Elections results and the KC-X

The election results could have a major affect on the KC-X tanker competition.

The headlines are:

  • The Republican takeover of the House means Norm Dicks (D-Boeing/WA) loses is chairmanship of the House Appropriations subcommittee on defense, a position from which he could conceivably block any funding of a USAF award of the contract to EADS;
  • Todd Tiahrt (R-Boeing/KS) lost his primary bid to move over to the US Senate, so he’s out of Congress altogether. This is a key Boeing ally.
  • Patty Murray (D-Boeing/WA) widened her razor-thin lead in Washington State over Dino Rossi (R). Although Rossi fumbled a key question about the tanker competition during the race, there really was never any doubt that Rossi would support Boeing’s bid. But if Murray wins her fourth term, and the Democrats retain control of the Senate, both of which now appear likely, Boeing retains a powerful voice in the Senate to block any EADS contract;
  • Norm Dicks’ successor is a bit up-in-the-air; the two ranking Republicans have a tenure that under House GOP caucus rules would require a waiver; the third ranking Republican is from Kentucky; none of the three have any particular partisan leanings in the tanker competition;
  • Sam Brownback (R-Boeing/KS), another influential and vocal Boeing backer, was elected governor of Kansas and will be leaving the Senate; and
  • With Republicans likely to end up with 49 seats in the Senate (depending on whether Independent Lisa Murkowski gets elected in Alaska and caucuses with Republicans, given the GOP abandoned her for the Tea Party candidate), pro-EADS Sens. Shelby and Sessions will have more power to block a contract to Boeing than they might have had when the Democrats effectively had 60 seats.

The USAF has said it expects to award a contract this fall (technically, through December 20) but it still hasn’t notified Boeing and EADS of the date to submit the best and final offers; Evaluation Notices (ie, questions-and-answers) are still being issued and worked through. We understand a decision could well slip to the first quarter.

37 Comments on “Elections results and the KC-X

  1. I am pretty confident that politics will play no part in who gets the contract awarded. USAF has been burned to badly to let anyone meddle there. (they might feel less pressure to go for Boeing if anything)

    The aftermath now is a different beast. Here the loss of key Boeing supporters will greatly benefit EADS as it will be less likely that they will get blocked. (Norm Dicks was the biggest potential spoiler there) On the other hand it makes no difference if Boeing gets the award as there is no way they’d block Boeing no matter how many key supporters Boeing lost.

      • Scott,

        IMHO, both competitors offerings are nothing short of superb… Both aircraft will meet and exceed specifications. So, considering all the other factors involved, i.e. Industrial base issues, economic issues and yes, political considerations, I’m not surprised it is coming down to this. In the end, the U.S.A.F. will pick the path of least resistance, since both aircraft will be state of the art in terms of aerial refueling, cargo.
        Even more then in 2008, this one is Boeing’s to lose. But this time, I don’t think the Administration will make the same mistakes.

  2. Norm Dicks would become the Ranking Member on the House Appropriations subcommittee on defense, still a powerful position. This House committee will still have the biggest voice in Congress of funding or not funding the USAF KC-X selection. Senators Shelby and Sessions are still in the minority party in the Senate.

    The GOP ran on two platforms, one to oppose the President’s agenda, and the other to improve the economy and put Americans back to work. EADS claims their bid for the KC-X will bring some 48,000 jobs to the US, Boeing claims to bring in 50,000 American jobs. That will help Congress decide, but more importantly will be the price, including LCC and infaststructure improvement costs. If EADS won the contract and tried some of the economic scams they pulled on the EU over the A-400, that will kill any funding. Congress will look at both EADS’s and Boeing’s track records in recent military contracts and see how each handled costs overruns.

    The GOP cannot afford to play games with the fedreral budget, they know the American voters are watching them as we did with the Democrats in power.

    • We never have believed either job claim, noting long before that this must include the janitors emptying the waste basket.

      When 767 production was at its peak in the 1980s/90s, with a much higher production rate than that proposed for the KC-767, Boeing claimed 22,000 jobs; Boeing claimed 25,000 jobs for the C-17, which produces at about the same rate proposed for the KC-767.

      We have never understood how EADS (and Northrop before it) could claim more jobs (which at one time it did) than Boeing or nearly the same number today when US content for the KC-45 is 60% vs 85% for the KC-767.

      Now, what EADS has NOT detailed is the number of jobs that would also be associated with building the A330-200F in Mobile, which are entirely new jobs to the USA. If you combine these new jobs with those 48,000 claimed, then you would have more US new jobs than Boeing–assuming one can take any of these figures from both sides at face value.

