A group of Utah business and political leaders on Thursday said the state stands to lose 600 potential jobs if the U.S. Air Force selects a foreign-based firm instead of Boeing Co. to build a new aerial tanker.
But a spokesman for Northrop Grumman Corp., which is connected with European multinational company EADS in the bidding process, said that if EADS is selected, Utah would gain 220 jobs.
In a telephone news conference Thursday morning, the Utah leaders said that outsourcing of the $40 billion tanker manufacturing contract to EADS rather than Boeing will jeopardize 44,000 potential jobs in the United States. If Boeing loses its bid, Utah could lose 600 jobs and $22 million from the state's economy, they said.
The Air Force is expected to award the contract early in 2008.
The group included Lane Beattie, president and chief executive officer of the Salt Lake Chamber; Salt Lake County Mayor Peter Corroon; Rep. Neil Hansen, D-Ogden; Lorena Riffo-Jensen, chairwoman of the board of the Utah Hispanic Chamber of Commerce; and Ron Kusina, executive director of the Weber Economic Development Corp.
Beattie said selecting EADS, the parent company of European jet-maker and Boeing rival Airbus, would harm U.S. national security and take away jobs from Americans.
"Basically, at stake in this contract is the potential for the United States and specifically for Utah to gain thousands of crucially needed manufacturing jobs, not to mention the overall economic impact to our local communities and our state," he said.
In addition to Boeing, that company's suppliers and vendors that would be affected in Utah are Alliant Techsystems, Edo Corp., GSC Foundries, Metric Precision Machine, Moog Inc. and Parker Hannifin, he said.
"Put together, all of these suppliers will add in the successful manufacture of a critical piece of military equipment. It is something our military will depend on, and we need to ensure that that job is done by a firm both the Department of Defense and the men and women in uniform can trust," Beattie said.
Boeing has 739 employees and 236 suppliers and vendors in Utah, he said. He acknowledged that those supplier companies could become subcontractors through the EADS bid. That fact was confirmed by a spokesman for Northrop Grumman, which is partnering with EADS on its bid.
Northrop Grumman, which has 1,228 Utah employees, contends that its KC-30 tanker would be "a U.S. product" that would be assembled in Alabama using European components and the Airbus A330 airframe. The project would employ 25,000 U.S. workers at 230 companies in 49 states.
Tim Paynter, a Northrop Grumman spokesman for the KC-30 tanker program, said the KC-30 would have 58 percent of its content from the United States. Boeing also would use off-shore components that would be assembled in the United States, he said.
Paynter said Northrop Grumman's Utah employee total would likely remain unchanged, regardless of which bid wins. But, he said, four supplier companies in Utah would add a total 220 jobs if the EADS/Northrop Grumman bid prevails.
He declined to name the companies but said two are in Ogden, one is in Spanish Fork and one is in West Valley City. Two of them supply components for Airbus and two supply engine parts to General Electric Aviation, which also is a part of the bid.
"This is obviously a desperate attempt to twist the facts and mislead the public about this program," Paynter said after the Utah news conference. "There are two U.S. companies vying for this contract and if either company is selected, Utah wins."
EADS North America and the Utah companies that would be part of the supply chain have a total of 1,232 Utah employees, he said.
Northrop Grumman's name was not mentioned during the news conference. Instead, speakers stressed the potential economic impact on Utah and U.S. manufacturing jobs going off-shore should Boeing's bid lose. Boeing's tanker, called the KC-767, would be based on a 767 freighter and feature work in more than 40 states.
"It's not just about 'X' number of jobs going overseas," Kusina said. "It's high-paying, high-tech jobs and an industry critical to our long-term future."
Both Corroon and Hansen referred to EADS subsidies from the European Union. Hansen said EADS has a "shady history" and that its "illegal subsidies" totaling $100 billion already have resulted in 65,000 U.S. manufacturing jobs being moved overseas. U.S. trade representatives have filed a lawsuit over the subsidies with the World Trade Organization, he said."We're very concerned about losing a potential contract to an overseas company," Corroon said, "and we're also concerned that the company may be receiving special subsidies which our local U.S. company will not be receiving which would therefore tilt the playing field against our U.S. company, Boeing."