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Archive for Saturday, May 24, 2003

Pentagon to lease Boeing jets

Kansas lawmakers praise $16 billion deal that will mean jobs in Wichita

May 24, 2003

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— The Pentagon has approved a $16 billion Air Force plan to lease 100 modified jetliners from Boeing Co. to use as refueling tankers, which critics say could cost more than buying the planes.

Defense Secretary Donald Rumsfeld made the final decision, and it will save billions of dollars, Pete Aldridge, the Pentagon's chief of weapons acquisition, told a news conference Friday.

"This minimizes the near-term costs to the Department of Defense and delivers the aircraft sooner," Aldridge said.

The controversial plan has undergone repeated delays. But supporters in Congress, including House Speaker Dennis Hastert, kept up pressure on the Pentagon.

"We just can't rely on antiquated" tankers in the aging fleet, said Hastert, whose state of Illinois is home to Boeing headquarters. "I appreciate the Pentagon and administration for doing this."

Sen. John McCain, R-Ariz., the deal's sharpest critic, said he was extremely disappointed by what he called "a profligate waste" of taxpayer's money.

"It's a lousy deal for the Air Force and for the American taxpayer," McCain said. "In all my years in Congress, I have never seen the security and fiduciary responsibilities of the federal government quite so nakedly subordinated to the interests of one defense manufacturer."

Critics have called the estimated $16 billion price tag too high and complained about the unusual structure of the deal.

Under the deal, Boeing can lease the tankers for about $131 million each, said Sen. Pat Roberts, chairman of the Senate Intelligence Committee. The Air Force would be able to buy the planes after six years for an estimated $4 billion.

The plan has strong support in Congress because of the approximately 2,300 jobs it would bring to Boeing.

The tankers' 767 airframes would be built at Boeing's plant in Everett, Wash., about 25 miles north of Seattle. Other work on the military modifications would be done at Boeing's Wichita, Kan., plant.

"This is a nice piece of good news in a community that's been searching for good news," Rep. Todd Tiahrt, R-Kan., said of Wichita, which has lost around 14,000 aviation industry jobs since Sept. 11.

While this initial plan calls for 100 planes, Tiahrt said "the door is open for additional units."

"Long-term, this is going to be a good program," he said. "It's going to last a decade, and it's going to help with job creation in the Wichita area. I'm real excited."

Because sales of the widebody 767 have lagged in recent years, the deal would be a boost for Boeing's commercial airplane division in the Seattle area.

"I've worked for more than a year with the Air Force and the department to see that this decision was reached," said Roberts, R-Kan.

Sen. Maria Cantwell, D-Wash., said the deal would be a major boost for the depressed economy of the Seattle area.

"It's a big victory for our state's economy and will deliver a sustained boost for Boeing's production lines and its workers at a time when they need it most," said Cantwell. "The men and women who serve our nation in the Air Force need and deserve the best equipment available, and the Boeing 767 tanker is a best-of-breed technology."

The tankers are intended to replace more than 500 KC-135's that are more than 40 years old.

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