“[W]hat we also have been able to do is position ourselves so we can start rebuilding America, and that’s what my plan does. Making sure that we’re bringing manufacturing back to our shores so that we’re creating jobs here, as we’ve done with the auto industry, not rewarding companies that are shipping jobs overseas.” –Barack Obama, Presidential Debate, October 22nd, 2012
President Obama spends a significant amount of his time on the campaign trail touting his supposed successes in preserving jobs for American workers and citing a vaguely-outlined plan to create additional domestic manufacturing jobs. However, when compared to the election year rhetoric, example after example paints a different reality.
One example of this breakdown between rhetoric and reality is the process for granting military supply contracts. In the case of a Light Air Support (LAS) contract for planes that would allow the Afghan Air Force to take over their own defense from U.S. forces, the Obama administration is missing an opportunity to both create American manufacturing jobs and make good on his campaign promise to bring our troops home.
Based in Wichita Kansas, Hawker Beechcraft and its AT-6 LAS aircraft present a valuable opportunity for creating and sustaining domestic jobs while producing a necessary piece of military equipment. Awarding the contract to Hawker Beechcraft is worth 1,400 long-term skilled jobs across 39 states.
Aerospace jobs are a crucial component of our economy; data from the Commerce Department show that it supports U.S.-based jobs more than any other industry in our economy given the skilled labor required. Even in a tough economy, the industry was responsible for 2 million domestic jobs, 30,000 companies, and $85 billion from sales revenue in 2010 alone.
Yet President Obama has remained silent on the issue, contrary to his statements in the second presidential debate, where he emphasized the need for “bringing manufacturing back to our shores,” and vowed to “build manufacturing jobs in this country again.”
The company competing with Hawker for the contract, Embraer, is foreign-owned and operated, and would create the vast majority of jobs in its native Brazil, with just a handful of assembly positions based in the U.S. By backing Hawker Beechcraft, President Obama would send a strong signal to the American aerospace industry that the government is not going to abandon them in favor of outsourcing even more manufacturing to a foreign competitor.
This brings us to the second campaign trail promise the president could be on the way to keeping by granting the LAS contract to Hawker instead of Embraer. Brazil has repeatedly refused to back American foreign policy initiatives, going as far as to ridicule the efforts in Afghanistan they are now trying to earn jobs to support. Granting a contract to a Brazilian entity defies logic while our troops remain in harm’s way and are dependent on appropriate outfitting for the Afghan troops in order to accomplish their mission.
In his debate with Paul Ryan, Vice President Biden emphasized the importance of outfitting and training the Afghan forces, stating, “[I]n fact, in the meantime, what we said we would do, we would help train the Afghan military. It’s their responsibility to take over their own security.”
Despite all of the rhetoric, this administration is failing to take common sense measures to accomplish their stated goals. Rather than making an obvious decision to create long-term American jobs while expediting withdrawal from Afghanistan, the President and Vice President have failed to make a decision while keeping the option open to outsource over a thousand manufacturing jobs.
If our leaders want us to believe they are serious about jobs and national defense, it’s time for them to put their money where their mouth is. This election is about jobs, and the American people will hold them accountable next Tuesday at the polls.
George C. Landrith, President and CEO, Frontiers of Freedom
George C. Landrith has served as the President of the Institute since 1998. He is a graduate of the University of Virginia School of Law, where he was Business Editor of the Virginia Journal of Law and Politics. He had a successful law practice in business and litigation. He served on the Albemarle County School Board. Mr. Landrith is an adjunct professor at the George Mason School of Law.
The most basic obligation of the federal government is to defend America’s economic and national security interests at home, and abroad.
As president of Frontiers of Freedom, I have long called for President Barack Obama to demonstrate his commitment to government transparency by publicly explaining why his Administration abruptly disqualified a proven American manufacturer from competing for a major U.S. military contract, and awarded a no-bid, $1 billion military defense contract to Embraer, a foreign aerospace giant partially controlled by the government of Brazil.
That’s why, after months of silence, our organization was gratified to hear the stunning announcement by the U.S. Air Force that its contract award to Embraer would be reversed, and that its contract process would be fully investigated in what a senior official described as a major “embarrassment.”