      • Wasn’t one of Boeing’s major concerns regarding the A330Tanker being awarded that Airbus as you mentioned would be able to start building A330F’s in the U.S.ofA? Given how the U.S. Dollar is being debased currently, it could possibly help sales. That being said, if the product is good enough, it will sell regardless. Ownership costs as you know are a bit secondary (obviously not completely) when it comes to other aspects of choosing a particular plane.

        While the A330F is a fine freighter and will probably sell well in the marketplace, I haven’t seen too many sales of the A330F to be too “threatening” right now. The B777 and B748F will be the ones (at least right now )which have the sales momentum.

  3. Party affiliation is irrelevant with respect to the Washington state or Kansas delegations. They will be fore square behind the Boeing product. I opined several months back that the next Congress, while likely to be Republican, would be much more populist than the current one. I think we’re seeing evidence of that already. As for shenanigans by Sessions or Shelby, either party can block a contract in the Senate given the new numbers.

    • You’re absolutely correct Aurora. What many here seem to gloss over is Boeing’s very shrewd decision to build 787s in South Carolina, a very Red state and one who’s Congressional members are firmly in Boeing’s corner. The South Carolina plant not only gave Boeing flexibility with labor issues, but has effectively neutralized EADS'”Southern” clout.

    • You people need to look at the bigger picture, SC was step two for Big B in getting out of building and into assembling AC. Of course some would say Wichita was step two but does it really matter? Take a look at Long Beach as it moves to Oklahoma, more moves and diversification to come as they become assemblers, not builders, there is a difference. If you don’t understand the concept, well what can I say?

      • Seems to me that we are looking at the “bigger picture”, ie the political ramifications of the newly elected Congress. All I read in your statements is the differences in building versus assembling. May I suggest you read the entirety of ones comments, not just the stuff you want to quibble with? That way, the full context of someones thoughts are understood.

      • It’s not quibbling; the big picture is the Tanker is only a small part of their business and 179+ AC fixed price is very small. Congress wants to talk about everything except what is really going on and with half of the hard-line supporter’s no longer in office or chairing the appropriation committee; this subject may not even come up.

  4. regarding the JOBS game. There is no question the numbers are inflated, but letsw not forget that the method of counting includes the ‘ trickle” down game. For every ‘ hands on or pencil on ” job at BA or EADS, there are suppliers, etc. For every direct or indirect job , there are the restruant jobs, the janitor jobs, the auto saleperson jobs, the tax collector jobs, etd ad naseaum. A ratio of direct to indirect of 3 to 7 to one would probably be in the range used to count jobs created or saved. Thus the numbers floated can really never be proved or disproved, much like the famous ‘ shovel ready ‘ jobs and ‘jobs saved ” in the news prior to the elections.

    lies, damm lies, and job figures should be the latest version of the old cliche.

  5. +++++ BREAKING NEWS +++++

    Paris, Nov. 4. 2010
    Today, Chinese President Hu Jintao and French
    President Nicolas Sarkozy have signed a contract on a
    total of 102 Airbus SAS planes, worth $14 billion at
    market prices.
    China Eastern Airline Co., China Southern Airlines Co.,
    Air China and China Aviation Supplies Holding Co.
    bought a total of

    50 units Airbus A320
    42 units Airbus A330
    10 units Airbus A350

    Half of the A320s will be assembled in China, while
    all the A330s will be built and assembled in Europe.

    China Southern Airlines is still planning to go
    ahead with an order of Airbus A380 double-decker jets,
    regardless of Qantas grounding its fleet for
    inspections following an emergency landing of one of
    its A380 at Changi airport, Singapore.
    One of the four engines of the aircraft exploded shortly
    after take-off, due to a broken turbine blade, which bent
    and cut off more blades until the rear part of that engine
    exploded. The aircraft safely returned back to the airport
    on three engines and nobody was hurt in the incident.

      • I would say that it has little or nothing, however I wonder if the Chinese are interested in some new tankers, Hum?

    • Despite the fact that the QF story is utterly irrelevant to the topic, I will note that QF’s chairman, Mr. Joyce, said today that the cause of the Trent 900 exploding may be a “design issue”. Emirates and Air France must be feeling a little smug today, huh?

  6. What do you think, Scott? Did Rossi’s earlier gaffe on the tanker cause him problems in King County? It looks like he got hammered there.

