating from shorter strips.
perhaps – but the competition stops at 1% cost difference…
53. ikkeman | November 27th, 2009 at 05:18
Sorry for being late – I’ve had a lovely vacation, thank you very much!
Clearly rested.
Just on the 3310 and the iPhone; the only thing the 3310 can do that the iPhone can’t is survive being thrown at the wall many times – through no fault of its own, rather network congestion. Apparantly the iPhone does everything. So a more useful Nokia for comparison would be the any of the E-series, which also do everything, but don’t have touchscreens.
60. Paulo M | December 1st, 2009 at 20:07
Paulo – KC-45 is not like a KC767 with touch screens. It is a much more capable item, and while it is true the KC767 fulfils most if not all the important mandatory requirements jut like the kc-45 – the 45 does offer much more.
So no, it’s not a choice between a high-tech phone and a high-tech phone, it’s more like a choice between a basic model that conforms to all the mandatory requirements (it’s mobile, allows you to call and text) like the 3310.
Notice that even Mr Venia said he only looked at models that allowed for his “nice to have” features.
On unrelated news – NG is threatening to drop out again – I guess the 1% cost difference allowavle is to small.
Boeing has one very simple problem:
Their latest commercial passenger aircraft was designed 50 years ago. A ying company.
62. eric lieutenant ( res ) Finnish Air Force | April 3rd, 2010 at 17:09
Boeing has one very simple problem:
Their latest commercial passenger aircraft was designed 50 years ago. A ying company.
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The plot thickens:
BY ALIENS/DERIVED FROM ALIEN TECHNOLOGY!?….