A Second Chance to Stand for American Jobs

The Government Accountability Office gave American workers and the principle of fairness a victory when it ruled [1] that that a multibillion-dollar Air Force tanker contract was improperly awarded to a consortium that included the French company EADS, makers of Airbus, and was backed by Sen. John McCain.

Back in March we called out McCain and the cabal of lobbyists and Air Force officials [2] who tilted the procurement process in a way that, as the GAO concludes, led to "a number of significant errors that could have affected the outcome of what was a close competition between Boeing and Northrop Grumman," EADS's American partner.

The key point that we were making, though, went beyond the flaws of one procurement process. At stake was whether the country would continue a short-sighted, headlong rush to sign away its manufacturing capacity, and the jobs that go with that capacity, under the illusion that doing so would save a few short-term dollars.

What Bob Borosage wrote at that time [3] needs to be at the forefront of the political discussion, not only about this deal, but about our manufacturing and trade policies generally:

Many market fundamentalist economists argue that the Europeans made a mistake in subsidizing Airbus, and that the U.S. benefits by allowing them to make the airplanes and pocketing the benefits of those subsidies. That attitude has played a large role in informing U.S. trade policies. It is the attitude that undergirds McCain’s purblind support for trade accords defined by global corporations to protect property rights and not worker rights or the environment.

We disagree. We think the U.S. has to have a national trade strategy in a global economy. In key industries, our capacity to make things here matters. Those who make the current generation of advanced products are the most likely to assemble the capital, invention and hands-on machinist and engineering experience vital to creating the next generation. The innovative economy doesn’t exist in a vacuum or a think tank. For the U.S. to compete on the high end of the global economy requires us to be serious about sustaining advanced manufacturing and technological capacity here in the U.S. Failing to figure out that strategy will leave U.S. workers in a race to the bottom, hollowing out the middle class that is this nation’s triumph. Then we’ll see a reaction that will make all of us shudder.

In that regard, McCain's response to the GAO report speaks volumes. After conceding that the GAO findings will mean that the contract that he helped grease for EADS-Northrop Grumman should be rebid, he was quoted [4] as concluding, “I’m still proud that the first time around, I saved taxpayers $6.2 billion.”

No, he shouldn't be, because no, he didn't. The GAO findings question whether the EADS-Northrop Grumman deal was the best deal for the taxpayers; its news release says that the Air Force "conceded that it made a number of errors in evaluation that, when corrected, result in Boeing displacing Northrop Grumman as the offeror with the lowest most probable life cycle cost."

More importantly, there is a difference between price and cost. The fact that an item can be purchased for a few pennies or a few billion dollars less doesn't make it the best buy. The long-term damage done to the country's middle class as millions of manufacturing jobs went overseas, in the pursuit of cheap goods and high profit margins, is a strong testament to that reality. In what the GAO itself said was a "close competition" on the merits between an all-American contractor and an international consortium with less of an interest in protecting America's job base, the deciding factor should be the future of American workers and the protection of our manufacturing capacity.

Now, it appears we have a chance in this contract to make the right decision for the right reasons.