Talk about a lose-lose. The Boeing Co.’s aborted tanker deal might be one for the history books, a case study in how a couple of smart people managed to totally bungle a slam-dunk government procurement deal.
Buried in Herald archives is a story from December 2001 that says Congress had just voted to authorize the U.S. Air Force to lease 100 767s from Boeing to be converted into refueling tankers. The estimated cost: $20 billion.
The skids were greased. Boeing was going to get a big order, the Air Force was going to get new and more capable planes, Everett was going to get jobs and the politicians were going to get the credit. That first 100-jet order would certainly lead to follow-up business from the United States and its key allies, who could end up ordering hundreds more tankers.
The only way things could go wrong was if somebody did something criminal or stupid – or criminally stupid.
And that’s what happened.
The deal drowned in an ugly ethical-political morass that destroyed the careers of Boeing’s former chief financial officer, Mike Sears, Pentagon weapons buyer Darleen Druyun, and Sears’ boss, Phil Condit.
The deal also jeopardized the careers of a couple of thousand people in Boeing’s Everett factory, who would have been building those tankers by now.
The Air Force also is a loser here. The tanker deal critics are right; with constant maintenance, the service can keep its 40-year-old KC-135s flying. But the KC-767 is simply a better airplane.
While now it is clear that the tanker lease deal was negotiated illegally, I’m not sure taxpayers are big winners now that it’s been blocked. The Air Force is going to have to replace those KC-135s sooner or later, and lease deal or straight-up purchase, we’re going to have to pay for it one way or another.
I can see only two clear winners in the whole debacle: Sen. John McCain, R-Ariz., who can justifiably take credit for derailing the biggest Pentagon weapons scandal of the decade, and Airbus.
Back when all this started, Boeing enjoyed a near monopoly on the world market for aerial refueling tankers, after having developed the boom used by the Air Force for aerial refueling. Airbus didn’t even have a workable tanker design.
Today, Airbus has scored wins for tankers in the United Kingdom and Australia, it is developing a refueling boom of its own, and it has put itself in a position to bid on U.S. tanker deals in the future.
So what happens now?
Losing the tanker lease deal doesn’t necessarily mean the end of the line for the 767 – but it’s close. Boeing had said that it would make a decision on the future of the line in the spring. Now it’s fuzzing that deadline, pushing it back to a vague “midyear.”
That gives Boeing and the Air Force six or eight months to negotiate a new tanker deal – this one a purchase rather than a lease.
I suspect that it will happen. Boeing executives have told me from the start they didn’t care if the Air Force leases the planes or buys them, and the Air Force is going to need the planes.
Meanwhile, jobs have been lost, tax dollars wasted and opportunity has slipped away on the wind.
Reporter Bryan Corliss:
425-339-3454 or
corliss@heraldnet.com.
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