This being an election year in the US, some big companies can get away with almost anything.

After losing a $35 billion deal to build the next generation of U.S. Air Force tanker planes to European competitor EADS (refer to previous post), Boeing called “foul-play” and Congress forced the Air Force to re-open the bidding process. Boeing has now publicly stated that they will not participate in the bidding unless it is extended by an additional four months. Boeing needs the extra time to include a different plane in the bid. Well sure, the first plane they offered lost the bid.

Remember, we are talking about a big military project here, paid for with taxpayer money. The bidding process is meant to be open and fair to ensure that the government gets the best product for the best price. How can pampering one bidder (Boeing) be tolerated? Like I said, it is an election year and politicians want an American company to win, even though the EADS bid (with partners Northrop Grumman and engines from GE) will also lead to new jobs in the US.

If Boeing gets the contract in the end, it will be not only a blow to international business in general but will represent a low point in US – European relations, and may lead to some sort of silly retaliation.

Image from www.af.mil. 

Post from: EveryJoe

Boeing Continues the Poker Game for Air Force Tankers

The days of the rallying cry “Buy American” are gone. The Pentagon has decided to purchase the next generation of tanker aircraft from the European Aeronautic Defense and Space Co. (EADS) instead of from Boeing and, this being an election year, politicians are fuming.

Just a quick scratch at the surface, however, shows how pervasive international business is these days. In reality, there are very few truly “American” or “100 % European” companies any more. If this U.S. Air Force contract for $35 billion goes to EADS, some jobs will be created in Europe, but the majority of jobs, about 25,000 of them, will be created in the U.S. Not only will the tankers be assembled in the U.S., but the engines will come from General Electric production facilities, most of which are in the U.S.

The defense industry is large and like all large industries, it is global. The Air Force chose the supplier which met their requirements and the best cost. Isn’t that what we expect the government to do with our tax money?

What is your opinion? Does the U.S. Military have an obligation to purchase equipment only from U.S. Companies? How would you define a U.S. Company?

Image from www.af.mil.

Post from: EveryJoe

International Business Versus Patriotism