RichardAboulafia.com 

:: March 2010 Letter ::

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Dear Fellow KC-X Enthusiasts,

About thirty years ago my application to Georgetown University’s School of Foreign Service was rejected. They had good reasons to do this. For one, I was a mediocre high school student. But they also might have been prescient, anticipating that I would grow up and one day call a senior European political figure a blithering idiot, proving that I would make a poor diplomat. They were right. Let me state unequivocally that Pierre Lellouche, France’s European Affairs Minister, is a blithering idiot. There. I said it.

In the aftermath of Northrop Grumman’s KC-X no-bid decision, Lellouche told Reuters that the KC-X program “has gone beyond acceptable,” and that “this matter is in no way finished.” Lellouche also termed the situation “an affront for France.” Lellouche isn’t alone in his sinister-sounding, vengeance-will-be-ours rhetoric. French Prime Minister Francois Fillon commented “I think that the attitude of the American government on the matter of the air tankers is a serious breach of the rules, which are those of fair competition between our economies.” General Christian Baptiste of the French MoD said, “For the Defense Ministry, it is difficult to understand how an aircraft that was declared in 2008 to respond perfectly to American needs no longer meets these needs after a modification of the tender.” Worse, this toxic rubbish is percolating up to President Sarkozy, and may cross the Channel to UK Prime Minister Gordon Brown.

A little memory refresher. A few years ago, Northrop and EADS went after KC-X by pursuing a Southern Republican political strategy. They put work in Republican states. They cultivated close relationships with Republican senators John McCain, Trent Lott, Jeff Sessions, and Richard Shelby. The latter two senators had an extra incentive: the KC-30 facility to be built in their state, Alabama. But all of them went to bat heavily for the KC-30, a deciding factor in the KC-30’s original 2008 KC-X victory. This victory was followed by a GAO decision validating Boeing’s protest. One implication of the GAO ruling was that political interference had shifted the contract in Northrop/EADS’s favor. That’s right. The political party that gave us Freedom Fries also promoted a European tanker design.

But in November 2008, the Republicans lost big, and Democrats are in charge of the White House, Senate, and House of Representatives. Those are the guys who make the budget and the guys who sign the checks. It appears to be payback time. This major political shift, Général Baptiste, is what has changed since 2008. The second KC-X Request for Proposals (RfP) favors Boeing’s proposal in part because Boeing’s plane is almost entirely built in Democratic Party districts.

But the biggest political event that likely precipitated Northrop’s decision was the death of Jack Murtha. Head of the important House Defense Appropriations subcommittee, Murtha was a Democrat but he (and he alone) believed strongly in a split KC-X buy. His likely replacement by the hyper-pro-Boeing Norm Dicks pretty much destroyed any hope Northrop had. The KC-30 still has Southern Republican support. Senator Shelby, in fact, held up more than 80 federal appointments in an unsuccessful effort to change the KC-X RfP. But the Alabama delegation no longer has any cards to play.

Takeaway point for European politicians: politics did play a role in the KC-X process, but it was US party politics. Both Boeing and Northrop/EADS offered good tankers. A key factor that tipped the RfP towards Boeing was that the people in charge of KC-X made a rational calculation: a Boeing tanker, supported by Democrats, would face fewer political challenges and would have a better chance of securing funding, than Northrop/EADS’s Republican-backed tanker. If the Republicans were in charge instead of the Democrats, EADS would have an excellent chance. EADS simply backed the wrong horse. That’s not protectionism. That’s US party politics.

The thing about Lellouche is that he is an educated man (but still an idiot). He knows the US political system. He knows that party politics were a key factor in the tanker decision. One would hope that MM Fillon et Baptiste know this too. So, what are these paranoid demagogues thinking? Accusations of protectionism typically serve one purpose: to justify “retaliatory” protectionism. Look for renewed pressure on EU countries to buy European weapons systems and not US ones. If nothing else, Lellouche and friends will use this to generate political support for the A400M bailout. France’s Cour de Comptes (their GAO) recently termed this program an example of “economic patriotism.”

These French politicos should also realize that other factors have changed since 2008. What else killed the Northrop/EADS KC-X bid? In 2008, EADS had the ability to offer a heavy discount on their plane. Given losses on the A380 and A400M since then, they no longer have that flexibility. Meanwhile, Northrop Grumman has a new CEO, Wes Bush. He is taking a completely new view of the company’s future, and has no skin in the KC-X game.

And now, a few words in defense of our European pals. KC-X did not make the US look good. SecDef Gates and company produced an RfP that for political reasons, cost reasons, or whatever reasons, was basically an RfBP (Request for a Boeing Proposal). Even if partisan politics played a large role in determining the likely Boeing victory, this still impacts Europe’s perception of fairness in the US defense market. It certainly didn’t help that Boeing partisans, particularly Congressmen Dicks and Todd Tiahrt, energetically pushed for an “American tanker” and argued that a “foreign plane” should lose. In fact, they’ve kind of painted the US into a corner with nationalism that’s every bit as vitriolic as those French politicians’.

Before you feel any warmth and fuzziness towards those French officials, note that their comments are fine examples of the pot calling the kettle black. Is there any way, under any possible circumstances, that the French Air Force would be allowed to consider a Boeing tanker? Has anyone even asked Lellouche and Fillon that highly germane question? Fillon’s “serious breach of the rules” refers to “rules” that are only applied to the US, not France.

What can the US do now? The best aspect of the US is its openness. The French military can’t look at a foreign system if a domestic one is available to do the job. The US military can. Openness helps make a military great. The US, in short, can and should look closely at evaluating and buying more European products, including Airbus jets. The UH-72 and C-235 are successful US procurement programs involving European systems. There is every reason to resurrect the US 101 as a strong candidate for the presidential helicopter. In the case of the UH-72 and US 101, there were domestic alternatives, but the services were free to choose what they wanted. If hypocritical fools hobble French military procurement, the US can do better.

Better still, the USAF should accelerate the next phase of tanker procurement, KC-Y. In a few years the KC-30 will have proven itself in service with at least four different air forces. Airbus jets should be given full consideration for KC-Y. Hopefully we won’t see the same level of noxious politics this time around. A quicker KC-Y process would help solve the long-term USAF tanker recapitalization problem. It would keep Boeing competitive on KC-X prices. And it would soothe some of the transatlantic tensions produced by this KC-X nightmare.

So, I may not be a diplomat, but at least I can promote cross-border shopping. And I can put out aircraft reports. WMCAB updates this month cover all Airbus jetliners and the A400M, Boeing’s 787, all the Gulfstreams, Hawker’s Hawker 400, Sikorsky’s S-76, Eurocopter Dauphin, and Aermacchi’s M-346. Enjoy the spring, despite the pollen and the political fallout.

Yours, ‘Til A French AF KC-767 Refuels A USN Rafale,
Richard Aboulafia
 

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