Dec 22 2010

Press-Register: Early Christmas for Austal, lumps of coal for EADS

Mobile Press-Register

The 2 big items on Mobile’s Christmas wish list are contracts for U.S. Air Force tankers and U.S. Navy littoral combat ships.

A decision on tankers will have to wait at least until late January, according to the Air Force’s latest projections. But Christmas arrived early for Mobile’s Austal USA, which late Tuesday cleared a major hurdle on its way to winning the LCS deal.

The Navy’s plan to split the LCS contract between Austal and Lockheed Martin Corp. appeared dead in the water as recently as Friday. The proposal was torched by U.S. Sen. John McCain, R-Ariz., a former Navy pilot who wields powerful influence over decisions affecting the Pentagon.

Under heavy fire from McCain, Senate Democrats dropped the LCS dual-buy proposal from a defense spending bill last week. The deal was resurrected over the weekend, however, through some deft negotiating by members of the Alabama delegation led by U.S. Sen. Richard Shelby, R-Tuscaloosa.

Shelby convinced Senate Minority Leader Mitch McConnell, R-Ky., to insert the LCS deal into a budget resolution approved by the Senate on Tuesday, and the bill received final approval by the House last night.
Richard ShelbyU.S. Sen. Richard Shelby, R-Ala.: Convinced Senate Minority Leader Mitch McConnell, R-Ky., to insert the LCS deal into a budget resolution approved by the Senate on Tuesday.

Under the complex rules of the Senate — and the pressure to complete a budget deal before Tuesday’s midnight deadline — it was no easy trick to get the LCS language back into the legislation. The proposal stood out as the only defense contract in the continuing resolution, a bill designed to keep government running through early next year.

McConnell, a fiscal conservative, faced pressure to keep the bill free of “anomalies,” and rejected an aggressive attempt to include a provision to purchase a second engine for the F-35 Joint Strike Fighers.

The LCS deal, which awards contracts for 10 ships each from Austal and Lockheed, has huge stakes for Mobile. The deal not only secures the 1,200-plus jobs at Austal’s Mobile shipyard, but could trigger a hiring binge that could expand the company’s work force to more than 4,000 employees.

The Tea Party may howl, but Shelby deserves credit for helping to revive the deal. Sometimes Santa wears a pin-striped suit and wing tips, and speaks with an Alabama drawl.

News was less rosy on the tanker front Tuesday.

Boeing Co.’s political backers slipped a last-minute bill through the House that would effectively hand the $40 billion deal to the Chicago-based planemaker.

The so-called “Defense Level Playing Field Act” would force the Pentagon to factor a World Trade Organization dispute over commercial aircraft subsidies into the tanker competition, a move that the Air Force and Defense Secretary Robert Gates have staunchly opposed.

The bill, introduced by U.S. Rep. Jay Inslee, D-Wash., never mentions Boeing’s competitor for the contract by name, but its sponsors said it was aimed directly at the European Aeronautic Defence and Space Co.
inslee.jpgAP photoU.S. Rep. Jay Inslee, D-Wash.

EADS, the parent company of Airbus, is proposing to assemble its tankers at a $600 million factory to be constructed in Mobile, and its KC-45 tanker has been named by analysts as the favorite to win the Air Force contract.

U.S. Rep. Jeff Miller, R-Pensacola, raced out of breath to the House floor to urge his colleagues to vote against the measure, deriding it as the “Boeing Preservation Act.”

U.S. Rep. Buck McKeon, R-Calif., the ranking member on the House Armed Services Committee, growled that Inslee’s bill was presented without giving him or other committee members proper notice. McKeon noted that, just last week, the House rejected an attempt by Inslee to insert a similar proposal in a defense authorization bill.

“I am very disappointed that House Democratic leaders would cherry pick a failed provision from their own flawed process and rush it onto the calendar,” McKeon said.

Inslee’s bill was viewed as symbolic; insiders said it had virtually no chance of being approved by the Senate. But its approval by a 325-23 vote was a reminder of Boeing’s muscle in Congress and an indication that the fight for the tanker contract — and the thousands of jobs it represents — is far from over.