By Bryan Corliss
A congressional committee on Tuesday approved a $20 billion plan to lease 100 Boeing 767s to be used as aerial tankers by the U.S. Air Force.
The move clears the way for a vote by both houses of Congress on the measure, which is part of a broader $318 billion defense spending bill. The votes in the Senate and House will take place Thursday, and the bill is expected to go to the White House by the weekend.
The committee vote “all but guarantees this gets through the House and Senate,” said Sen. Maria Cantwell, D-Wash.
President Bush will sign it into law, predicted U.S. Rep. George Nethercutt, one of the conference committee members who voted for the package Tuesday.
“If you look at the cash flow and the near-term benefits, this is good for Boeing, good for Washington and Eastern Washington, and good for the nation,” the Spokane Republican said.
Boeing spokesman Paul Guse called it “another significant step” in the process. “Obviously we’re pleased it continues to move forward.”
The 767s would replace aging KC-135s, some of which are based at Fairchild Air Force Base near Spokane.
The timing of the deliveries to the Air Force wouldn’t provide any relief from Boeing’s current layoffs. The company plans to announce another round Friday, and cut up to 30,000 jobs by the middle of next week.
The Air Force would place its first six tanker orders next year, for delivery in 2005. That’s the plan, Cantwell said, although some in Congress are looking for ways to push the schedule forward.
“This puts something out there on the horizon for us,” said Machinists union district president Mark Blondin. “We get a few of these airlines ordering, and we’ll be back in recall mode.”
The deal would provide jobs for 2,400 Boeing workers and another 5,500 at Boeing’s suppliers, John Quinlivan, Boeing’s Everett site manager and the head of the 767 program, said last week. The basic aircraft – 767-200s – would be built in Everett and modified elsewhere.
Under the plan, the Air Force would lease the 100 tankers for 10 years. They would replace the KC-135s, which were built on Boeing 707 airframes and entered service between 1957 and 1965. They have been used extensively in military actions in Kosovo and Afghanistan, but are getting old and need frequent repairs.
The first six 767s would be delivered in 2004, with 14 coming the next year. Peak production of 20 a year would continue until all 100 planes are built.
At the end of the lease term, Boeing would get the planes back.
The lease deal is unusual.
The White House put a cap on what it would accept in military spending this year, Cantwell said. Buying $20 billion worth of tankers would have put the bill over that limit.
But under the lease deal, the planes won’t be charged against the Air Force’s appropriations budget until they actually are delivered, thus avoiding the cap.
“This is a resourceful way for the Air Force to obtain an asset that they need anyway,” said Jen Burita, a spokeswoman for Rep. Jennifer Dunn, R-Wash.
Boeing already has agreed to build four similar tankers for the Italian air force. The first of those four will be modified by Boeing in Wichita, Kan. The rest will be modified in Italy by contractors using Boeing-developed kits.
Japan also has ordered one 767 tanker and plans to order three more.
Boeing lobbied hard for the deal, with the support of the state’s entire congressional delegation, Democrats and Republicans.
“It was a good collaboration,” Nethercutt said.
Congress approved a straight cash-and-loan bailout for the airlines after Sept. 11, Blondin noted. “This here, for their money, they’re getting the best aerospace product in the world,” he said.
In a statement, the Air Force said the war on terrorism is “stretching this aging fleet.” It estimated that it would need $3 billion to support the older aircraft, and the leasing program would increase the availability and reliability of the tankers without that expense.
“Those airplanes that are flying our soldiers around are 40 years old. They’re older than the soldiers,” Blondin said. “They should have safe, reliable aircraft. It’s time to retool.”
The 100-plane deal would be one of the largest in Boeing history, only the fifth time the company has landed a single order for 100 or more commercial planes, spokesman Tom Ryan said.
The Associated Press contributed to this report.