Outsourcing Defense Contracts to Unfriendly Governments
The debt deal that President Obama signed on August 2 has sparked an important conversation about aggressive spending cuts in order to avoid a financial crisis. As part of that debt deal, Congress has formed the super committee to make recommendations to cut spending. The Department of Defense will surely have many decisions ahead of them as they are faced with the likely reality that defense programs may be subject to significant cuts from the committee.
Recognizing the need for light air support, the Department is expected to soon announce its decision on an aircraft to meet its light air support needs. This procurement decision is a case study in what the Department of Defense should do to protect taxpayer dollars. Two competitors have bid on the plane: Embraer, based in Brazil; and Hawker Beechcraft, based in Kansas.
Embraer is a Brazilian company with a strong history of opposing international security efforts by the United States. If Embraer is selected, there is a strong likelihood that taxpayer dollars will be put at risk. Normally the Taxpayers Protection Alliance (TPA) would not take up the issue of a defense procurement project based upon the country in which an aircraft is being built, but considering the unique nature of the arrangement Embraer has with the Brazilian government, a much closer look is warranted.
The Brazilian government has a “golden share” in Embraer, which gives the government a majority share of the company. This allows the Brazilian government to make decisions for the company that cannot be stopped by other shareholders. The golden share also allows the Brazilian government to stop, slow, or alter production of the company’s products. While Embraer claims that the government cannot interfere in business decisions, history shows that as far back as World War II, other foreign governments that have not agreed with U.S. policy have interfered with products being built for American defense machinery.
As the U.S. works towards defeating its enemies abroad, we need to be aware of those who seek to profit from America’s defense. Overdependence on nations that spend significant political capital opposing American foreign policy and national security is counterintuitive — and dangerous.
If the Department of Defense selects the Embraer plane in the coming weeks, taxpayers will be giving more than $150 million to a foreign government at a time when there are no resources to spare. Awarding this contract to Hawker Beechcraft would keep $5 billion in the American economy.
The right decision for taxpayers and for our national security is Beechcraft. Their aircraft appears to be less risky, a superior product that will meet the light air support requirements. And it can never potentially have production stopped or stalled because of international disputes.
Taxpayers understand that it is necessary to spend money to defend the country. What they don’t understand is why the Department of Defense would put tax dollars and national security at risk by choosing a foreign contractor that could threaten both our physical and fiscal well-being.
Also watch David Williams on PJTV discussing “Vacations to Nowhere: Fed Government Funding Tourist Traps & Even a Blood Stained Wall“
I think that this administration is made of drug addicts.
Ideological fanaticism (i.e. marxist anti-Americanism) explains everything they do, but now they have strayed into sheer folly.
“What they don’t understand is why the Department of Defense would put tax dollars and national security at risk by choosing a foreign contractor that could threaten both our physical and fiscal well-being.”
Only if we assume incompetence, or even malfeasance… One may instead assume we were given incomplete information, or have been intentionally mislead in some way.
Baobo said… “One may instead assume we were given incomplete information, or have been intentionally mislead in some way”
Absolutely-this is the point. Political decision- yes.
As Libertship said – ths is not a good economic decision.
So, what is to be gained politically? And- how does one square that
with lying to the American people?
Until otherwise informed, I will assume it’s our “free” market economy working under NAFTA, CAFTA and the WTO.
In fact, it just may be (under our suicidal trade agreements) GATT-illegal to choose an American on-shore company for what other countries might deem “politics” or playing favorites. Say, for instance, they were roughly equal, Brazil’s a bit better price but we chose the Kansas company for benefits to the economy, etcetera.
Ludicrous as it may sound, I wonder if Mr. Williams has checked out the trade agreement angle?
This is just plain stupid. Believe it or not, at one time we not only built some of the best light military aircraft in the world, but these jets were actually in big demand around the world. Planes like the F-5 Freedom Fighter and the A-37 Dragonfly were not only popular and easy to fly, many third-world nations thought they were ideal aircraft for their COIN operations or “brushfire” wars. We exported, actually exported, a lot of these planes and most of them were built in this country, providing many jobs for American workers. So why can’t we do this now? Our Federal dollars should be spent on AMERICAN planes, and the beauty of it is that these dollars could be put to work RIGHT NOW, not two or three years from now. Now THAT would stimulate some jobs in this country, and NOT some other country that could potentially hurt us.
Actually, a major factor in putting the US general aviation manufacturing base out of business was failure to offer any protection from the “product liability long tail”. Manufacturers could be, and often were, sued for mishaps that occurred with very old aircraft, even when those aircraft had been built to what had been the state of the art in aviation at that time. Since it was impossible to quantify the risk, it no longer was a paying proposition to stay in business.
