A nosediving housing market; financial markets in disarray; gas prices near an all-time high: These are the symptoms of a nation in financial upheaval, at a potential inflexion point from which we may sink lower or emerge stronger. It’s part of a disturbing trend of exporting jobs and capital, and importing cheap labor and products, all of which undermines America’s working families and our economy.
In a pivotal election year with the economy on uncertain footing, one would think that the federal government would desperately try to spur investment and stimulate domestic job growth — in short, to reinvest in America’s infrastructure and put America back to work. But in an absurd plot twist fit for a murder mystery novel, the Department of Defense is giving foreign companies an unfair advantage and threatening tens of thousands of jobs in the process.
Soon the Department of Defense (DoD) will determine the winner of the Air Force’s $40 billion contract to build new aerial refueling aircraft, or “tankers.” In the competition, Boeing is going head to head with French manufacturer EADS, whose bid has been heavily subsidized by European Union countries to the tune of billions of dollars.
At issue is whether our Department of Defense will invest in U.S. companies that will provide jobs for U.S. workers and contribute to building healthy communities. The $40 billion contract would support 44,000 direct and indirect jobs across the United States, both at Boeing facilities and some 300 major supplier companies.
On the other hand, Boeing’s major competitor EADS/Airbus has taken its lumps lately. Dogged by insider-trading charges and a major WTO lawsuit over the $100 billion in illegal subsidies the company has used to undercut American manufacturers, EADS has become a whipping boy in the U.S. media. The brazenness of the $100 billion subsidy program has provoked bipartisan outcry for action, with debate focusing on whether the U.S. Trade Representative has been tough enough in prosecuting EADS for its continued violation of international trade laws. But at the very least, no one thought that another arm of the government would actually reward EADS by offering the company a lucrative defense contract in exchange for an aircraft funded by the same subsidies the administration so strongly condemns. It is difficult to recall another instance in which the U.S. government so absurdly contradicted itself and so strangely undermined its own efforts.
While EADS has found itself a “minority U.S. based partner” (Northrop Grumman), it itself has admitted that if it wins the tanker contract, the company will move most of the manufacturing work to Europe.
Intellectual property will also be held close to the European vest. With the Europeans holding the keys to this project, American manufacturers and workers will get the short end of the stick.
No one disputes that DoD should always promote vigorous competition for military contracts. In fact, Congress did the right thing several years ago by stripping Boeing of a no-bid contract award for replacement tanker aircraft. But at a time when the U.S. economy is facing a recession, when cities are crumbling and workers are hurting, the idea of not rewarding foreign companies who cheat international trade laws to undermine our labor market should be a no-brainer.
Congress should step in immediately to revitalize our economy with domestic investment and good-paying jobs for U.S. workers and require this foreign manufacturer to abide by the rules.
Reverend Jesse L. Jackson Sr. is the founder and president of the RainbowPUSH Coalition and is a prominent civil-rights leader.