Madam Speaker, Mr. Tiahrt of Kansas and I, and others may join us later, have come tonight to talk about an important issue with large national ramifications, and that is the decision by the United States Air Force to decline a contract…
Madam Speaker, Mr. Tiahrt of Kansas and I, and others may join us later, have come tonight to talk about an important issue with large national ramifications, and that is the decision by the United States Air Force to decline a contract for our next extremely important tanker and to give it to a consortium, a very significant portion of which will be manufactured in Europe through a consortium in part with EADS and the Airbus company in Europe.
I represent an area north of Seattle with thousands of Boeing workers; so obviously this is an important issue in my district. Certainly the hometown team is Boeing.
But our discussion tonight will be about why all America ought to be very concerned about this decision for several reasons. And it is an obvious situation where there is very significant employment in my district that any Congress person would be concerned about that, but what we want to
talk about tonight are the national ramifications and why we believe this is a very, very injurious decision that needs to be reversed one way or another.
For background in this regard, the very able and really spectacularly performing aircraft, the KC-135, that for decades have provided the very backbone of our United States Air Force capability, will soon be at some point entering their obsolescence. Herculean efforts have been put forward to keep those great airplanes in the air, but at some point we've got to have a new airplane, and we know that that is the case.
So we have been engaged in an effort to provide another replacement. A good United States product, Boeing, competed with subcontractors across the United States for a 767 airframe that we believed was perfect for the task, and by all information provided, the Air Force would provide the capability that was needed by the Air Force.
Unfortunately, the Air Force has decided to reject an American contractor on this extremely important contract. And obviously it's important for dollars. It's a $40 billion contract, with a ``b.'' That is a significant contract. But of more importance to Americans are the job and employment prospects, and obviously that's important in the aircraft industry. If we see what has happened recently in the last decade, we know why it's important to think about this issue.
If I can refer to a chart showing the decline in teal or blue, this shows United States aerospace industry employment from 1979 to 2007. We have suffered a very, very significant decline, just about 50 percent of employment jobs in the United States compared to what we had in 1983, a peak year. Now, that has corresponded with the rise of the Airbus aircraft deliveries that have gone up, as indicated in these red bars, pretty much every year since about 1979. So we have had a significant loss of employment in the United States already in our aerospace industry. It has been in sync with the rise of Airbus sales. And we respect competition in America and should not decry or shrink from competition, and we would congratulate Airbus in a legitimate competition in any of these sales. But we point this out to show that we have already suffered a significant decline of thousands of jobs in the United States. So now we have a situation where that loss will be exacerbated by this decision should it stand.
Now, what is at stake here potentially could be 44,000 American jobs. Predictions are in that range of jobs that would have been involved in this contract. We know that we get different stories about where the Airbus employment will be. I want to point out one of the curious things, if I can. We get certain different viewpoints about where the jobs would be if, in fact, this contract is ultimately granted to Airbus. I note a newspaper article here in Les Echos, and I may mispronounce that, in Europe when Airbus talked about the employment on this contract. The article says that 76 percent of the employment associated with this tanker contract would be European and only 21 percent would be combined United States and Canadian content. That's in the article as publicized in France. In the United States, the rather large public relations effort that has gone on through Airbus, in fact, says it will be 50 percent in the United States. So it appears, at least in one instance, Airbus suggests that only 21 percent of the product in this tanker will be in the United States, and in America they suggest it will be about 50 percent. Some could chalk that up to hyperbole, salesmanship, but it means tens of thousands of jobs to Americans across this country, not just in the Seattle area where I reside but contracts across this country. We think that's significant and it's unfortunate. So this is a very significant thing that we are here to talk about tonight. It's not only employment but it's capability as well.
So we are going to talk tonight about the ramifications of this decision, why we think it was inappropriately made, and what we may consider to reverse this decision.
And with that I would like to yield to the gentleman from Kansas (Mr. Tiahrt), who been a stalwart and a champion on educating our colleagues about the importance of this, something we are going to talk about tonight at some length, which is the favorable treatment of Airbus by the European governments and why this has skewed this particular contract.
Will the gentleman yield just for a minute?
I want to point out about this cost. Even under the Air Force's own accounting, even with these what you may consider rigged accounting standards that Mr. Tiahrt talked about, even under the Air Force's accounting standards, they concluded that the 767 is about 24 percent more fuel efficient than the Airbus product. You're going to save massive amounts on fuel over the lifetime. In fact, the Air Force estimated the Airbus product will burn $30 billion more fuel over the lifetime, even under the rigged accounting standards.
So the point is that we need the Air Force from a taxpayer standpoint to be looking at the operational cost. We just had the executives of the five biggest oil companies today. Those oil prices are not going down any time soon. If anywhere, they are going up.
So this is why we are saying that the country, not just the place these planes are made, but the whole country has a stake in this to really look at the operational costs on that.
Thanks for yielding, Mr. Tiahrt.
If the gentleman will yield.
