The Boeing tanker slapdown
The state's congressional delegation and others are shocked that we're shipping defense jobs overseas to Airbus. But isn't that the free trade they're always touting?
Back in 2002, when Boeing was in the process of blowing off its hometown to move to Chicago, Boeing Commercial Airplanes president and CEO Alan Mulally was quoted in The Seattle Times: "Nobody can guarantee jobs and security in market-based economies." The Pentagon's decision to grant a $40 billion aerial-refueling tanker contract to a consortium other than Boeing, including, adding insult to injury, the parent of Airbus, puts an exclamation point on that statement with an "ouch."
Boeing has been strong-arming workers, suppliers and Washington taxpayers, using the big stick of globalization and free markets, for years. Now a former ally, the U.S. Defense Department, has hit back. If globalization is good, then why not buy military gear from overseas companies? Remaining loyal to U.S. companies is anti-free market, right? It's for suckers in the new global economy.
Our congressional delegation is shocked at this turn of events. In a joint statement, they said: "We are outraged that this decision taps European Airbus and its foreign workers to provide a tanker to our American military. This is a blow to the American aerospace industry, American workers and America's men and women in uniform." This the same delegation that is gaga over free trade. This is the delegation that – along with the state's governors and legislative leadership – has consistently rewarded Boeing with loyalty and benefits while the company has been strip-mining local goodwill, outsourcing jobs, and demanding to be rewarded at every turn.
Globalization goes wrong and now they wave the flag?
A few years ago, Boeing said remaining local was foolish and moved to Chicago. Boeing beat up its unions and shipped jobs to Japan and China. It demanded billions in benefits from state taxpayers for Washington to have the privilege of keeping assembly of the 787 Dreamliner in Everett. At the time, Boeing CEO Phil Condit said, essentially, they were no longer a local aircraft manufacturing company: "We are an assembler, an integrator." Boeing planes, in essence, were no longer made in Washington, not even America, really. We just snap them together. How's that for a domestic aerospace industry?
It's not clear why Boeing didn't get the tanker contract: Maybe the process was flawed, maybe Airbus makes better planes. But the company has a long track record of fouling the nest, including being caught corrupting the previous tanker procurement process. Republican Sen. John McCain of Arizona, now running for president, in what might have been his finest hour, helped shoot the deal down, calling it "one of the great rip-offs in American history." A rip-off supported by our delegation of enablers, by the way. The Pentagon has said that scandal wasn't a factor, but if the process hadn't been corrupt in the first place, and if the previous deal for the taxpayers had been fair, maybe it wouldn't have come to this.
The Boeing workers who face a questionable future are right to complain loudly. It is a blow, and they've felt many. The unions have fought outsourcing, the unions have seen jobs lost, the union members have felt the pinch and lived under a cloud of whether Boeing will stay with them. Already, the company has said that it might want more tax-breaks and benefits before considering making its next plane here. They still might move to some job-hungry southern state if they get the right deal. But if the workers are going to be angry at the Pentagon, they ought to save a little rage for their bosses and a political establishment that has been cheerleading trade practices that are coming back to bite us.
I am not a believer in unfettered "free" trade, because it isn't free for Americans. I think protection ought to go both ways. I think companies like Boeing owe the communities they live in more loyalty and more commitment than the pay they put into people's pockets. Workers earn those checks, and the trickle down taxes are part of the price of citizenship. Globalized "free" trade is a scheme to have it both ways: none of the costs of loyalty, but all the benefits of making fearful communities pay dearly for the crumbs you leave them.
I agree that keeping manufacturing jobs and capacity in America should be a top priority – but such claims ring awfully hollow coming from the mouths of politicians who won't hold Boeing accountable and continue to enable its bad behavior.
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Comments:
Posted Mon, Mar 3, 10:08 a.m. inappropriate
They deserve each other: Really it's just hypocricy on the part of the political team we have in the state. But that is the difficulty they have in telling people what they want to hear. The state needs to hear our delegation tout free trade when it comes to ports and agriculture, but blast it as un-American when it comes to manufacturing. It is easier for workers and employers in one industry to pool resources to influence policy than it is for the very diverse, but much larger voting block of consumers to. It is consumers who benefit the most, in aggregate, from free trade, but it is consumers who are least able to unify and promote it as one cohesive group.
I don't understand what you mean when you say we can't have it both ways. Why should I have to pay more for a TV, car or airplane from an American manufacturer who doesn't have to compete with foreign manufacturers. It may save a few inefficient jobs here, but I as a consumer am out more of my money while getting a lesser product. American firms should be allowed to compete anywhere in the world for business, just as foreign firms should be allowed to compete here. I myself take a unilateral view of free trade. We should knock down all of our trade barriers regardless of what other countries do. If they have trade barriers it is only hurting their consumers, whereas our lack of barriers only helps ours. This is entirely politically unfeasible, so we promote multi-lateral trade deals. I've been disheartened with both of our Democratic candidates on that point, but that's for another argument.
As for the tanker deal, Boeing was just ill-prepared and resting on their laurels with a plane 30 years old in design. The A330 is in fact a better plane but with different mission capabilities than what a 767 can provide. Boeing will do well by eliminating that line and expanding production of either the 787 or 777. In an industry that can only support two manufacturers it is also best that in order to promote competition they are actually able to compete on an equal footing. This award speaks to that and is therefore good.
Posted Mon, Mar 3, 12:32 p.m. inappropriate
Protectionism doesn't work: The perfect way to ensure Boeing's ultimate failure is to coddle it. I don't think Boeing took the bidding process seriously. Why didn't they propose a modified 777? Well, there are plenty of orders for 777s, so it would be easier use the 767 airframe. Nobody's buying those anymore. Why? Well, there are newer, more efficient competing designs... uh-oh, competition. Maybe Boeing's competitor took the bidding process a little more seriously.
Posted Wed, Mar 5, 12:37 p.m. inappropriate
free trade for whom?: Free trade is a misnomer - it is a very expensive proposition for blue collar middle class workers, for the environment, for national security and the incredible use of fossil fuels to transport stuff around the world that can be made locally. It enriches a few people at the expense of many - it is trickle up economics at it's worst. Boeing is the prime case with all the local and federal subsidies that have gone to the company over the decades. I believe our trade deficits are topping a trillion and more - nice legacy for young Americans. Lou Dobbs is one of the other few voices in the media that has called foul over Boeing's behavior and our reckless trade policy.
Trade is important but it must be trade with standards, not the massive deregulation of unfettered, radical free trade. What is interesting is that all the major presidential contenders are strong supporters of free trade although both Clinton and Obama given some strategic lip service to criticizing NAFTA. Only John Edwards was consistent in his criticism of free trade and it is what brought him great success in 2004 and continued on in his platform in 2008.