Unfortunately, an even greater embarrassment is this: less than 48 hours after the administration’s appropriate reversal of Embraer’s contract, a top U.S. State Department official quietly travelled to Brazil, and seemingly apologized to the Brazilian government for its decision. No such apology was ever issued to Hawker Beechcraft, the Wichita-based manufacturer it abruptly disqualified last fall.
Worse, the administration’s inexplicable move came after the Brazilian government issued a brazen warning to the United States, declaring that its decision to rescind the contract was not “conducive to strengthening relations between the two countries on defense affairs.”
At best, this episode serves as an example of government ineptitude, and a lack of transparency on the part of an administration whose actions have fallen short it’s rhetoric. At worst, this episode highlights a dangerous foreign policy that appeases foreign governments hostile to our national interests – despite our economic and national security needs here at home.
All of this began with a bid by two aerospace manufacturers, American company Hawker Beechcraft and Brazil’s Embraer, for a major U.S. Air Force contract to build aircraft for its Light Air Support (LAS) program to assist in the training of Afghan pilots.
Last fall, the Air Force abruptly, and without explanation, excluded Hawker Beechcraft from the competition. Only after Hawker Beechcraft filed suit with the Court of Federal Claims did the company, and American taxpayers, learn that the Air Force had quietly handed the almost one billion dollar contract – and almost fifteen hundred manufacturing jobs associated with it – to Brazil’s Embraer.
The planes are similar, but that is where the similarities between the two companies end.
Hawker Beechcraft has successfully delivered for the U.S. military, including its construction of aircraft used to train virtually every U.S. military pilot.
Embraer is controlled by the Brazilian government through its ownership of a “golden share,” a clause giving the Brazilian government veto rights over the creation and alteration of military programs, regardless of its impact on Brazilian affairs.
This means that if the Department of Defense were to award this contract to Embraer, the Brazilian government, which has a notably strained and inconsistent relationship with the United States, would have the power to shut down production or maintenance of American defense aircraft at any time, with no notice.
The Brazilian government has repeatedly sidestepped and circumnavigated U.N. trade sanctions against Iran, has embraced Iranian-president Mahmoud Ahmadinejad, and has refused to pursue anti-terror policies within its own borders. Further, Brazil has been a long and vocal critic of the our. War on Terror.
Finally, Embraer was awarded the no-bid contract despite the fact that the US Security and Exchange Commission is investigating the company for potential violation of the U.S. Foreign Corrupt Practices Act, which prohibits companies from making illegal payments to obtain government contracts.
Outsourcing important defense programs through no-bid contracts to foreign countries like Brazil is a threat not only to the American economy, but also to our national security. That is, however, effectively what the Obama administration did.
This is likely the reason for the administration’s subsequent reversal of the contract, and its investigation into the entire matter. Still, Frontiers of Freedom believes that any goodwill the administration may have earned by admitting its procurement mistake, and rescinding its award to Embraer has now been lost amidst its apology tour Brazil.
Americans are right to ask why the federal government is bending over backwards to appease a foreign country, and a corporation it partly owns.
Contradictory statements from Embraer’s partner in the contract bid, Sierra Nevada Corp, are raising new questions about the Brazilian government’s apparent interest in the contract.
Taco Gilbert, Ret. USAF Brigadier General, and a Vice President with Sierra Nevada Corp., is fond of repeating his company’s contention that its aircraft would be made in the U.S., and that “no new jobs are being created in Brazil as a result of this contract.” This contention is at odds with the facts. Sierra Nevada has been forced to admit that only fifty new American jobs would be created under the terms of its contract award.
Americans are also waiting for Gilbert to explain Sierra’s questionable history regarding crony capitalism, pay-to-play, and close ties to scandal-plagued politicians. (Chuck Neubauer, “E-Mails Lay Bare Firms’ Pay-To-Play Links To Lawmaker,” The Washington Times, 6/22/10)
We can only hope the administration’s inexplicable placating of the Brazilian government is not about its retaliatory fears over the potential loss of an order for Boeing Corporation to build a series of jets for Brazil’s Air Force.
According to Reuters, “The cancellation of the Embraer deal caused some senior figures within President Dilma Rousseff’s administration to wonder if it was retaliation for Boeing reportedly falling out of favor, officials told Reuters this week.”
If past is prologue, American taxpayers may never know the answers to these puzzling questions. But, as long as the economic and national security of the American people are stake, Frontiers of Freedom will keep asking.