March 12, 2008 Lou Dobbs Tonight (CNN), 7:00 PM
LOU DOBBS, CNN ANCHOR: The secretary of the Air Force today admitted that this nation's industrial base is in decay. And incredibly he made the stunning admission while defending the Air Force decision to award a $35 billion contract to EADS, a European consortium that produces the Airbus.
Christine Romans has our report.
(BEGIN VIDEOTAPE) ROMANS: A standing ovation for the men and women of the Air Force. But tough questions for Air Force brass, who hired European company EADS to build 179 aerial refueling tankers. Why would the Air Force spend $35 billion in taxpayer dollars to a company being sued by the U.S. government for unfair trade subsidies?
SEN. PATTY MURRAY (D-WA): We have a contract going to a company that we do as a country have a case against because of those illegal subsidies.
AIR FORCE SECRETARY WYNNE: We believe we accurately followed the laws and arrived at a decision selecting the better of two very qualified competitors.
ROMANS: The Air Force chose a tanker based on the Airbus A330, much of it to be built overseas, then assembled in Atlanta. The mid- sized Boeing offering based on a 757 was rejected. Boeing says 85 percent of its claim would be American made. Boeing and some lawmakers contend the larger Airbus tanker would require larger hangars and longer runways.
MARK MCGRAW, BOEING: The fuel used, the repair cost, the impact on the Air Force's infrastructure -- think hangars now, was much less on our product. That was going save the Air Force and the U.S taxpayer billions of dollars.
ROMANS: Northrop Grumman is EADS American partner and says 48,000 American jobs will be created by the tanker deal and called concerns about outsourcing hype and misinformation.
PAUL MEYER, NORTHROP GRUMMAN: This will provide a significant boom in the southeast. We have 230 suppliers, all U.S. based. So we're not sure the hype of losing 40-plus thousand jobs that don't even exist today in the Boeing camp, much less on ours.
ROMANS: As for the Air Force, officials again and again said the contract was awarded legally. But Senator Patty Murray of Washington questioned whether complicated procurement and trade laws were undermining American economic and national security. When pressed, the Air Force secretary admitted concern about the fragile manufacturing base in this country.
MURRAY: I'm asking if you think the current procurement process reflects the needs of the defense, of our defense?
WYNNE: I think right now I worry about the industrial base of the future. I think we started industrial base in 1990 and I think our market doesn't support a large industrial base right now. (END VIDEOTAPE)
ROMANS: Air Force Secretary Wynne went through a long list of important military equipment already made by foreign companies. Northrop Grumman says it's already starting working on this contract, but they expect a stop work order anytime now, as the Air Force and the Government Accountability Office process Boeing's formal appeal of this decision. So we haven't heard the last of it.
DOBBS: We haven't heard the last of it, I certainly hope because to hear the Air Force secretary sit there and talk about 1990, the industrial base started decaying and this market can't support a defense manufacturing capability. Is anyone in that committee saying to that man, you're a complete fool?
ROMANS: There's actually great reverence for him today, Lou, because they basically acknowledged that the laws and the trade rules are so complicated, that he's trying to get the best equipment to the men and women on the ground as quickly as he possibly can and he says he's following the law to the letter.
DOBBS: He's following the law to the letter, is he? Well let me just if I may share with you, and with you, just wait there for a second, this from a viewer in California who wrote in with what I think is a powerful, compelling suggestion for the United States Air Force tanker deal.
This isn't going to please Northrop Grumman. It's not going to please Boeing air craft, but it just may please taxpayers. It just might please your sense of fair play, your sense of innovation, American know how and inventiveness.
A fellow by the name of Ralph Ricksis an aviation buff and wrote in to suggest to me that the U.S. Air Force instead of all this, buy used Boeing 767s and McDonnell Douglas DC-10s with thousands of hours left on their air frames and engines and convert them into tankers, which he believes could be done for a pittance by comparison to the $35 to $40 billion that is at play in this deal.
And obviously rather than outsourcing American national security and jobs to a foreign company. I want to say, Ralph, great idea. I hope more Americans will write into this broadcast to help us try to make sense for the people, the humble servants who serve us all in elected office in Washington, D.C. because brother, they need the help. Christine, what about that idea? I mean that just makes too much sense, doesn't it?
ROMANS: Well maybe they'll take that up in one of the many hearings we're expecting Lou on this, as we go forward.
DOBBS: For those that hold this Air Force secretary in reverence, I say why are they not dealing with these issues? We have seen the light helicopters for the army go to a foreign contractor, the president helicopters go to a foreign company.
We're watching tanker air craft. Now what is it next, jet fighters, cruise missiles? I mean, this is disgusting what's going on and I hold - this is just absurd what he's doing. And for this little club in Washington, sitting there to say we really think you're a terrific fellow, you're doing just hunky-dory while thousands of jobs are at risk here.
ROMANS: I heard again and again today, Lou, that global aviation is an industry that has been outsourced, is an industry where even Boeing gets parts from all over the world.
DOBBS: Especially Boeing because they're the most successful.
ROMANS: Absolutely and that this is simply the way it is. You get the parts from a lot of different places, you put it together.
DOBBS: Do you know how dumb this country is getting in terms of its business elites? They can't imagine a world in which they change direction. They can't imagine learning from their mistakes.
And this country is facing a country in innovation, because we are off shoring our production. We are -- as the secretary of the Air Force noted, we are a country with an industrial base that is in utter decline. Hopefully, somebody will come to their senses in that town. Maybe soon, why don't we hope for it all.
Christine, thanks -- Christine Romans.
DOBBS: Time now for the poll. The question is: Do you believe the Air Force should reserve its decision to outsource American jobs and national security and award the tanker contract to Boeing?
Yes or no, cast your vote at loudobbs.com. We'll have the results here later in this broadcast.
And you can tell Congress how outraged you are about this deal, the U.S. Air Force choosing to ship American jobs and our national security overseas, go to our newly designed Web site, LouDobbs.com. You'll find links there to the Web sites of the two biggest opponents of this deal in Congress, Congressman Todd Tiahrt in the House and Senator Patty Murray in the Senate.
DOBBS: The results of our poll tonight: 92 percent of you say the Air Force should reverse its decision to outsource American jobs and national security and award instead that tanker contract to Boeing.