Sarkozy to Take Tanker Fight to Obama

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The European Aeronautic Defence and Space Company (EADS) had been at odds with American industrial giant Boeing over a lucrative Defense Department contract for nearly five years. The United States military was offering a contract valued at nearly $40 billion to the best available aerial refueling tanker for the next generation of airborne warfare.

In 2008 EADS, and its subsidiary Airbus, won the bidding process and was granted the contract. However, Boeing called for a government audit of the process and upon further investigation it was found that EADS, Airbus, and Northrup Grumman (their American partner) had given improper benefits and kickbacks to several United States Air Force personnel during the bidding.

Even if the EADS-Airbus tanker was a better project, a more capable aircraft, or a cheaper alternative, the fact that their staff muddied the waters with questionable contacts was enough to restart the process. The Government Accountability Office was called in, then Senator Barack Obama went on the record expressing his own disapproval, and the Defense Department was forced to reevaluate all potential bids.

Boeing was given another shot with a revised tanker project producing smaller planes at less cost. After a tug-of-war spanning two presidential administrations EADS finally opted out of the bidding last week; leaving Boeing as the only remaining commercial entry.

This is not a guarantee that Boeing will receive the contract – the Defense Department could still reject the Seattle-based firm’s plan and simply start over at a later date. However, the loss by EADS has proven controversial across the Atlantic.

France’s Prime Minster, Francois Fillon, called the United States “protectionist” for denying the foreign bidder. French President Nicolas Sarkozy is expected to make the topic a point of discussion during his visit to Washington at the end of March. Leaders in Germany have also voiced opposition to the perceived “force out.” EADS leaving the bid has even upset some Republican lawmakers in Alabama who would have benefited from an Airbus win – Airbus had plans in 2005 to expand a factory outside of Mobile, Alabama.

France 24, an international English-language outlet, ran a detailed exposé on the so-called “controversy” over the weekend. Correspondent Abby D’arcy Hughes went so far as to say that the bidding showed overt favoritism on the part of the U.S., and that the Airbus tanker was the better aircraft.

Even if it were possible to make such a contention, it misses the point. The United States government is not obligated to open contracts to foreign companies, or even to domestic private companies. Our government could easily do what every other nation in the world does by only making procurements from domestic companies. Instead, we contract out to foreign firms all the time for everything from bullets to highways.

The bidding on this tanker project was open internationally. It took several offers and, after going through all proper due process, ended up with an American firm winning out.

The GAO did an investigation and found that Airbus had been given favorable treatment during the first round. After resetting the scales and making both Boeing and Airbus jump through all the hoops and red tape, this time with a more transparent process and no under-the-table favors, Boeing emerged on top.

The United States is being labeled as “protectionist” despite the fact that it maintains the world’s most open economy. We put a privately-owned domestic titan, which has fallen on tremendous financial difficulties, up against a state-supported multinational conglomerate that has the full backing of the entire European Union. And in the end David still beat Goliath. The fact that this is even slightly controversial, is evidence of that openness.

France, the primary headquarters of EADS and Airbus, may be upset that they lost, but they were certainly not cheated. President Sarkozy will likely bring up the topic with President Obama when the two meet, but if he is hoping for an apology he will probably fly back to Paris without one.

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