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Key figures in the tanker saga

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By Michelle Dunlop
Herald Writer
Published:
  • Jim Albaugh, president of Boeing Commercial Airplanes.

    Michael O'Leary / The Herald

    Jim Albaugh, president of Boeing Commercial Airplanes.

  • Wes Bush, CEO and president of Northrop Grumman Corp.

    Associated Press

    Wes Bush, CEO and president of Northrop Grumman Corp.

  • Former Boeing Chairman and Chief Executive Officer Phil Condit in 2001.

    Justin Best / Herald File

    Former Boeing Chairman and Chief Executive Officer Phil Condit in 2001.

  • Rep. Norm Dicks, D-Wash.

    Michael O'Leary/The Herald

    Rep. Norm Dicks, D-Wash.

  • Ralph Crosby

    Ralph Crosby

  • U.S. Sen. John McCain, R-Ariz.

    Associated Press

    U.S. Sen. John McCain, R-Ariz.

  • Sen. Richard Shelby, R-Ala.

    Associated Press

    Sen. Richard Shelby, R-Ala.

  • Sen. Patty Murray

    Sen. Patty Murray

During the three contests the U.S. Air Force has held over the past 10 years to replace its aging tanker fleet, a number of people have emerged as key figures. Here's a look at some of the key characters and their roles in the tanker drama. Jim Albaugh: The businessman Few people probably understand Boeing's tanker bid better than Jim Albaugh. Albaugh headed up Boeing's defense department during much of the last two tanker battles. He moved over to lead Boeing's commercial airplanes division in 2009. In 2008, Albaugh was adamant that Boeing was pushed into offering the Air Force the wrong tanker, saying the company would have offered a 777-based tanker if it had known a bigger plane was desired. But the Air Force later suggested that it wanted the best deal, not necessarily the largest jet. On the floor of the Everett factory last year, Albaugh emphasized the business opportunities a tanker win would mean for Boeing. "Once we win this, we'll build more," he said. "We'll be building these for air forces around the world." Albaugh, like Boeing chief executive Jim McNerney, has taken to pushing a different point as the contest draws to a close: fiscal responsibility. A tanker win isn't a win if Boeing has to lose money to do it. After taking over as commercial airplanes president, McNerney has overseen an overhaul of the 767 program, building the jet more efficiently in a smaller space. "We would not have made the investment we made if Boeing didn't see demand for the 767," Albaugh said. Sen. John McCain: The reformer The deal was done. The Air Force had picked Boeing for a lucrative deal supplying tankers in 2003. But Sen. John McCain, R-Ariz., smelled a rat. He called the deal an "immense waste of taxpayer dollars" a "corporate bailout for Boeing of tremendous proportions" and "a bad deal for taxpayers, a bad deal for the military and a bad deal for pretty much everyone but Boeing." His complaints opened Boeing's shoo-in deal to scrutiny. Even after the Air Force started its contest anew for the second time, McCain proved to be no friend of Boeing. In 2006, McCain said he thought Boeing had "mended its ways after the original scandal, but that doesn't mean we stop watching the process." The senator from Arizona also has blasted members of Congress for trying to help Boeing's efforts. He shares equal disdain for Air Force flubs, calling the Air Force's disclosure of confidential documents a "fiasco." Wes Bush: The pragmatist The tanker was not Wes Bush's battle. It's one he inherited from his predecessor, Northrop Grumman CEO Ron Sugar. Even as Bush prepared to take the reins in late 2010, he sent signals to the Air Force that Northrop was no longer interested in playing tanker games at any cost. The Air Force's demands place "contractual and financial burdens on the company that we simply cannot accept," Bush wrote in a letter to the Pentagon. Defense analyst Loren Thompson described Bush as "a hard-charging MIT graduate who has a mandate from his board to run a tight ship even if it means passing up big revenues because returns are too hard to quantify." The returns on the tanker contest turned out to be too elusive for EADS' original partner, Northrop Grumman, under Bush's control. Rep. Norm Dicks: The advocate He was one of the first to push for a Boeing tanker contract with the Air Force. And nearly a decade later, Rep. Norm Dicks, D-Wash., has continued that effort. At a tanker rally last year, Dicks noted that the Boeing Machinists union helped him get elected to his first term in Congress. It's a debt the Bremerton Democrat hasn't forgotten. Within a few weeks of the Sept. 11, 2001, terrorist attacks, which crippled the aviation industry, Dicks began a crusade to keep Boeing Machinists working by having them build Air Force tankers. "What we are really talking about is how many fewer people will be laid off," Dicks said. When Northrop and EADS won in 2008, Dicks