Shelby rebukes Boeing in letter
Senator: Disavow remarks on Mobile
By GEORGE TALBOT
Business Reporter
Boeing Co. should disavow recent comments that Mobile is a risky location to build military aircraft, Sen. Richard Shelby, R-Tuscaloosa, said in a new letter to James McNerney, the company's chairman and chief executive officer.
"I am writing to share my disbelief and profound disappointment" at statements made by Boeing during an Air Force Association conference Sept. 24, Shelby wrote in a letter faxed to McNerney on Wednesday.
Chicago-based Boeing is competing for a contract to build aerial refueling tankers for the U.S. Air Force against a rival team led by Northrop Grumman Corp. and EADS North America. The Northrop team will assemble its KC-30 planes in Mobile if selected for the work.
Mobile's lack of an aircraft manufacturing industry should be a concern for the Air Force as it evaluates the two bidders, a panel of Boeing executives told reporters at the conference in Washington, D.C.
Shelby called that assertion "ignorant and completely unfounded." He cited Boeing's significant presence in Alabama - the company employs about 2,800 workers in the Huntsville area - and Mobile's place as a finalist for Boeing's 787 Dreamliner assembly plant in 2003.
"What has changed in the last four years that has so drastically altered your perception?" Shelby wrote. "I would hope that you would disavow the offensive remarks about Mobile and that in the future you will ensure that your company avoids publicly demeaning Alabama's highly qualified workforce, including your own."
A Boeing spokesman said the comments were not directed at the skills of Alabama workers but "were intended to describe the technical and schedule risk associated with setting up any new assembly operation versus using an existing and proven assembly line."
Boeing would assemble its KC-767 tankers on its commercial 767 line in Everett, Wash., and modify them for military use at a Boeing plant in Wichita, Kan.
"Boeing offers an existing production facility and experienced tanker workforce," said spokesman Bill Barksdale.
The Air Force is expected to award a $40 billion, winner-take-all contract for 179 new tankers by January.
Risk - particularly the potential for cost overruns or production delays - is a factor in the competition for one of the most lucrative defense deals in a generation.
Northrop and EADS said the KC-30's risk is minimized because of their experience setting up new manufacturing operations, and because the tanker is based on a commercial aircraft, the Airbus A330, that already is in production. Airbus, an EADS subsidiary, assembles the planes in Toulouse, France.
Alabama political leaders have rallied behind Mobile in the wake of Boeing's comments. Gov. Bob Riley scolded the company for insulting Southerners and Rep. Jo Bonner, R-Mobile, demanded an apology.
Sen. Jeff Sessions, R-Mobile, said Boeing's comments "are an argument that nobody will give a lot of serious weight to. Mobile will do a fine job assembling these planes. It's just not going to be a problem."
Aerospace analysts tended to agree, saying Boeing has experienced its own problems delivering tankers to customers in Japan and Italy. Industry officials have consistently named Boeing as the favorite for the tanker contract, but said the company's criticism of Mobile indicates its confidence may be slipping.
"Boeing is beginning to overplay its hand, badly," said Scott Hamilton, president of the Leeham Co. in the Seattle area. "It makes one wonder if they fear the KC-30 really does have a shot at winning the competition on the merits. "
CUTLINES
Sen. Shelby
Excerpts of the letter that U.S. Sen. Richard Shelby, R-Tuscaloosa, sent to Boeing Co. Chairman and CEO James McNerney. Shelby chastised the company for derogatory remarks it made about Mobile's ability to produce military aircraft and invited McNerney to disavow the comments.
