Posted on 07/01/2008 10:59:57 AM PDT by Perdogg
Boeing Co., the second-largest U.S. defence contractor, will pay a $3-million fine for exceeding the value limits of imported parts used to build military aircraft.
Boeing's own audit found it had imported more than what was allowed under manufacturing licenses, spokesman Tim Neale said today. The license agreements cover the C-17 transport plane, the Apache attack and Chinook transport helicopters and F/A-18 fighter plane
(Excerpt) Read more at canada.com ...
Just out of curiosity, do we even produce any of our own military equipment anymore?
If Boeing saved more than $3 Million by exceeding the limit on imported parts then it was a good business decision.
If the government really wants to be protectionist they will have to do better than a small fine.
$3 million is nothing to them. they probably decided it was cheaper to pay the fine than buy American.
“If the government really wants to be protectionist they will have to do better than a small fine.”
Agree with the fine part. How is buying parts for military items in America a protectionist behavior? Seems like common sense to me.
“If the government really wants to be protectionist they will have to do better than a small fine.”
Agree with the fine part. How is buying parts for military items in America a protectionist behavior? Seems like common sense to me.
But we are supposed to bend over backwards for Boeing on the tanker deal because Boeing is “made in America”.
"Hey, we made a little mistake. We'll knock off 10% of the next bird down the line and call it even, and even throw in the undercoating and a full tank of gas just for you."
Yep.
Boeing good.
Northrop bad.
Boeing has been gorging at the government trough forever and they act like it.
Boeing was stupid - they should import the whole airplane, like Northup-Grumman did with the EADS tanker, rather than just some parts.
Bolts marked hardened aren't, for instance. QC isn't up to snuff either.
Boeing good.
Northrop good.
EADS bad.
And that tanker is going to be American built if Boeing gets the contract?
You're entitled to your skepticism. And we do need to keep Boeing's feet to the fire. Just don't switch it off when you are comparing to EADs however.
The Boeing internal audit, if done by EADs for itself, would never have shown any excess importing. They have proven to be spectacularly slippery with the numbers.
From their jobs claims back in 2001, on up to the current brouhaha.
Note their claim that in the Tanker contract they were claiming 58% U.S. content...but the U.S. manager of the NG/EADs bid admitted in Congressional testimony that the monies were going to be split 50-50 between the two entities.
Take a tour of Harley Davidson sometime. You'll see row after row of Japanese machine tools. Buying American is only for their customers.
I did mean to imply that protectionism is necessarily a bad thing. I do not consider it a “dirty” word at all. Sometimes it is necessary in order to protect our national interests.
Other countries (China, I’m looking in your direction) engage in this behavior on a very broad scale in order to protect their own economies.
Yes.
This is particularly true of items from China and India.
Sorry... I did NOT mean... etc.
Sheesh, I’m having some trouble today.
And just what info do you think Northrop would be sharing for the construction of a tanker?
You can’t translate the money split to content.Boeing just wants a monopoly so they can keep screwing the public for tax dollars.
It wouldn’t surprise me if this is a legacy recently uncovered, left
over from the Phil Condit / Mike Sears era.
You will note what I said about cargo aircraft and other common vehicles.
Yes you can. It's a good substantive starting point before the EADs spin machine can try to excuse and rationalize it. Anyways, it puts the burden of proof on them.
Boeing just wants a monopoly so they can keep screwing the public for tax dollars.
Uh, last I checked it was EADs and Airbus which are totally supported by whatever subsidies they need from their component governments.
As the former French Prime Minister said:
"We will give them whatever they need to defeat Boeing."Not compete. But Defeat as in destroy.
You okay with that?
Anyways the point about protectionism is accentuated by the hypocrisy of the EADs people. Their double-standard is so manifest, it is staggering. I like what was in the Tanker War Blog on the subject yesterday:
It never ceases to amaze us here at Tanker War Blog how the KC-30 team was able to brand themselves as the defenders of the free-market; while at the same time, labeling all Boeing supporters rank protectionists. Though, we sense that this is about to change.A case in point is an op-ed that ran in Sunday's Washington Post titled "5 Myths About the Death Of the American Factory". Myth 2 was especially interesting:
U.S. manufacturers can save themselves by investing in innovation.Okay, but how much are you going to invest? U.S. private-sector companies can't put as much money into technology and research and development as foreign governments do to build up their sectors. As the chief executive of a technology firm with whom I've worked for many years says, "We're the best company in the world, but we can't compete with foreign governments." Consider Airbus. The European Union has put more than $15 billion into building this aircraft company from the ground up. Whatever you may think about the recent U.S. Air Force decision to buy tankers from Airbus rather than Boeing, one thing is clear: Through its subsidies, the E.U. has managed to build a highly competitive aircraft industry. South Korea has put more than $12 billion into its semiconductor industry to similar effect, severely harming the U.S. semiconductor manufacturing base.
At Tanker War Blog we continue to contend that the US government has a duty to balance the promotion of free trade with enforcement of free trade. Competition works great, if the all participants play by the rules of the free market, and if all countries agree to hold free and fair competitions.
If US defense companies are not allowed to compete at Away games in certain EU counties, then our government should ban those countries' competitors from Home games here in the US. Such action is not protectionism; it is enforcement of free market rules.
I agree. Time to enforce free markets...and stop the blind eye crapola.
