EADS beats Boeing to US tanker deal

Walter Hinteler
Reply Thu 10 Jul, 2008 01:21 am
georgeob1 wrote:
... it [Airbus] is partly managed by the governments of its respective partners, and local politics drives such decisions. Hamburger is merely making a virtue of their necessity in this area.

I sincerely doubt that you can prove that Airbus is (partly) managed by the governments.

Boeing, btw, is largely funded by NASA, the Department of Defense, various US states ... :wink:
0 Replies
Reply Thu 10 Jul, 2008 09:05 am
Somehow I figured that my last post would smoke you out Walter ! :wink: It's good to see you back on these threads, and I hope you are well and happy.

EADS is partly owned by the German and French governments and has representatives of these governments on its governing boards. The political disputes over the carefully distributed manufacturing and design centers have been well-publicized.

The worn out European canard about Boeing's supposed "funding" by our Federal government doesn't float. Our government has been fairly ruthless in maintaining competition among its defense suppliers. After the Cold War investment in new systems declined rapidly enough to force a substantial consolidation of the industry, and the government did indeed have a hand in that. However, our government sponsorship of "national champions" in international business is pale compared to that of Europeran nations. Indeed the very award of the tanker contract to the Northrup/Airbus consortium is illustrative of that fact. I doubt seriously if anything similar would ever occur in Europe.

Most of Boeing's business involves commercial aircraft, though they are indeed a major defense contractor and they are very adept at finding commercial spin-offs of defense projects (the original Boeing 707 was simply a derivative of the Air Force KC-135 tanker).

Anyway, it's good to see you back. Smile
0 Replies
Reply Thu 10 Jul, 2008 09:22 am
Perhaps Georgeob1 would like to explain why this happened. ---BBB

US Drops Bechtel Project Promoted by Rice, Laura Bush
Series of Woes Mar Iraq Project Hailed as Model
By James Glanz
The New York Times
Friday 28 July 2006

Baghdad, Iraq - The United States is dropping Bechtel, the American construction giant, from a project to build a high-tech children's hospital in the southern Iraqi city of Basra after the project fell nearly a year behind schedule and exceeded its expected cost by as much as 150 percent.

Called the Basra Children's Hospital, the project has been consistently championed by the first lady, Laura Bush, and Secretary of State Condoleezza Rice, and was designed to house sophisticated equipment for treating childhood cancer.

Now it becomes the latest in a series of American taxpayer-financed health projects in Iraq to face overruns, delays and cancellations. Earlier this year, the Army Corps of Engineers canceled more than $300 million in contracts held by Parsons, another American contractor, to build and refurbish hospitals and clinics across Iraq.

American and Iraqi government officials described the move to drop Bechtel in interviews on Thursday, and Ammar al-Saffar, a deputy health minister in Baghdad, allowed a reporter to take notes on briefing papers on the subject he said he had recently been given by the State Department.

The United States will "disengage Bechtel and transfer program and project management" to the Army Corps of Engineers, the papers say. Bechtel, the State Department agency in charge of the work and the Health Department in Basra all confirmed that the company would be leaving the project, but the reasons are a matter of deep disagreement.

The Iraqis assert that management blunders by the company have caused the project to teeter on the verge of collapse; the American government says Bechtel did the best it could as it faced everything from worsening security to difficult soil conditions.

A senior company official said Thursday that for its part Bechtel recommended that the work be mothballed and in essence volunteered to leave the project because the security problems had become intolerable. He also disputed the American government's calculation of cost overruns, saying that accounting rules had recently been changed in a way that inflated the figures.

The official, Cliff Mumm, who is president of the Bechtel infrastructure division, predicted that the project would fail if the government pressed ahead, as the briefing papers indicate that it would. Because of the rise of sectarian militias in southern Iraq, Mr. Mumm said, "it is not a good use of the government's money" to try to finish the project.

"And we do not think it can be finished," he said.

