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Billions are spent to defend 5,000 jobs at Boeing C-17 plant

Wouldn't $2.5 billion be better spent on creating long-term training programs and developing new industries rather than keeping the Boeing plant open indefinitely merely to save jobs in Long Beach?

October 08, 2009|MICHAEL HILTZIK

If you're interested in contemplating the harvest of this country's decades of failed economic policies, failed military policies and just plain failed politics -- and who isn't? -- I know just where to send you.

It's a Boeing aircraft factory on the outskirts of Long Beach Airport, where a brigade of 5,000 veteran workers can turn out 16 state-of-the-art C-17 military cargo planes every year.

This is the last factory in America capable of building large military aircraft, and it's headed for extinction.

In approving a $626-billion military budget for fiscal 2010 this week, the Senate threw in $2.5 billion for 10 more C-17s to be built at the plant. But the appropriation resembles a last desperate round of chemo prescribed for a patient whom the doctors aren't sure can be saved -- or should be. (The corresponding House bill calls for three planes, so the versions will have to be reconciled.)

The Air Force didn't actually request the planes approved by Congress; the service isn't sure that it needs any more C-17s beyond the 213 it already owns or has on order. Defense Secretary Robert M. Gates wants to kill the program. So does Sen. John McCain (R-Ariz.), who launched an unsuccessful last-ditch attack on the appropriation.

President Obama has spoken in favor of the program, yet he hasn't told Gates to stand down, either.

Boeing says its current order book of 28 planes will keep the Long Beach assembly line running until July 2011. The House's three planes might extend that by a couple of months, the Senate's 10 planes by perhaps a year. Then it's over. The company says reopening the line once it's been mothballed would cost billions -- among other factors, the workforce would disperse, suppliers move on to other contracts, and tools and equipment get dismantled. So it argues that the government should keep the orders flowing against the chance that it will decide it wants a lot more C-17s after all -- something many defense analysts say is likely -- and to give the company more time to scare up foreign sales.

"We're at a no-kidding decision point," Tommy Dunehew, Boeing's vice president at the plant, told me this week.

Yet although the need to make a decision about the program's future is pressing, the decision-making process is muddled beyond measure.

The Government Accountability Office complained last November that not only had the Pentagon not decided on its optimum mix of C-17s and older C-5 cargo planes (which have more capacity and longer range but lower reliability), it hadn't even figured out how to decide. It wasn't even sure how to balance the cost per ton of cargo hauled by one plane versus the other, the GAO said.

Nor has the country confronted an important economic question: Does it make sense to operate the Boeing plant indefinitely merely to preserve a few thousand jobs in Long Beach and at suppliers around the country? Or -- if jobs are the real goal here -- might it be better to spend the same money on creating long-term training programs and developing new industries?

"The same amount of money would create more jobs if it were spent on education, health or clean energy," says Robert Pollin, a University of Massachusetts economist who analyzed the effect of military spending in a paper for the Institute for Policy Studies. "You'd create more jobs not just next year, but in the next 10 years."

That's especially true given that the C-17 workers are, shall we say, "mature." Their average age is about 56, so even under the best conditions they're closing in on retirement. It's not a rap on these crackerjack manufacturing hands to say they're not the wave of our industrial future.

But diverting government money from its incumbent recipients is never a political slam dunk. A $626-billion annual investment "has a lot of constituencies behind it," Pollin says.

Indeed, congressional debates over military procurement, while customarily couched in the vocabulary of national security, invariably reek of the pork barrel.

Boeing has been smart enough to source the C-17's parts from 650 suppliers in 44 states. So it's unsurprising that the Senate shot down McCain's effort to pare down the program this week by a 2-1 margin. Congressional love for the C-17 cuts across party lines and fiscal ideologies. Among its most stalwart defenders are California's Democratic Senators Dianne Feinstein and Barbara Boxer. (The latter, burnishing her liberal cred, cites the plane's suitability for "humanitarian" missions.)

Another fan is GOP Rep. Dana Rohrabacher, whose Huntington Beach district is just down the road from the C-17 factory. Rohrabacher proclaimed his refusal to be "stampeded into spending hundreds of billions of taxpayer dollars in a precipitous manner" when the subject was the banking bailout, and voted against the stimulus package this year.

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