Breaking News: Boeing Wins $35 Billion Tanker Contract (updated)

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AFL-CIO: Breaking News: Boeing Wins $35 Billion Tanker Contract

The Air Force has given a major boost to U.S. job creation by awarding a $35 billion contract to build the next generation of air refueling tankers to Boeing Co. The announcement was made at the Pentagon late this afternoon after the financial markets closed.

Boeing was locked in a competition with European-based EADS, which builds the Airbus, for what is the largest contract in Air Force history.

Boeing said the tanker win would mean a total of 50,000 good union jobs across the country. The Air Force delayed the awarding of the tanker contract until after the November elections.

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Updated to add this from EPI: Air Force tanker decision will support tens of thousands of U.S. jobs

The U.S. Air Force today announced that it will award a $35 billion contract to U.S.-based Boeing Company to supply 179 air refueling tankers. Construction of these tankers will support tens of thousands of U.S. jobs. This contract is the first installment on a plan to replace the aging fleet of 500 KC-135 tankers, which first entered service in the 1950s. The Air Force expects to replace its entire fleet of tankers with 400 new tankers, at an estimated cost of up to $100 billion, making it the Air Force’s third largest contract ever.

The Air Force has awarded the contract to Boeing, an American company that won the contract, fair and square. The Air Force decision ensures that tens of thousands of high-quality aerospace jobs will be created in the United States. The World Trade Organization recently found that the European firm Airbus, and its parent company EADS, the major competitor for this contract, had received $178 billion in illegal subsidies, including $5 billion for the Airbus A330 airframe, which was used to offer their competing tanker to the Air Force at a below-market price.

Airbus is a European company, and most of the components for their tankers would have been made in Europe. Thus, the Air Force’s selection of Boeing also represents an important recognition that maintaining a domestic manufacturing base is critical not just for job creation, but also for national security. This decision follows the recent announcement, reported in the Feb. 2 issue of Manufacturing & Technology News, that the Director of National Intelligence is undertaking a National Intelligence Estimate review of the security implications of the decline of U.S. manufacturing.

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