The Air Force has hired Boeing to produce 18 next-generation aeriel refueling tankers. The contract, which is expected to support thousands of jobs, is the result of a decade-long process involving a lot of political pressure from lawmakers to bring those jobs to their home districts. Boeing is planning to build the tankers in Washington and Kansas; it won the contract over its competitor, EADS, which would have based production in Alabama.
The tankers will allow military aircraft to refuel in midair, extending their range of operation.
4 comments:
Boeing is a fantastic company. My father works for AA and I ride in their planes all the time. They are fantastic at their job. The Boeing airplanes are definitely incredible and I am not surprised the Air Force decided to choose them.
Interesting. This might help stimulate the economies of Everett, WA and Wichita, KS, but when will government cut back on military spending?
I'm not arguing that this was a bad deal—we are recovering from a massive recession, and any job opportunities would be welcomed. I'm also not saying that this deal wasn't necessary; for all I know, this could be a necessary purchase for the air force to protect our country from future threats.
However, it still remains that in terms of military spending, the United States outspends the rest of the world combined. I hear a lot of talk about cutting the deficit by reducing military spending, but is that tangibly coming to fruition?
This tanker deal has been going back and forth for multiple years. The first time around Boeing won, and EADS/Northrup appealed. Then EADS/Northrup won, which led to Boeing appealing. This tanker deal would have cost the government much, much less had the companies not being allowed to appeal. This just comes to show that this appeals process is very flawed. This project was originally due to start in 2006, but has dragged on and on. We are now "About the same place we’ve been since the fall of 2001. . ." This has wasted tax payer money and hurt the military in its ability to use the latest, most advanced form of in flight refueling. So, the big question is this going to continue to go on. I think so. The lobbying is way too powerful.
All of this waiting and waiting causes our military to fall behind and causing money to fall out the back end. There has been many, many cases of bribes and special interests that it just comes to show the system sometimes just does not work.
Some back history is that these tankers have been running for more than 50 years. It was originally designed as a variation on the 707, at the time the Air Force One as well. Many of these airplanes are in desperate need of repair and the range is limited, high maintenance costs, low fuel mileage, and danger to all our pilots. The chosen successor is still really old, 767 already running for 30 years. Is that really worth the 35 billion? Whereas the EADS version was little over 15. Unfair? Both companies promise lots of jobs, but one based in America other in France, differences? Not that much.
http://www.heraldnet.com/article/20110227/NEWS01/702279907
http://www.spokesman.com/blogs/spincontrol/2011/feb/27/tanker-sweepstakes-over-well-see/
This is a perfect example of how the government is trying to stimulate the economy. Instead of producing the tankers themselves, the government hires a private company. The project given to the company provides tons of employment opportunities for everyone. The action of the government in this contract is a good example in the spending area of the Circular Flow Model. Government spends money in the product market, Boeing, and receives products (18 tankers). The money from the contract flows to the businesses who make payments to the factor market, where households provide labor and capital.
After tracing the purchase of 18 planes from Boeing on the circular flow model, I wonder how we have dug such a big whole in debt. The money clearly flows around.
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