This is not the first time the DoD gave an aircraft contract to a foreign company. In the early 80′s the USAF was looking for a T-37 replacement. Grumman was selected and build the T-46 that turned out to be a failure and was cancelled. The JPATS program was used to find the T-37 primary trainer replacement. Most of the offeror’r were forien companies. The final selection was the T-6 Texan II built by Beechcraft. However, the aircraft is the Pilatus PC-9 built by Switzerland. Yes it was modified for the program but still based on a foreign design. The Marine I was going to an overseas contractor. The new Tanker was going to Airbus before a protest and finally given to Boeing. This country built the greatest aircraft and space vehicles. Now, we can’t even build a trainer and used to have a viable space program. We are down to two major contractors, Boeing and Lockheed Martin from more than a dozen years ago. We are losing the edge. Enough.
As much as I despise the DemBots and their leader, the US has for quite some time sent important defense and technology projects to foreign companies.
#4-F15 Rambo details major aircraft examples, but weren’t there others as well? Night-vision goggles comes to mind.
This practice must stop. It directly weakens our economy, places crucial technology in the hands of competitors (China comes to mind), reduces the impetus for US invention and innovation, and as noted in the article, places production and delivery at risk and under foreign control.
Really, we must try to not be any stupider than we have to be. Are you listening, Washington?
I can’t speak to the relative merits of the Beechcraft and Embraer offerings. But it’s unfortunately the case that many American companies have lost their competitive edge. Our best and brightest aren’t becoming engineers and scientists, our companies spend as much on regulatory compliance as on R&D, and work (assuming they can find a qualified workforce) is often disrupted by union squabbles (cf. Boeing).
How is it, for example, that our own military industries couldn’t come up with working active defense for armored vehicles, but Israel did? The Army elected not to procure the “Trophy” system as it awaited a solution from Raytheon. How many US soldiers died while we waited?
Raymond you nailed it with the referenc to the UNIONS. the unions and their crooked leaders are atrangeling AMERICA,
Expressions here–yours and others–about stupidity of allowing our defense manufacturing base to deteriorate to point where things CAN’T be made here is well taken. Actually a matter of national security. But would be naive to blame it on unions and regulations. If you go back and read the history of how we got where we are, begins with NAFTA.
NAFTA was lobbied for unmercifully by multinatonal companies, passed in a constitutionally questionable way even though hugely unpopular with the public across the whole political spectrums, left to right. Once passed, took risk for companies out of moving off shore. Later Congresses (in their wisdom fueled by corporate lobbyist money)added to that by actually giving tax credits rewarding the move off shore.
If you’ll read (or listen to) Buddy Roemer’s platform on just this issue, he recommends making changes to two sentences in the tax code to start reversing this trend. Interesting approach! Donald Trump is only other candidate who has spoken out and mentioned tariffs as solution. I’m a tariff fan myself–talk about something founding fathers believed in! Not to mention founder of the Republican Party, Abraham Lincoln. Tariffs, in the 19th century, were what made the U.S. a great industrial power. How about tariffs (like a national sales tax but easier to collect) as PART of tax reform? Raise money and restore America’s industrial base at the same time.
No candidate, other than Roemer, is addressing this vital issue–incomprehensible really, if you consider how pro-military the Republican Party is yet doesn’t want to take steps to return all those lucrative defense contracts to the U.S.??? Willing to risk national security rather than end the loopholes encouraging the move off shore? If I didn’t know better I’d think it was a Communist/Pacifist plot! One way to end all wars–make us unable to fight any more. We could wake up one morning and Brazil and China, etc. are just saying no to our defense orders for materiel.
Romney is making a few noises these days–tossing out word China rather gingerly–don’t know if this is just pre-emptive tactic because he realizes if Roemer and/or Trump get into the debates THEY (the only ones) will bring up this issue. Got to take his belated interest with a bit of salt given that (from what I know) Romney MADE his fortune by buying ailing U.S. companies, firing people and finally moving them off shore.
Every Republican should explore–and insist all candidates tall what they recommend doing, if anything, about returning defense materiel manufactore to America’s shores.
Wow! So we are the enemy now?
Speaking as someone who worked for years at the “Brazilian company with a strong history of opposing international security efforts by the United States”, I can confidently say: Bullshit.
Embraer is a proffessional, private company. Sales to USA customers are historically a massive fraction (as in >75%) of the company revenue. Characterizing such a company as “enemy” is absolutely idiotic.
The “Golden Share” owned by the Brazillian government is a token gesture – it exists so the company’s shareholders do not consider selling out to one of the major foreign aerospace conglomerates.
Yes, the Brazillian government is frequently seen posturing and spouting anti-american talk. That country is more afflicted with leftism than this one. But name one ACT by the Brazillian government that actually threatened the USA.
Yeah, thats what I thought.
The author of this piece is either ignorant or intentionally deceiving. Or both.
On a side note, the Embraer product is far superior technically to the Hawker offering. So, are we interested in buying the best materiel for our armed forces or scoring xenophobic nationalism points?
