For Immediate Release:

Monday, March 10, 2008

(Washington D.C.) – Today, U.S. Senator Patty Murray (D-WA) delivered a speech on the Senate floor in which she pointed to new questions raised in recent reporting that describe how the Air Force's decision making may have been unfairly influenced.

The full text of Senator Murray's speech follows:

Mr. President, in the last several days we have learned some surprising things about the Air Force’s decision to award a $40 billion contract to the European company Airbus.

The Air Force wants Airbus – which is headquartered in Toulouse, France – to supply our next generation of aerial refueling tankers.  It chose Airbus over the American company Boeing, which has been making the tankers for the last 50 years.

Now, I have made it clear over the past several days that I think this decision is short-sighted and dangerous.  But today, even more questions have been raised about the process the Air Force followed to make this decision.

So I want to take this opportunity to walk through the impact I believe the Air Force’s decision will have – because I think we need to take a good hard look at whether we – as members of the Senate – think this contract should be finalized.  

Foreign Control

First, Mr. President, we need to be very cautious about any decision that awards the right to build a critical part of our military air technology to a company controlled by foreign governments.  What happens if that government disagrees with us on foreign policy?  What if it decides it wants to slow down our military capacity?  Do we want another country to have that kind of control?  

The Air Force didn’t take that into consideration.  They say they didn’t have to.  I think this case is a perfect example of how misguided that idea is. 

Airbus is owned by the European Aeronautic Defense and Space Company – or EADS – which in turn is controlled by several nations.  Among them are countries that haven’t always agreed with the United States on foreign policy.  They include Russia, which has a 5 percent stake, and the United Arab Emirates, which controls 7-1/2 percent of EADS. 

Now, EADS has already demonstrated that it is willing to bend the rules if it can help the company make money.  I’ve talked extensively about their attempts to sell military helicopters and planes to Iran and Venezuela.  But now we are opening the doors open to a key piece of our military defense.

Mr. President, America’s global military strength is built on our ability to use our military might anywhere in the world, at a moment’s notice.   Aerial tankers are the linchpin of our air power because they allow the U.S. Air Force to stretch across the globe. 

Until now, the technology that powered these critical planes rested in the hands of Boeing – and its American workforce – who have been building them for more then 50 years.  And until now, our tankers have been built by manufacturers, designers, and engineers who are bound by law from selling technology to countries that sponsor terrorism. 

But as a result of this contract, we are allowing EADS to take over a cornerstone of our military technology – and we’re actually paying them to do it.  In fact, I argue that decision was a $40 billion investment in the military research budget of EADS and Airbus.

The Air Force has said it wasn’t their responsibility to take our security or our industry into account.  Well, I say to my colleagues, that Congress must.  We must be more forward-looking than that.

Economy

Second, I question why the Air Force was not required to take the economic impact into consideration when it awarded this contract.  If Boeing had won, it would have created 44,000 U.S. jobs.  But it is far from clear what kind of investment Airbus and its partner Northrop Grumman plan to make in the United States.

Our economy is hurting.  We’re nearing a recession – if we aren’t already there.  Families are struggling just to get by in part because their factory jobs have been moved overseas.  Workers across this country are frustrated and angry that – at a time like this – their government wants to take American tax dollars – their tax dollars – and give that money to a foreign company to build planes for our military.

And we have more reason for concern because for decades, Europe has provided subsidies to prop up Airbus and EADS.  Airbus is a jobs program that has led to tens of thousands of layoffs here in the U.S.  And EADS has made little secret of its desire to dismantle the American aerospace industry.

Our government is concerned enough about this practice that we have a WTO case against the EU.  Yet our government awarded Airbus the contract anyway.  Mr. President, that should give us pause – because EADS is already looking to build on the toehold that contract gives them in our aerospace industry.

A report in a leading French news service today says the executive president of EADS, wants to build on the company’s success with the tanker contract and propose to the EADS board “two takeover projects in the fields of defense, security or services.”

And he said, “One of them at least should be in the United States.”

This Decision Raises too Many Questions

That brings me to my final point today, Mr. President.  Why didn’t the Air Force consider these obvious questions about national security and economic security?

The Los Angeles Times today suggests an answer.  It reports on the front page today that EADS and its partner Northrop Grumman may have played a role in narrowing the scope of what the Air Force looked at.  

In fact, the Times reports that Northrop executives ensured that the Air Force wouldn’t ask the competitors how government subsidies would help pay for the design and development of the tanker – the subject of the very WTO dispute I mentioned. 

And according to the same article, Northrop made threats in order to shape the criteria the Air Force followed.  The Times reports, “Northrop threatened at one point to pull out of the competition if the Air Force didn’t change the way the aircraft would be evaluated.”

Did the Air Force pull a bait and switch with this contract?  Did it unfairly change the process to benefit EADS?  

Closing

Mr. President, I believe there are too many serious questions about the selection process.  As U.S. Senators, it is our job to consider the future of our national security and defense.  I believe we must get an open and honest answer to these questions before this contract is finalized.  We must demand the answers.

Our economy – and our aerospace industry are suffering – and we are at war across the globe.  We must get this right.  Our future depends on it.