Phil Trucks: Save Florida jobs: Stop illegal foreign subsidies

In the midst of the confusing battle over health care and questions as to whether the economic recovery plan is actually working, President Obama has the opportunity to claim a critical and unambiguous victory for working Americans: the World Trade Organization has ruled that the European Union’s multi-billion dollar subsidy program to French aerospace giant EADS violates international law. According to the U.S. Trade Representative and other trade experts, this illegal subsidy program helped lead to the loss of as much as 65,000 U.S. manufacturing jobs over the past decades.

In passing the Wall Street and auto bailouts, the Obama administration has

made it very clear that giant corporations that cheat the rules should be held accountable. And in the wake of the WTO decision, Floridians are asking how that edict will apply to the critical aerospace industry that is so integral to the Sunshine state.

At a bare minimum, the administration can and should eliminate the unfair

advantage Airbus gains from using the illegal subsidies to outbid American

companies for government contracts. Anything less would be allowing the French company to continue perpetuating the “fruits of a poisonous tree” as leading labor officials have pointed out.

Case number one for the Obama administration is its $35 billion contract to build a new and improved fleet of tanker refueling aircraft for the Air Force. It’s one of the Pentagon’s most coveted contracts, and will likely determine which of the two companies – Boeing or EADS – will manufacture and maintain tanker aircraft for the next several decades.

Some 44,000 workers are needed to manufacture the tankers. If Boeing wins the contract, more than 1,000 Florida workers would be tapped for jobs to make the plane, with the balance at American companies across the U.S. However, if EADS gets the contract, it would manufacture most of its aircraft overseas, merely shipping the completed sections to Mobile, Alabama for final assembly.

First and foremost, the Pentagon should choose the best aircraft. A quick glance at the two companies suggests that this will be Boeing – the company has manufactured or modified more than 2,000 tankers over 75 years, while EADS has yet to deliver one with a working refueling boom. But the administration and Congress are correct that a vigorous competition between Boeing and EADS will produce the most advanced tanker aircraft at the best price.

But if Airbus/EADS can use the $5 billion in illegal subsidies to finance the A330 tanker, the cause of free and fair competition will become a parody. These illegal subsidies – which have already cost so many Americans their jobs – enable EADS to overcome inefficiencies in its manufacturing and workforce, and price its tanker artificially low, boosting the chances for its less capable tanker design.

In fact, the company used these illegal subsidies to gain an unfair advantage in an earlier controversial competition for the tanker contract, which was overturned when the Government Accountability Office discovered grievous errors. Then Senator Obama expressed surprise that the Pentagon did not end up picking a top-notch American company to build the Air Force’s next generation tankers.

President Obama had reason to be surprised. As the WTO just ruled, EADS

had stacked the deck. And it’s not the first time. At Airbus/EADS urging,the Europeans have effectively barred Boeing and other U.S. contractors from the prized European defense contracts as U.S officials shrugged in response.

Now, it is time for the rhetorical rubber to meet the road. International legal ruling in hand, President Obama now has a clear mandate to level the playing field for the tanker contract and give workers across the country – particularly in Florida – a fair chance.

The Florida Congressional delegation should be bipartisan in its resolve to insist on corporate accountability in this context, particularly when so many jobs in our state are at stake. This would truly represent “change.”

Phil Trucks is Business Manager of Plumbers Local 519 and President of the

Building Trades Association of Broward & Dade Counties.