Exit a CEO; enter a new case of cozy ties between Boeing and the Air Force
The Air Force says it isn't retiring the C-5s to buy more C-17s. A spokesman says no decision will be made to cut back or delay any program until the tanker lease deal is done. For now, the Air Force officially supports both the C-17 and the C-5. If the Air Force doesn't cut the C-5 in the next Bush budget, sources say, it will cut the program the following year.
The Air Force clearly has a favorite. It already announced it wants at least 42 more C-17s and will retire 14 C-5s by March 2005. Officials at the Air Force's Air Mobility Command, which runs airlift operations, say they want to modernize the newer version of the C-5 fleet but doubt that upgrading the older version will adequately fix the planes. "When you factor in the age, fatigue, corrosion, and flying hours," says Brig. Gen. Loren Reno, "the questions of risk start adding up." The Air Force has formed a panel, the Fleet Viability Board, to assess whether to modernize the old model C-5s. Col. Francis Crowley, the head of the board, says in an E-mail that the report, due in March, will be unbiased; some C-5 supporters say it will simply endorse the mobility command's view. If it doesn't modernize the remaining C-5s, the Air Force could need 82 more C-17s.
The C-17 program has powerful friends on Capitol Hill, too--thanks to the jobs it provides in many congressional districts. The C-17 supports 10,000 jobs in four states, although most of the work is done in Southern California. Some 700 Boeing suppliers provide 25,000 more jobs in 39 states. "I wish I had a program that has as many jobs associated with it as the C-17," says a lobbyist for a rival defense company.
The Air Force won congressional favor for the C-17 by basing the planes in the states of key lawmakers. In April 2002, the Air Force said it would put C-17s in Hawaii, Alaska, California, Mississippi, Delaware, and New Jersey. It also increased the number of planes stationed in three other states.
Retired Air Force officers say basing the C-17s in Alaska and Hawaii makes no military sense; crews will have to fly all the way to California to pick up cargo. "Those airplanes should be stationed at key ports," says George Chabbott, a retired Air Force colonel who wants to see the C-5s modernized. "Unfortunately, the military gets caught up in politics, and common sense does not prevail. "
The arrangement does make political sense, however. Sen. Daniel Inouye of Hawaii is the ranking Democrat on the defense appropriations subcommittee. Republican Ted Stevens of Alaska is the committee chair. Stevens, a World War II cargo pilot and longtime champion of Boeing, pushed hard for the original tanker lease deal. Boeing executives are important Stevens backers, having given him $22,000 in campaign funds in 2001. The company and its employees spent $1.8 million on campaign contributions and $15.6 million on lobbying in 2001 and 2002. During that time, it won $31 billion in government contracts, according to POGO.