led the charge against the Air Force. "The most damning of all is the bait-and-switch tactics used by the Air Force," Dicks said. In the most recent contest, Dicks is emphasizing cost, saying Boeing's 767-based tanker has a fuel-efficiency edge over EADS' A330-based tanker. "And fuel costs will go up in the future," he said. Sen. Richard Shelby: The defender As Norm Dicks is to Boeing, Sen. Richard Shelby, R-Ala., is to EADS. Shelby has defended EADS right to compete in the U.S. Air Force contest and his state's ability to build those tankers. In 2007, Shelby sent Boeing a letter scolding the company's CEO when Boeing officials insinuated Alabama's work force isn't capable. "To publicly assert that Mobile, Ala., is a risky choice to build the new Air Force tanker is ignorant and completely unfounded," Shelby wrote to Boeing's Jim McNerney. When Boeing protested after the Air Force awarded the contract to Northrop-EADS in 2008, Shelby called Boeing's effort a "misinformation campaign." "The nation's second largest defense contractor should know better than to stoop so low in an effort to win a contract," he said. In the third contest, Shelby blocked some of President Barack Obama's nominations for top government posts in order to draw attention to what he saw as bid requirements slanted toward Boeing. "This so-called competition was not structured to produce the best outcome for our men and women in uniform; it was structured to produce the best outcome for Boeing. The Air Force's refusal to make substantive changes to level the playing field shows that once again politics trumps the needs of our military," Shelby said last February. Phil Condit: The samurai Under his watch, the Boeing Co. had the Air Force tanker deal in the bag. Under his watch, Boeing blew it. Phil Condit was Boeing's chief executive as an early lease agreement with the Air Force made its way through Congress. But Boeing's pricing in that deal gave Sen. John McCain cause for concern. And when EADS said it could offer the Air Force a better deal, under Condit's watch, a Boeing executive offered jobs for Pentagon weapons buyer, Darlene Druyun, and her family to steer the multibillion-dollar deal Boeing's way. In late September 2003, Condit said the Boeing Co. "behaved exactly as we should have" during negotiations with the U.S. Air Force over the 767 tanker lease deal. "We put in a bid aimed at doing exactly the right thing," Condit said. "It was not affected by any outside information." In November 2003, he acknowledged the Druyun mess and dismissed CFO Michael Sears. Less than a month later, Condit resigned, falling on his own sword like an ancient samurai warrior rather than dishonoring his company. "Boeing is advancing on several of the most important programs in its history and I offered my resignation as a way to put the distractions and controversies of the past year behind us, and to place the focus on our performance," he said. Ralph Crosby: The believer Seven years ago, he proposed a radical idea: let a Europe-based company bid for the U.S. Air Force tanker contract. Ralph Crosby, the chief executive of EADS North America, capitalized on criticism of the Boeing Co.'s price for a tanker lease agreement with the Air Force. Crosby vowed his company, a division of European Aeronautics Defense and Space, would provide a competitive price and save American taxpayers money. "We will team with a major American partner, expand our industrial footprint in the United States, employ American workers and pledge to offer the finest military capability for the United States Air Force at the best value to our taxpayers," Crosby said in 2004. Last year, after EADS' American partner bailed, Crosby continued to push for an EADS bid, even one without a major U.S. backer. "When you've got the best, you've got to offer it," Crosby said. Sen. Patty Murray: The cheerleader When Murray first ran for Congress, she billed herself as a soccer mom in tennis shoes. She's more inclined to wear tailored business suits these days, but she's an unabashed cheerleader for the Boeing Co. “The senator from Boeing” as she's often called, has talked tirelessly in the Senate about the importance of an American-built tanker. She's also be a constant critic of EADS, saying that the parent company of Boeing's arch-rival Airbus builds products that have received millions of dollars in illegal subsidies from European nations. She insisted that those subsidies be considered by the Air Force when it makes its decisions because they lowered EADS' costs. The Air Force refused to take up the issue, noting the World Trade organization hasn't issued a final ruling on subsidies. Even so, the Air Force found that Boeing's bid was the least expensive in the long run because its 767 would burn significantly less fuel than the Airbus A330 that would be used for the EADS tanker.






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