Mr OCapitalista: The words you speak seem to ring with some truth till you
compare the HBCD product with the one from Brazil. Evidently you nothing of
either product and how they stand against one another. The T6 in any of its
variants is a much superior product than the Embraer. Your lack of understanding
when it comes to an airworthy product limits your credibility. Stick to opinions
of how much your government owns and controls when it comes to the manufacturing
facility that does not follow ISO 9001 guidelines.
Even if Embraer is chosen as the winning contractor, and they build in the
continental US as will be mandated, the costs will escalate for production due
to the requirement to repeatedly build to a blueprint specification, and not one
where you grind to fit.
“Yes, the Brazillian government is frequently seen posturing and spouting anti-american talk.”
A good way to spank the Brazilian government would be to deny the contract to Embraer. They should learn that there are consequenses. Our military dealings should be with friendly governments. Might as well give the contract to Venezuela or Iran.
“Yes, the Brazilian government is frequently seen posturing and spouting anti-american talk. That country is more afflicted with leftism than this one. But name one ACT by the Brazilian government that actually threatened the USA.”
I think you contradicted yourself-reread please…
Ocapitalista-the task of argueing with you is not my objective. You mention some valid points-but- the facts are ALSO that Brazil desires to support and do business with known terror sponsoring states -Iran for example- but, most do not want to dig to deep- Heck, the Olympics are coming up…time to back off and act like all is cool- so stay cool Ocapitalista.
They “do business” with Iran eh? What business exactly would that be? Nuclear enrichment centrifuge controllers? No, wait – those are from Siemens… yet I don’t see anyone proposing an embargo on Germany.
Brazillian politicos posture to score anti-american points with the envious, class warfare is deeply ingrained in the culture. They are not dumb enough to actually aid America’s enemies.
Foreigners expect Americans to be clueless about anything that happens outside our borders. This article and your comment support that view in spades.
So-you did not heed my invitation to “stay cool”
O’Capitalista- I suppose you believe there are no
terrorists in Brazil? And, I suppose you believe
Lula de Silva (former President) had no contact
with FARC -and I suppose you don’t know what
Mr. Silva referred to the FARC as- certainly
he never called them “terrorists” did he?
This blog is a joke. Both companies are foreign owned as Hawker Beech is 50% Canadian. By the way, their offering is a Swiss design and the company is in the process of moving their plants to Mexico (they are just now finishing their 3rd).
And they wrap themselves in the American flag?
Oh, and to the hand-wringers worried about the US national security…THESE FRIGGING AIRPLANES ARE TO BE PROVIDED TO THE AFGHAN AIR FORCE NOT THE USAF!
Some of you are missing the point. Brazil builds great aircrafts and are capturing a major niche in the reginal sector of the commercial market. Years ago the US thought that the Airbus will not be able to compete with US made commercial aircraft. Now we know differently. It is the same with cars. The US is in danger of losing its manufacturing edge and engineering talent if we continue to buy foreign hardware for our military services. It seems that some US companies are finding it easy to adopt a foreign design and selling it as a US made. As I mentioned before, we can’t even design and build a simple primary trainer in this country. The USAF is looking to replace the T-38 and the aircrafts considered seemed to be all foreign designs that will be sold by partnering with US companies. The US military hardware development and manufacturing should be in the US, because relationships among countries changes daily and one cannot depend and expect replacement and spare parts if the relationship with that country sours. A good example of the risk or danger of depending on another country for your own defenseis the case of Taiwan. The US is going to deny Taiwan the F-16s it needs for its own defense in order not to offend Main China. Clearly it is not in best interest of the US to depend on foreign sources for its defense needs.
“The US is going to deny Taiwan the F-16s it needs for its own defense in order not to offend Main[land] China”
I’m glad you mentioned that. Taiwan- go figure- investing billions in China on the one hand- and buying US weapons to “defend itself against China” on the other hand- how does that work out. Another “hopey changy” thing?-ha
Explain that to me?
Embraer Could build their plant here in The united States of America if they want the contract….!
Defence of protectionistic mesures, eh? Something strange is happening in the US…
I dealt with embraer a lot in previous job. they are good to work with. but they are throwaway aircraft and all made in brazil. BAD IDEA.
One other problem is that we are giving our technological expertise away to foreign nationals, and ultimately to foreign manufacturers and governments, via the h-1b and similar visa programs.
This also discourages Americans from majoring in scientific, technical, engineering, or mathematical programs.
See: Both parties use immigration and visa programs to put YOU out of work
THESE FRIGGING AIRPLANES ARE TO BE PROVIDED TO THE AFGHAN AIR FORCE NOT THE USAF!
Cancel the whole thing. Who says Afghanistan needs an Air Force. and if they do-let them buy their own. Who will they be fighting- their own people?
Next, they will want a Navy,, and why not build them a Space Program…
I would prefer the money be spent on a high-speed commuter train from the
poppy fields to Kabul…
Your information is different from mine. Our National Guard has nothing to
do with poppy fields, the space program, or rail service. Different contract.