    • Rossi certainly did worse in King County than in his two previous bids for governor. But we’re not sure the tanker gaffe had anything to do with it. The unions were going to support and endorse Murray, not Rossi, anyway, and that’s exactly what they did. Rossi has a history of starting strong and fading in the stretch. We told one of our contacts at EADS North American in the days prior to the election Murray was going to win because of the fade-in-the-stretch thing. On election night, as soon as we saw Rossi got only 35% of the King County vote, we knew he was going to lose–he had to come out of KC on election night with more than 40%, or he was toast. Burnt to a crisp, he was.

      • Now the challenge is to keep Washington State’s 11 electoral votes for Obama. The Dems were pounded in the heartland and Republicans now control Ohio, Pennsylvania, and (oh no) Florida.

  7. I hate to say it but the left coast states of CA, OR, and WA probably already have their Electoral votes cast for Obama.

    • Even if they give the tanker to EADS and Boeing shuts down the 767 line causing layoffs? How well would that go down in King County with the IAM?

      I posit that it would put WA state “in play” for the Republicans. Can Obama take that chance, given the disastrous results of the mid-term elections?

      • . . .I posit that it would put WA state “in play” for the Republicans. Can Obama take that chance, given the disastrous results of the mid-term elections? . .
        +++
        The chance of an R from the soviet of washington being elected to the Senate in 2012 even if contract goes to EADS is significantly less than San Francisco dumping Pelosi or Calif dumping any D.

      • Not referring to the Senate, Don S, but the state’s electoral votes. Can Obama take them for granted if they piss of the IAM?

  8. Future of Airbus A400M Secured
    ——————————

    by Tim Hepher, Toulouse, Nov 5, 2010

    European buyer nations reached a final agreement on Thursday on a 3.5 billion euro bailout to rescue the troubled Airbus A400M military transporter, development of which was suffering cost overruns of 7.6 billion euro.

    The agreement lifts a two-year cloud over the future of Europe’s largest defence project and some 10,000 jobs threatened by delays and cost overruns.

    Rescue of the program safes Europe from staying dependent in the military transporter area on US companies Boeing and Lockheed Martin in the 21st century.

    Buyer states will take a total of 170 planes instead of 180 planned when the project was launched. Britain will cut its order by three planes to 22 and Germany by seven to 53.

    Source:
    http://www.reuters.com/article/idUSLDE6A41R320101105

  9. The D’s still control the state- by the time they finish gerrymandering the districts, the electoral vote will be 99.44 percent D – forever !

    • So you are saying that the Obama administration can give the tanker contract to airbus and still be assured of the 11 electoral votes from Wa state?

      • I’m saying that WA state will vote D no matter what. Their current voting record is in the same league as California- Democrat forever. NO matter what the reason. King county controls the state. R’s are considered the devils spawn- adn the unions are not exactly D strongholds.

        Check the stories about Moxie media in this state.

  10. Boeing does not need the tanker and can afford to lose the contract.
    Lots of construction at Everett site right now for Lean 767 line.
    If tanker contract is not won, watch Lean 767 line become an additional 787 line.
    Boeing would not be spending money on a capital improvement if they did not have a use for it.
    This contract is going to cause problems for who ever wins it.
    So if Boeing loses tanker contract,it wins and can concentrate on developing new 777 and 737..:)

    • . .If tanker contract is not won, watch Lean 767 line become an additional 787 line. . .

      NOPE re 787 line – wingspan of 767 is too big to turn corner between buildings as it is so they are hacking a corner off one building to make a squeeze fit passage for lean 767 line. 787 wingspan would not fit- and line direction cannot be changed without major major major building rework, etc

      The hacking of a building corner has been in the news by Boeing for many months now , ,

      However, it might work for a new 737 ??

  11. If a company wants to bring a new product to the market quickly, you need a place to build the development aircraft, think about it.

  12. jay . . .If a company wants to bring a new product to the market quickly, you need a place to build the development aircraft, think about it. .
    +++
    For decades, commerical aircraft development models have been built on or near the same site and major tooling expected for production.

    For example on 707, 727, 737, 757, 767 and 777, the first plane assembled was on the same basic tooling used for production in the same building and by the same crew.

    Typically by the time the first plane flies, which is one of the first three or four built, there are about a half dozen planes in various stages of final assembly.

    So IF BA does not build the tanker, when the 767 line ends, it would be a near perfect place to produce initial models of 737-X.. expansion of lines for rate and derivative models of New 737-x would then be expected to be built or modified in other locations like renton . .

    • DON S – Thanks for the information, I appreciate the effort to educate the uninformed. However since I was a Level 5 Designer for many years with Big B, I have a fair idea as to how aircraft are developed, but thanks anyway.

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