So do I take it that in the current situation we would be issuing a contract for up to $40 billion with no enforcement mechanism to enforce the American content situation. Is that a fair statement?
That's most disturbing because of that experience and because of reading that in France, they tell the French they are going to have 76 percent of the jobs in Europe. Then they come over in America and tell us they will maybe have 50 percent. This is one reason, just one of the reasons this contract has to be reviewed.
I want to mention one now just before I yield to Mr. Loebsack for a moment. There is another aspect of this that is outraging Americans, and certainly is in my State, and that is that we are issuing this $40 billion contract to a company that essentially one of the partners that the American Government itself says is acting illegally. Because according to our U.S. Trade Representative, who has initiated a legal action against these companies for receiving illegal subsidies, illegal subsidies that violate international law, and by extension, violate United States law, at the same time we have taken this almost unprecedented action to bring a case in the world courts, the World Trade Organization, against their illegal subsidies. That is one agency of the United States Government. Sort of the ``cop on the beat''
blowing the whistle. And at the same time, another agency, the Air Force of the United States Federal Government is bailing them out of jail and giving them a $40 billion contract.
That is hard to explain to any American, particularly those in the 300 companies around this country in 40 States that are going to be losing jobs as a result of this. If this isn't a case of the left hand not knowing what the right hand is doing, one hand attempting to sanction these illegal subsidies, and I think anybody who reviews this would conclude there would have been billions of dollars of illegal subsidies to Airbus over the years, we will talk about those in detail, and then to turn around and reward them with $40 billion. They ought to be receiving a sanction from America, a punishment from America, some type of slap on the wrist, at least. Instead, they get $40 billion of taxpayer money. This is wrong by any sense, the code of the West, international trade treaties. This is something we all ought to be united about.
With this, I would like to yield to Mr. Loebsack from the great State of Iowa, who has a concern about this.
We thank the voice of Iowa. This is important across the country. The jobs that Mr. Loebsack is talking about losing would not have been lost if the Air Force had considered the fact that these companies are receiving these illegal subsidies. And it's not just we three Congressmen talking about it, it is the executive branch of the United States, which has fully evaluated this and come to the conclusion these were illegal subsidies.
These were not just small. They received $1.7 billion in launch aid to develop the new A-350. They received $3.7 billion in launch aid for the A-380. That is why our U.S. Trade Representative has started this enforcement action, blown the whistle on these illegal subsidies. Frankly, it has been years later than it should have been. But we have finally done it. It's one of these great sort of black comedies to think in the year period when we finally blew the whistle after all of these years of abuse of these illegal subsidies that disadvantage American workers, that that same year the Air Force ends up giving a contract for $40 billion.
These subsidies are not just an issue of dollars, they are jobs in Iowa as well. I want to thank Mr. Loebsack. I would like to yield to Mr. Tiahrt.
We should point out that this law, this international law against subsidization, has not been waived by Congress. This is sort of a backdoor way to waive an international agreement.
We have an agreement that now we are attempting to enforce that would prohibit this illegal launching. ``Launching'' basically is a situation where a European government assists the private manufacturer, in this case Airbus, by giving them essentially loan guarantees or essentially free money. You give them a loan that they don't have to pay back if the airplane doesn't do well. That is an enormous subsidy, to give free capital, in essence, or low cost capital, when you are manufacturing an airplane. Of course, when you develop an airplane, there are billions of dollars in development costs. Well, if a company like Airbus can go to their governments in Europe and say give us a loan we don't have to repay if the airplane doesn't perform as expected, we don't make money on it, that is an enormous subsidy.
Europeans with Airbus have been doing this for years. We have international laws against that, and those laws are in effect national laws in America. But somehow it is just like we ignored these. It is like they didn't exist.
Congress certainly never waived those laws, the courts have never waived those laws, the President has never waived those laws, the American people have never waived those laws. But somehow the Air Force did not take into consideration these enormous subsidies, and that is why this thing, this contract, has an odor about it, where we don't take into consideration that violation of international and American law.
But I want to talk, if I can, about the capability of these aircraft too, because obviously we want the best possible airplane for the job. There is possibly no more critical infrastructure, certainly to our Air Force, than the ability to refuel our planes. This is the absolute spine of the whole skeleton of the Air Force, to have this refueling capability.
There has been sort of a propaganda war that has been waged by the Airbus folks to sort of suggest that the Boeing airplane wasn't up to the job, and I just want to point out some of the facts about this aircraft that I think it is important to realize.
First off, if you want to look at the only company in this bidding that has essentially ever built an air tanker and has been building them for 50 years for America, it is Boeing. This is the hometown team that has been doing it for decades successfully, and I think we should maybe start the discussion from that point.
