C-17 Lobbying Picks up In Wake of Commerce Dept. ReportFeb 22, 2006 12:53 UTC by Defense Industry Daily staff
With its intercontinental flight range, short-field performance, and ability to carry cargo over 20 tons, the C-17 Globemaster III has become the workhorse of the Global War on Terror. The recent USAF mobility study and 2006 Quadrennial Defense Review believe that capping production at 180 C-17 aircraft and mothballing the line in 2008, adding new air-air refueling tankers, and re-engining the giant C-5 Galaxy transports to improve performance and availability rates will be sufficient to meet air mobility needs within the military’s budgetary priorities. Now the Long Beach Press-Telegram and other media sources are noting a U.S. Department of Commerce report. It concluded that the Pentagon’s plan would have national impacts of about $8.4 billion, hitting 702 suppliers in 42 states, eliminating more than 25,000 jobs nationwide, and forcing production of some other aircraft to move.
Doug Karas, a U.S. Air Force spokesman, said that while the report may outline stark economic impacts for states affected by C-17 job loss, economics alone can’t dictate Pentagon policies. He’s spot on, and the argument about “eliminating” jobs ignores both the fact that the redirected spending will create jobs elsewhere, and the possibility that a rising civil aircraft market may absorb some of these skills. Will this stop lobbying on the C-17′s behalf? No. Do the lobbyists have a viable argument? Possibly. Could they succeed? That’s very possible, too; there’s support in Congress for continued C-17 production.
So what’s their likely approach?
Lobbying for continued production is likely to focus on two tracks. One is the demonstrable fact that many of the C-17s are facing longer and harder usage than anticipated, and will wear out early as the C-141 Starlifters before them did. Indeed, there’s an argument that capping production at a lower rate than actually required will simply exacerbate this problem. The US Senate’s 2005 Talent-Lieberman amendment to H.R. 2863 explicitly addressed this angle, for instance, noting a number of changes in the US military structure that can be expected to generate further demand for C-17 airlift.
The second element builds on the first. It will make the argument that given the documented ripple effects of closing the line and major re-start costs, the concept of “temporary closure” that can be undone if the military needs additional C-17s in the future is neither cost-effective nor practical. Better, goes the argument, to simply produce the number of C-17s required to sustain normal levels of usage in the fleet and give the USA some “surge capability” in response to new demand-generating factors and unplanned contingencies.
In addressing the argument that civilian markets are likely to absorb many of the key skills required to restart production, lobbyists for the C-17 are likely to rely on some of the items in the Commerce Department’s report, as noted by the Long Beach Press-Telegram. These include:
- Boeing would have to spend about $760 million to dismantle C-17 lines in California, Georgia, Texas, Missouri and elsewhere.
- Storing the equipment and tooling would cost $808 million more, while environmental remediation costs for the Long Beach site could bump up the price tag by $36 million.
- The federal government would sustain higher charges if more than a few years pass before the decision to resume manufacture of C-17s was made, since Boeing would likely sell off its 424-acre site in Long Beach. The cost of re-establishing capacity at a new site would be about $3.2 billion, the cost of buying nearly 17 of these high-end military transports.
One can hear the early positioning from US Senator Dianne Feinstein [D-CA], as quoted in the Press-Telegram story:
“The Department of Commerce report makes clear the substantial costs that would be associated with ‘keeping the line warm’ for the C-17 transport… Any termination of the program, even temporary, would have disastrous consequences. The concept of closing the C-17 line temporarily is not practical, as the study suggests… Frankly, this is only more support for the fact that our military will need additional C-17s in the future as we continue to face unpredictable circumstances that require airlift throughout the globe.”
While these lobbying efforts take place, DID has covered efforts underway from the Long Beach/ Los Angeles region municipalities and organizations to try and help Boeing cut costs, in order to provide further justification for continuation.
The C-17 program termination is widely seen as a ‘cosmetic cut’ that is highly likely to be restored by Congress, and the approach of using 702 suppliers in 42 states certainly helps in building such coalitions. As recent events around the Pentagon’s proposed retirement of the carrier USS John F. Kennedy reveal, however, the promise of jobs in the home district is sometimes insufficient to save a program. In the C-17′s case Boeing itself has been lukewarm, seeing a possible tradeoff between more C-17s and a USAF tanker program that could keep its 767 production line alive.
Ultimately, the result will hinge on a combination of pork-barrel politics, Pentagon persuasiveness, and arguments re: military necessity. This is hardly different from any other major American defense program, and the outcome is always in doubt until the final budgets are set.
This much is certain, however – the C-17′s local, state, and Congressional lobbyists will have to work hard in order to save their program.