Actually, not that big a deal, as there are literally thousands and thousands of suppliers, providing tens of millions of dollars of support, equipment and supplies.
The F-15, for example, has over 5,000 suppliers.
That said, these suppliers go through a vetting process and the supplier management people track the status of these suppliers constantly.
This is a challenge, as some suppliers, second and third tier, are not as transparent as they should be, therefore, because the prime is ultimately responsible in the eyes of the government, the prime gets hit with the fine.
Expect to see fall-out lawsuites from Boeing to a few suppliers that broke THEIR contract that resulted in the fine.
I won’t even dignify this with an answer. HOwever, I support Northrop Grumman (an american company) who is the Prime in this contract, not EADS.
technically they are a SUB Contractor as they do not build the airplane itself.
Your wrong there. They are the prime they make the program decisions. They are responsible for the contract and delivery of the end item. They could have bought a boeing airframe and would still be the prime on the contract. The aircraft will have Northrop Grumman’s name on the side also. Not EADS. Just like Boeing puts their name on the side of the F-15 and F-18. They didn’t design or build the aircraft. They bought McDonnel Douglass.
Your wrong there. They are the prime they make the program decisions. They are responsible for the contract and delivery of the end item. They could have bought a boeing airframe and would still be the prime on the contract. The aircraft will have Northrop Grumman’s name on the side also. Not EADS. Just like Boeing puts their name on the side of the F-15 and F-18. They didn’t design or build the aircraft. They bought McDonnel Douglass.
Yes Boeing Bought MD. so they can put there name on the F-15’s and F-18’s now that they own them. NG is not the builder of the A330, EADS is and they are also in this contract but More money is going to go to EADS there for EADS is the prime and NG is a SUB. The airplanes come from France and assembled in France for now. When they do build the plant ( NG) the aircraft will be built in assemblies and shipped to NG for assembly. But still a EADS/AIRBUST product. Then they go to Germany for Cargo upgrade until a plant is built here, then it goes for sub assembly by NG if an when they build a plant. So how can NG be the prime contractor, they are not owned by EADS or vice versa. But its not a big deal as I see it its not going to be the next Air Force tanker because The NG/EADS Tanker CANNOT DO WHAT IT IS SUPPOSE TO DO with in Air Force specs and requirements set forth in the contract.
In other words...YOU CAN'T.
NG MAKES NO COMMERCIAL TRANSPORTS. And is now a dubious company. Not just dubiously American, but the fact that they were revealed to have been aiding and abetting outright lies. Look at the spin on the survivability issues which have now been vindicated by the GAO.
So the issue remains what EADs is up to, I.e.,
Not compete. But Defeat as in destroy.You okay with that?
You mean they try to handle the PR.
Technically NG purports to be prime. But it is manifestly OBVIOUS who is the real prime and who is really calling the shots. EADs didn't even leave the PR up to them. They paid the bribes, er, consulting fees, lobbyists, advance studies, made political deals, and placed SEVEN, count em, SEVEN, EADS EMPLOYEES/LOBBYISTs on McCain's campaign and policy staff, and who knows how much ELSE they did?
We may never know.
Clearly, Congress knows when it is being played on an issue as to who is prime.
E.g., did you see this letter which the 7th-term GOP Congressman from Wichita Kansas sent the USAF Sec.? Note how he cuts through the fog and gets to the essential FACTS:
The Honorable Michael W. Wynne Secretary of the Air Force1670 Air Force Pentagon Washington, DC 20330-1670
Dear Mr. Secretary,
It has come to my attention that the primary supplier of the Air Force’s $35 billion KC-X Tanker competition, European Aeronautic Defence and Space Company (EADS), has engaged in many serious, illegal activities. These proven illegal activities and other serious allegations bring into question whether EADS is an appropriate supplier to the United States Air Force.
A recent New York Times article reports that Autorité des Marchés Financiers, the French Financial Market Regulator, filed a formal complaint and requested a criminal investigation of EADS and more than a dozen current and former executives. This action is based on insider trader violations.
The April 2007 Center for Security Policy Report “EADS is Welcome to Compete for US Defense Contracts-But First it Must Clean Up Its Act” highlights several serious questions for defense policymakers regarding EADS suitability for contract award. I have attached this report and the New York Times article for your review.
In addition to these open source documents, the Department of Defense has been briefed by other elements of the United States Government on other EADS violations. Unfortunately, the Air Force has turned a blind eye to very obvious and serious illegal activities of this major contractor.
Although the evidence of EADS’ corruption is overwhelming, the Department of Defense and the Air Force waives the Foreign Corrupt Practices Act and Cost Accounting Standards for foreign competitors. The American public may never know the true extent of illegal activities that the chosen KC-X Tanker manufacturer has committed. This represents a serious concern to our national security.
Mr. Secretary, please detail:
1) Why are foreign corporations, such as EADS, exempt from Foreign Corrupt Practices Act and Cost Accounting Standards when bidding for United States Air Force contracts, while domestic suppliers are not exempt?2) Why is every defense supplier, both foreign and domestic, not held to the same standards?
3) Why were EADS’ illegal activities not considered as part of the KC-X tanker competition?
I look forward to your prompt reply.
Sincerely,
Todd Tiahrt Member of Congress
"Fighting the Good Fight."
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