Associated Press
WASHINGTON — Fresh from lobbying successes in an otherwise cruel year for Boeing, the aerospace giant’s Washington office is gearing up to secure new government business — and hopefully soften the blow of a downturn in the aircraft manufacturing industry.
The Chicago-based company said Wednesday that its profits in the last three months of 2001 fell 79 percent — with more bad news expected this year and next.
In the final weeks of the last congressional session, Boeing secured provisions in a defense bill allowing the Air Force to lease 100 airborne refueling tankers, built from the 767 widebody jet. The deal could mean about $20 billion to perhaps more than $26 billion, according to some estimates of a contract still being negotiated.
That’s on top of other smaller — but by no means dismissible — government projects approved by Congress, including the lease of four 737s for Cabinet-level and congressional travel and the purchase of up to 30 C-17 transport planes in the next few years.
While the Pentagon and Boeing negotiate the new contracts, the company’s top lobbyist Rudy de Leon is hoping to build on his victories during the new session of Congress, which started last week.
De Leon, a deputy defense secretary during the Clinton administration, sees a list of issues and business opportunities for Boeing: aircraft safety improvements, the national missile defense system, new C-17 and F/A-18 aircraft for the military and a satellite-based Air Traffic Management system now being designed to fly more planes safely in the skies.
Time will tell if the company will be able to replicate its success in Congress late last year. The Boeing 767 tanker program was a hard-sell at the right time.
Days after Sept. 11, the company realized the commercial aircraft business was declining and announced up to 30,000 layoffs. In late October, Boeing also lost a $200 billion contract to build the military’s next-generation Joint Strike Fighter. Rival Lockheed Martin won.
For some time, the company had been working with lawmakers, particularly Rep. Norm Dicks, D-Wash., to position itself to manufacture the aircraft that would replace the Air Force’s aging fleet of KC-135 tankers. The war on terrorism meant those tankers had new duties refueling planes that protect U.S. cities and that handle lengthy missions in Afghanistan.
"It was a nexus of Boeing having the right product at the right time, and there were these unique national security and economic circumstances that we were all trying to deal with," said Rick Desimone, chief of staff to Sen. Patty Murray, D-Wash., a leading advocate for the lease deal.
Boeing hit Capitol Hill. The company has about 20 registered lobbyists on staff and even more than that on contract. As the 767 deal and others were considered, some of those lobbyists were buttressed by De Leon and other top executives — Chairman Phil Condit, Military Aircraft President Jerry Daniels and Commercial Airplanes President Alan Mulally. De Leon says those high-profile people will be back for future pitches.
"The job of the Washington office is to make sure that there are strong communications throughout the community," de Leon said.
He and members of the Washington state and Kansas delegations — among the places where the tanker work is expected to go — sold the lease program as one that would cost less up front and save the government billions on maintenance needed to keep the older tankers flying. The deal would also solve another problem: the Air Force didn’t have the money in its procurement budget to buy the aircraft outright.
Boeing’s advocates met resistance from critics including Sen. John McCain, R-Ariz., who complained the government was going to pay much more to lease the aircraft than it would to buy them — perhaps double the purchase price. He sees Boeing as the best "war profiteers" yet.
"Whatever Boeing wants, Boeing gets," McCain said. "As long as they continue to be able to contribute huge amounts of campaign contributions, they will probably continue to get good deals."
Copyright ©2002 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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