Monday, May 5, 2008

Is anything 100% Made in the USA anymore?

Two U.S. defense industry giants are head-to-head in a PR war over an Air Force purchase order.

Granted, it is a BIG purchase order and one that was - past tense - worth fighting over in the bidding trenches.

Northrop Grumman, which won the contract, is buying roughly 40 percent of the components for the KC-45 tanker from non-US sources. (Northrop puts it this way: "The Northrop Grumman KC-45A will include approximately 60 percent U.S. content. ")

All the black box stuff, Northrop states, will be "Made in the USA" and the parts, like an Erector Set (http://en.wikipedia.org/wiki/Erector_Set), will be assembled at a plant in Alabama.

The main foreign component, "a commercial A330 jetliner, will be assembled by American workers in EADS's facility in Mobile. The aircraft will then undergo military conversion in an adjacent Northrop Grumman facility, where all of the critical military technology will be added. "

"EADS" is the "European Aeronautic Defence and Space Company EADS N.V. (EADS), a large European aerospace corporation, formed by the merger on July 10, 2000 of DaimlerChrysler Aerospace AG (DASA) of Germany, Aérospatiale-Matra of France, and Construcciones Aeronáuticas SA (CASA) of Spain. The company develops and markets civil and military aircraft, as well as missiles, space rockets, satellites, and related systems. The company is headquartered in the Netherlands in Schiphol-Rijk. The company operates under Dutch law. (http://en.wikipedia.org/wiki/EADS).

Americans, and this scrivener is very much as American, dislike the idea of depending upon a foreign supplier for critical parts. Worse, unlike US industry which, while often government regulated, is for the most part independent of the government, foreign governments play a partnership role in many industries, aviation being but one. Worse yet, some of the players in EADS are governments which are notoriously fickle.

Still, we - in particular the defense industry - have been selling our wares to the world for decades and we, sad to admit, are sometimes less than honorable with our promises of support.

At one point I worked for Tadiran Electronics' Telecom Division here in the States. Tadiran is an Israeli company; the Telecom Division has since be acquired by another Israeli company.

I heard on more than one occasion that "The PBX is a great machine with all the bells and whistles I want or need" and indeed it was a first class phone system, "but I'm worried that there will be a war and I won't be able to get spare parts."

The answer, which I knew to be absolutely true, was that the U.S. operation had enough spare parts to support all our customers anticipated (based on conservative MTBFs) needs for however long a production interruption would last.

While I am not happy about some of Northrop Grumman's partners (I have confidence in others), knowing that the U.S. government is an 800-pound gorilla on EADS' client list I expect that even if EADS overall deliveries slip, Uncle, and Uncle's "employee" Northrop Grumman, will be the first to get what is to be gotten.

Bottom line: Turn around is fair play. We - the US - should be able to buy with some level of confidence from off-shore supplies. On a personal basis, how many of us drive 100% U.S.-made vehicles? How many of us wear 100% U.S.-made clothing? Granted, neither cars nor clothing are "critical to our defense"; petroleum is, and most of the fuel those planes will be carrying will come from outside the U.S. (Our shame is that we still lack alternative fuels for homes and vehicles.)

Boeing may very well have other reasons to complain about Northrop Grumman winning the contract for the next flying gas station, but parts sourcing should not be one of the complaints.

Yohanon
Yohanon.Glenn @ gmail.com

No comments: