Boeing Lobbies Hill to Buy Converted 767s for Military
by Dan Morgan
Washington Post Staff Writer
Tuesday, November 13, 2001; Page A05
Boeing Co., reeling from cutbacks in commercial aircraft orders since Sept. 11, has sent its top executives to lobby Congress for help in weathering the present economic difficulties by creating a multibillion market at the Pentagon for several of the company's most popular civilian aircraft.
If the aerospace company gets its way, a $317 billion defense bill pending in both houses would tap Boeing's 767 aircraft as the next generation of Air Force tanker, position the 767 to become the military's airborne surveillance platform of the future, and accelerate development of the company's 737 aircraft as the Pentagon's new aeromedical evacuation plane.
To achieve their objectives, Boeing's supporters on Capitol Hill must find a way around a budget impasse that is blocking a congressional agreement on the tanker deal, the central part of the package, according to sources.
Under a plan that has the support of top members of the Senate Appropriations Committee, the Air Force over the next decade would lease 100 converted 767s as part of a scheme to begin replacing the service's fleet of 136 aging KC-135E tankers -- the workhorses that have refueled combat aircraft fighting the war in Kosovo and the current Afghan conflict.
Backers devised the phased leasing idea to enable the Air Force to begin acquiring the planes quickly, while spreading out the annual costs and avoiding having to tap into the Pentagon's strained aircraft procurement budget.
But sources said the leasing plan, which would cost $16 billion to $20 billion through 2012, has run into strong objections from some officials at the Congressional Budget Office and at the House and Senate budget committees. They contend it is a ruse that adds to the long-term costs and violates a 1997 budget agreement.
"This would be a first," said G. William Hoagland, minority staff director on the Senate Budget Committee. "We've got to maintain some discipline. This just isn't the time to be adding in this way."
Senate Budget Committee Chairman Kent Conrad (D-N.D.), whose state's Grand Forks Air Force Base is one of several homes to the U.S. tanker fleet, has not pronounced a verdict on the leasing proposal.
Some congressional analysts said the smaller 757 might be a better candidate as the KC-135's replacement because it could fit into existing hangars.
Nonetheless, supporters of the plan are determined to press ahead.
"We're going to get the money and provide the money for leasing these aircraft," said Sen. Ted Stevens (R-Alaska), ranking member of the Senate Appropriations Committee.
Sen. Patty Murray (D-Wash.) warned last week that "we could lose our ability to build planes in this country" if Boeing's production lines are not kept rolling.
Murray recently escorted Philip M. Condit, Boeing's chairman and CEO, to see Senate Majority Leader Thomas A. Daschle (D-S.D.) and Sen. Daniel K. Inouye (D-Hawaii), who chairs the defense subcommittee of the Appropriations Committee. Murray also took Alan R. Mulally, head of Boeing's Seattle-based commercial aircraft division, to a meeting with Conrad.
In the House, the key role is being played by Rep. Norman D. Dicks (D-Wash.), senior member of the Appropriations defense subcommittee.
Although the Pentagon has not requested funds for replacing the KC-135s, the Air Force has done so. Dicks said the Pentagon's fleet, made up of converted Boeing 707s and having a life span of 43 years, desperately needs replacement.
"This is another one of those situation where we're not doing the modernization that we need to do," he said.
In the House version of the pending defense bill, Dicks used his influence to add $150 million to demonstrate the feasibility of converting one 767 into a tanker. He added $190 million for a test of the 767 as a platform for the next generation of multipurpose airborne surveillance planes, replacing both AWACS and JSTARS, another airborne radar surveillance system.
The House Appropriations Committee is set to take final action on the defense bill today and is expected to send it to the House floor this week.
Boeing officials did not comment publicly, but Dicks said, "I've never seen them as interested in anything as this deal."
In the view of some defense experts, the interests of Boeing and the Pentagon may be dovetailing.
"The platforms are aging, and in many of these areas we're going to have to do something sooner or later," said Gordon Adams, a senior budget official in the Clinton administration who is director of a security studies program at George Washington University. "There's a large mission justification for moving those programs forward."
But under the complex politics of the defense budget, he noted, replacing tankers or airborne surveillance planes often takes a back seat at the Pentagon to pushing more futuristic fighter planes or stealth aircraft.
For Boeing, the stakes could not be higher, officials said. It has recently announced that, due to recession and falling orders, it was cutting a third of its 90,000 employees in the Puget Sound area of Washington state.
© 2001 The Washington Post Company