Beyond the consequences for health care in southern Iraq, abandoning the project could be tricky politically because of the high-profile support from Mrs. Bush and Ms Rice. Congress allocated $50 million to the Basra Children's Hospital in late 2003 as part of an $18.4 billion reconstruction package for Iraq. Now the government estimates that the cost overruns are so great that the project will cost as much as $120 million to complete and will not be finished before September 2007, nearly a year later than planned. Some other estimates put the overruns even higher. Kadhim Hassan, general director of the Basra Health Department, said the project would be no more than 40 percent complete once the original $50 million, much of which is going to subcontractors, had been used up. He said little work had been done for months.

While Bechtel pointed to security problems in delaying the project and increasing its cost, the Iraqis generally rejected that view.

"The pretexts given by Bechtel to the Iraqi government to justify its failure in finishing the project are untrue and unacceptable, especially the ones regarding the rise in security expenses," said Sheik Abu Salam al-Saedi, a member of the Basra provincial council.

Western engineers were seldom seen at the project, Mr. Saedi said, adding that it was simply mismanaged. Mr. Saffar, of the Health Ministry in Baghdad, and an Iraqi contractor in Basra both asserted that Bechtel's use of a complicated chain of subcontractors was part of the problem.

Bechtel hired a Jordanian company, for example, to oversee work by local Iraqi construction companies. The American government wasted money by going through such a complex chain of companies rather than working directly with the Iraqis who would do the work anyway, Mr. Saffar said.

"Our counterparts should have full faith in the Iraqi companies," Mr. Saffar said.

That kind of turmoil was far from the minds of planners and supporters when the hospital project was conceived and promoted. Mrs. Bush and Ms. Rice were unwavering supporters, and Project HOPE, a charitable organization, planned to provide at least $50 million in medical equipment.

In a gala for Project HOPE last October, Mrs. Bush praised the project, describing its plan for 94 beds, a state-of-the-art neonatal unit, a linear particle accelerator for radiation therapy and CAT scanners. Ms. Rice added that the hospital "will make a real difference, a life-saving and lasting difference, to the thousands of children and their families."

But like so many other reconstruction projects in Iraq, the hospital was blindsided by changing realities on the ground. Once considered a relatively tranquil section of Iraq, the south has become increasingly dangerous with the rise of Shiite militias in the past two years - so much so, said Mr. Mumm, the Bechtel official, that construction was often forced to shut down.

With those delays came increasing costs as the company absorbed the expenses of housing, feeding and protecting its work force while the work sat idle, Mr. Mumm said. One consequence was that the nonconstruction costs usually referred to as overhead or administrative costs skyrocketed.

Bechtel estimated that as much as 50 percent of its expenses on the project were overhead costs, which were paid with American money separate from the $50 million construction contract.

David Snider, a spokesman for the United States Agency for International Development, the State Department agency in charge of the project, said that technically, Bechtel's contract was not being terminated because the contract did not actually require the company to complete the hospital.

"They are under a 'term contract,' which means their job is over when their money ends," Mr. Snider said. So despite not finishing the hospital, he said, "they did complete the contract."

A confidential report commissioned by the development agency criticizes it for failing to properly account for all of the costs of building a functioning hospital. The agency is likely to face further criticism as it seeks additional money to complete the hospital as part of an Iraq reconstruction program that has increasingly come to be seen as overpriced and ineffective.

The State Department briefing papers describing problems with the hospital project say the United States has been approached by Spain with a potential offer to donate some of the money needed to finish it. If that money is not forthcoming, the papers say, the United States will shift funds now allocated to the crucial oil infrastructure reconstruction to complete the hospital.
An Iraqi employee of the New York Times contributed reporting from Basra, Iraq, for this article.
0 Replies
Reply Thu 10 Jul, 2008 09:55 am
What is your point BBB ??????

There are a number of obvious errors in the article, as well as a few very significant facts whose significance the author inexplicably failed to recognize.

Most of the criticism came from the Iraqi agency and it was obviously motivated by resentment that Jordanian rather than Iraqi subcontractors were hired for the project. The Iraqi economy is only recently recovering, and it is very likely that three years ago when these contracts were originally let there were no functioning Iraqi contractors who could do the job under the security conditions then existing.

