Defense Focus: KC-45A politics -- Part 1

By MARTIN SIEFF, UPI Senior News Analyst Published: March. 20, 2008 at 12:30 PM
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WASHINGTON, March 20 (UPI) -- Although the U.S. Air Force has clearly chosen the Northrop Grumman-EADS KC-45A air tanker over its rival, the Boeing KC-767, political uncertainties continue to cast their shadows over the decision, both in the United States and Europe.

Germany and France, which dominate in the European Aeronautics and Space Co., are run by strongly pro-American leaders. But that could easily change.

Chancellor Angela Merkel especially is looking vulnerable in Germany. If the United States gets involved in future military action -- for example over North Korea, Iran or to defend Taiwan -- that is unpopular or controversial in Europe, national governments could come under intense pressure to terminate or renegotiate the KC-45A contract.

Also, relying on overseas sourcing for a key weapons system is something every great power through history has sensibly tried to avoid. In this case, it could also prove to be bad business.

The U.S. dollar is currently weak and the U.S. foreign trade balance of payments deficit and annual federal budget deficits are now running at record levels. Given the reluctance of the Bush administration to let interest rates soar in order to attract foreign capital back into the United States, the dollar could plunge far further on international exchange markets. And the real cost of "buying European" for the gigantic KC-45A contract could therefore soar out of control. The U.S. Air Force has already contracted for 179 KC-45As worth $35 billion. The contract is eventually expected to grow to 600 KC-45As worth $100 billion.

On the other hand, defenders of the KC-45A contract praise it as creating a vital bridge of mutual interest between the United States and its main continental European allies, and therefore as vital to retain and strengthen unity in the often strained trans-Atlantic alliance. This is another strategic or geopolitical imponderable that cannot be quantified on a balance sheet.

The KC-45A program is currently on ice for a 100-day period while the U.S. Government Accountability Office, following a request from Boeing, carefully re-examines it. However, even if the GAO should find in favor of Boeing, it can only issue a recommendation and its conclusions have no binding power. Only the U.S. Congress could act to force a renegotiation of the contract or cancel the award.

Reversing the decision against Boeing would be unprecedented for such an enormous defense procurement deal. However, in a presidential election year where defending U.S. jobs against the growing thereat of foreign competition has already become a central issue, the temptation to do so may well be large, especially for Democrats hoping to build working-class support for the November elections. That is especially the case for Sens. Barack Obama, D-Ill., and Hillary Clinton, D-N.Y., who are both seeking to woo the crucial white working-class vote in their long, closely fought contest for the Democratic presidential nomination.

Supporters of the U.S. Air Force's KC-45A choice claim that no strategic loss of technology would be involved as the technology to build air refueling tankers has been around for half a century.

However, that is far from true. No European country over the past half century has been able to develop both the technology and the production lines to make large numbers of large air refueling tankers of their own. Such a technology is essential for any nation that wishes to project its power around the world rapidly.

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Next: What the Europeans may gain from the deal


© 2008 United Press International, Inc. All Rights Reserved.


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