Second, the airplane that Boeing bid has some very distinct advantages that somehow were not considered, one of which is that the Boeing airplane can service about twice as many airfields as the competitor. The reason is it can land in shorter, not quite as equipped airfields. It can land fully loaded in 811 airfields around the world, compared to the competitor at 408. This is a distinct advantage, considering we don't know why where the next conflict is going to be. We don't know what sort of developing world airfield we are going to use. The airplane that Boeing proposes can be serviced and can essentially use twice the number of airfields.
Second, and this is critically important, the Boeing 767 is 24 percent more fuel efficient. In these days of a crunch with fuel and global warming we have to be concerned with and the enormous increase in costs that the Air Force is experiencing, this ought to be taken into consideration. That adds up to $30 billion, a distinct advantage.
Third, and this is one that I think is worth mentioning, this sort of propaganda effort that was started by the Airbus folks to suggest that the Boeing Company didn't score well just simply doesn't comport with the facts.
There were several factors, the first of which is called mission capability. When they compete these, there is a very sophisticated way of evaluating these. On mission capability, the Boeing airplane scored blue, which means exceptional, and low risk in the area of mission capability. That is the highest possible rating and I think can be considered the most critical factor in the whole competition. The Air Force concluded that the Boeing airplane met or exceeded all key performance parameters, which are also called thresholds and objectives. The Air Force concluded that the Boeing product actually had significantly more strengths, also called discriminators, than the competitor.
So you had Boeing receiving the highest rating possible for mission capability, it met or exceeded all of what is called KPP thresholds and objectives, and it was graded as having significantly more strengths than the competition, and somehow came up on the short end of the stick.
This deserves not only GAO review, but it deserves Congress reviewing this. As folks know, this is being evaluated now under the protest consideration, and we know it will be looked at carefully. But, frankly, if this does not get the thorough review we want, Congress is going to be looking at this, because these numbers just don't add up to say this was the right decision.
On factor two, proposal risk, just kind of from a commonsense standpoint perhaps we can look at the fact that we have one bidder, Boeing, that has been doing this for decades. They have an airplane, the 767, in the air, providing tanker services, ready to go, against a product that is going to be manufactured in this multi-nation system. To me, that would create significant confidence in the folks that have been doing it and have a plane that is in the air. In fact, the Air Force rated Boeing's risk as low, as it should be.
Surprisingly, the competitor was also rated as low, despite to me obvious risk where you have a multi-country, multi-facility, multi- build approach, contrasted with Boeing's integrated approach to design, build and certify with the existing facilities. So, at worst it seems to me that there is certainly no advantage of the competitors in that regard.
I would like to yield to Mr. Tiahrt. I have several more factors, but I want to yield to Mr. Tiahrt because I know he has a great idea.
Coming back, it is not just cost, it is capability. Bigger is not always better, and I am very concerned here that the Air Force has been lulled into the sense that bigger is always going to be better.
Frankly, when I found out that the Boeing tanker can serve in twice as many airfields, it can refuel the V-22, which is our tilt rotor aircraft, this aircraft they have can't refuel one of our aircraft, we are going with a company that has no boom experience, they have never built an airplane commercially with a boom.
We have decided to reject a company, Boeing, that delivered a 767 to Japan, one February 19, 2008, a second one March 5, 2008, they are flying, they are in the air, they are a known quantity. And we are taking this risk, an uncertain risk, just for this apparent decision that all of a sudden bigger became better, which is very interesting, because Boeing could have competed a larger airplane, an airframe of the Boeing 777, and didn't, essentially because they understood that this was a satisfactory size component to deliver.
It made sense when Boeing made that decision and when Air Force led them to that decision, because when you look at the loading, the range of loading and what it has done historically, the Boeing 767 is a perfect fit. If you look at the offloading potential, the Boeing 767 is significantly greater than the average offloading in any of either the Vietnam, the Iraqi Freedom or the Southwest Asia conflicts.
So we are concerned that this decision of this deciding bigger was better was, A, not fair to a bidder, Boeing, which was not told that that apparently was now the Air Force's brand new criteria; B, exposes American taxpayers to greater risk with an uncertain contractor, with an uncertain plan in multiple locations; C, causes significant loss of jobs; and, D, violates international law, or at least awards folks who are receiving illegal subsidies violating international law.
This is not a good thing for the American warfighter, the American taxpayer or the American worker, and that is why we are here tonight suggesting that this contract has to be redone one way or another, and we are going to be talking about ways to do that.
And I hope we don't have to vote. I hope this protest is successful. But we will be looking at the
right ways for Congress to exercise the will of the American people through the appropriation or authorization process. And the reason we intend to do that is that we think there were several mistakes made in this contract that essentially resulted in the Air Force selecting a larger, more expensive, and more operationally limited tanker, despite the fact that the domestic Boeing tanker met the requirements of the Air Force.
So, we intend to go forward. We hope that our colleagues will join us in this effort. It is the right thing to do. It may take some time to do, we regret that, but America deserves this and deserves better than what happened here.
I want to thank Mr. Tiahrt and Mr. Loebsack.
Madam Speaker, we yield back the balance of our time.