Published: March 12, 2008 01:09 am            

Hundreds of state jobs hinge on Air Force deal

Boeing protests contract awarded to European firm, Northrop Grumman

CHARLESTON — Hundreds of new jobs in West Virginia are riding on the outcome of Boeing Co.’s protest of a $35 billion contract the Air Force recently awarded to a European company.

Boeing, which is headquartered in Chicago, Ill., announced Monday it will formally protest a refueling tanker contract awarded Feb. 29 by the Air Force to the European Aeronautic Defence & Space Co., also known as EADS, which is based in Toulouse, France, and Northrop Grumman, based in Los Angeles.

Last October, Gov. Joe Manchin and Ralph Crosby Jr., chairman and chief executive officer of EADS North America, announced that if the EADS/Northrop team won the contract, the in-flight refueling systems would be built in Bridgeport, creating at least 100 high-paying jobs.

Crosby said it would be reasonable to estimate that the 100 direct jobs would lead to about 300 spin-off jobs throughout the state. He noted that Rio Tinto Alcan’s aluminum rolling mill in Ravenswood already produces aluminum body parts for EADS’ Airbus A330 wide-body, twin-engine passenger jet.

The tankers the EADS/Northrop team would sell to the Air Force are derived from the Airbus A330.

Boeing has not said how many jobs, if any, it might create in West Virginia if it were awarded the contract.

But Rio Tinto Alcan’s rolling mill in Ravenswood could also be a winner if Boeing emerges victorious. That’s because the mill is one of the few capable of making large aluminum body parts for aircraft.

In 2006, Alcan signed a multiyear agreement to produce aluminum parts at the mill for Boeing’s 787 Dreamliner. And in late 2005 Alcan signed a five-year contract to produce parts for Boeing’s 737 and 777 commercial airliners.

The tanker Boeing wants to sell the Air Force is an advanced derivative of the 767-200 Long Range Freighter. It would be produced at Boeing’s facilities in Everett, Wash., on the existing commercial line where more than 950 767s have been built.

Rio Tinto Alcan’s Ravenswood rolling mill employs about 1,200 workers, making it Jackson County’s largest private employer. The mill buys most of the aluminum produced by Century Aluminum’s big Ravenswood smelter next door. Century has 660 workers.

At least one other supplier in West Virginia — Goodrich Corp. — might gain if Boeing were to emerge victorious.

Goodrich has a plant in Monroe County that makes de-icers and a series of specialty heated products used in the aircraft, military and medical markets. The plant is the second-largest employer in Monroe County.

Goodrich made evacuation slides for Boeing and other aircraft manufacturers at a plant in Spencer until 2002. The company closed that plant following the airline industry downturn that followed the Sept. 11, 2001, terrorist attacks on the World Trade Center and the Pentagon.

Boeing’s official protest of the contract award to the EADS/Northrop team was to be filed Tuesday. That action puts the contract under review of the Government Accountability Office, which will have 100 days to issue a ruling. A protest could delay execution of the tanker contract by nearly a year, according to Loren Thompson, a defense analyst with the Lexington Institute, a think tank.

Air Force Secretary Michael Wynne, Air Force Chief of Staff T. Michael Moseley and Sue Payton, the Air Force’s assistant secretary for acquisition, are scheduled to testify this week on Capitol Hill, where rhetoric and furor have accompanied the high-stakes deal. The backlash has been led by lawmakers from Washington, Kansas and other states that would have gained jobs had Boeing won.

Several West Virginians also have expressed dismay with the Air Force’s decision.

Hershel “Woody” Williams, the state’s only living Medal of Honor recipient, wrote the secretary of the Air Force last week to say, “As a Marine who served on Iwo Jima during World War II, it boils my blood every time I see an American flag labeled ‘Made in China.’ So I am even more dismayed that the Pentagon has chosen a foreign company to make military planes over a good American company.”

Greg Smith of Vienna, a retired Air Force lieutenant colonel, wrote in the Sunday Gazette-Mail, “Where is the outcry? Where are the pundits? Where are our senators and congressmen? Where are our political candidates? How can any of these entities chastise American companies for moving their manufacturing to foreign countries and stand silent about our government’s awarding a $40 billion dollar contract and thousands of jobs to an organization headquartered in France?”

Air Force officials have said the impact on American jobs was not one of their criteria for awarding the contract.

The EADS/Northrop team plans to perform its final assembly work in Mobile, Ala., although the underlying plane would mostly be built in Europe. It would also use General Electric Co. engines built in North Carolina and Ohio.

Northrop Grumman estimates building the tanker would produce 2,000 new jobs in Mobile and support 25,000 jobs at suppliers nationwide.

Boeing would have performed much of the tanker work in Everett, Wash., and Wichita, Kan., and used Pratt & Whitney engines built in Connecticut. The company said a win would have supported 44,000 new and existing jobs at Boeing and more than 300 suppliers in more than 40 states. But even if Boeing had won the deal, critical parts of its tankers would have come from other countries, including Japan and Italy.

The contract to replace 179 air-to-air refueling tankers is the first of three Air Force awards worth as much $100 billion to replace its entire fleet of nearly 600 tankers over the next 30 years.

Following a debriefing by Air Force officials Friday, Boeing questioned the fairness of the competition, citing “inconsistency in requirements, cost factors and treatment of our commercial data.”

The Chicago-based aerospace company “found serious flaws in the process that we believe warrant appeal,” Boeing’s chairman and chief executive, Jim McNerney, said in a statement.

The company argued that the Air Force changed its method for evaluating the two tankers even after issuing a request for proposals. These changes allowed a larger tanker to be competitive even though the Air Force originally had called for a medium-size plane. Air Force officials have indicated that the larger size of the tanker offered by the EADS/Northrop team helped tip the balance in its favor.

“We didn’t think they wanted a bigger plane,” Jim Albaugh, head of Boeing’s Integrated Defense Systems unit, said last week. Albaugh said this is why Boeing based its offering on Boeing’s 767, noting that “we were discouraged from offering the 777,” a bigger aircraft that would have been more comparable to the winning bid.

The Air Force selection of the EADS/Northrop team came as a major surprise. Boeing has been supplying refueling tankers to the Air Force for nearly 50 years.

The Associated Press contributed to this report.

        

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