Did John McCain deny Boeing a $100 billion contract for an Alabama endorsement?


As he stumps for President, Senator John McCain likes to brag about how he kept Boeing Inc. (NYSE: BA) from winning a contract to build Tankers -- in-flight refueling aircraft -- for the Air Force in 2004. Last week, the Air Force announced that the winner of the contract was Boeing's arch-rival, EADS, parent of Airbus which is based in Toulouse, France and Northrop Grumman (NYSE: NOC).

That decision is sitting very well with the governor of Alabama, where Northrop Grumman is based. Republic Governor Bob Riley endorsed McCain a mere three days after the Air Force contract was announced. The EADS-Northrop tanker, based on the Airbus A330, will be built in Mobile, AL, where The Associated Press reports it will produce 2,000 new jobs, and support 25,000 jobs at suppliers nationwide.

Is it just a coincidence that Riley endorsed McCain so soon after that contract was awarded? Boeing supporters in Congress may be wondering and they are angry with McCain "for scuttling an earlier deal that would have let Boeing build the next generation of Air Force refueling tankers." AP reports that Boeing now will miss out on a deal that it says would have supported 44,000 new and existing jobs at the company and suppliers in 40 states.

Boeing supporters are suggesting that voters can make their feelings known about McCain in November. AP interviewed Rep. Norm Dicks, D-Wash who said, "I hope the voters of this state remember what John McCain has done to them and their jobs." Washington would have been home to the tanker program and gained about 9,000 jobs.

AP also reports that Rep. Rahm Emanuel, D-Ill. said, "Having made sure that Iraq gets new schools, roads, bridges and dams that we deny America, now we are making sure that France gets the jobs that Americans used to have. We are sending the jobs overseas, all because John McCain demanded it."

Did McCain have anything to do with awarding the Tanker contract to EADS-Northrop? If so, what was his role? Did the endorsement from the Alabama governor have anything to do with the decision?

Some voters who feel that the Air Force should hire a U.S. company, rather than a French one, will use their vote to send McCain a message regardless of the answers to these questions. But I certainly hope to learn more.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He is writing a book on Boeing and has no financial interest in the securities mentioned.

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