The most significant element here is that it was a cost-reimbursable contract (not a "term" contract as the author so ineptly wrote). This means that the U.S. Government Agency (the State Department in this case) exercised day-to-day control of the project and the expenditure of funds. The U.S. State Department inexplicably has for years managed its own construction projects and it is famous in the industry for its near total incompetence. In this context it is particularly significant that Bechtel long ago recommended that the project be terminated and asked to be relieved of it. In addition it is noteworthy that our government is removing the project from State department control and reassigning it to the Army Corps of Engineers - a rather bureaucratic organization, but one with far more competence for this task than the State Department.

I would say that attempting to build a hospital in Basra under the joint management of a still-evolving Iraqi local government agency and the U.S. State department, all in the midst of the very extensive strife there between the Iraqi government and the local Shia militias would be a fairly complex task.

How any of this might logically relate to the previous discussion is, of course a mystery, explainable only by your rather strange penchant for mostly mindless cut-and-paste criticisms that generally have very little to do with the subject being discussed. Perhaps what you were really after was an opportunity to seize the moment for a "gotcha" blow. If so, the effort was ill-conceived and irelevant -- you missed.
0 Replies
Reply Thu 10 Jul, 2008 10:28 am
Bechtel's Artery errors cost more than $1b
These are just a few examples for Georgeob1 to explain:

Bechtel's Artery errors cost more than $1b
Boston Globe


Audit blames contractor and its U.S. overseers for Iraq rebuilding failures
By James Glanz - International Herald Tribune
July 26, 2007

One of the largest U.S. contractors working in Iraq, Bechtel National, met its original objectives on fewer than half of the projects it received as part of a $1.8 billion reconstruction contract, while most of the rest were canceled, reduced in scope or never completed as designed, according to a new report by U.S. investigators.


Timeline of Bechtel - DOE scrubber dealings
Government Accountability Project


Gannett Fleming and Bechtel/Parsons B engineers blamed by safety board for killer ceiling collapse in Big Dig
Posted Tue, 2007-07-10



Whistleblower outs Bechtel et al

0 Replies
Reply Thu 10 Jul, 2008 10:42 am
On what basis do you assume that I have any obligation, need, or interest in "explaining" the unrelated issues with respect to Bechtel National and the Bechtel Construction Corporation in their unrelated dealings with the City of Boston and the U.S. Department of Energy???

Do you even read the stuff you so assiduously cut from your web browser and mindlessly paste here?? I think it is fairly clear that you don't understand it.

What possible connections are there between any of these matters and the issues we were discussing before your ill-conceived intrusions here???

What is your point???
0 Replies
Reply Thu 10 Jul, 2008 10:55 am
What is Bechtel doing?
Bechtel Group Inc.
50 Beale Street
San Francisco, CA 94105
(415) 768-1234


privately held

revenues: $17.4 billion (2004)

employees: approx. 40,000

Chairman and CEO: Riley Bechtel

Founded: 1898


This family-controlled construction and engineering giant dates back to 1898, when 25-year-old Warren Bechtel left his farm in Kansas to work on the grading of railroad lines. He settled in Oakland, California, and built what within about two decades became the largest construction company in the West. The firm worked on major infrastructure projects such as the Hoover Dam (as part of a consortium) and the San Francisco-Oakland Bay Bridge. After the Second World War, Bechtel expanded abroad with projects such as the construction of the 11,000-mile Trans-Arabian Pipeline. At home it built the first electricity-generating nuclear power plant and later the subway systems of the San Francisco Bay Area and Washington, DC. Beginning in 1976 it led the massive Jubail Project on Saudi Arabia's Gulf coast, which involved the creation of an entire city.
During the 1970s, the company was involved in a series of controversies, including major errors in the construction of a nuclear power plant and charges that the company participated in the Arab boycott of Israel. There were later accusations that Bechtel bribed officials in South Korea to obtain nuclear power plant construction contracts.6

The company, nonetheless, maintained close ties to the federal government. In fact, some of its top executives have passed through the revolving door into positions of power. Ronald Reagan chose as his Defense Secretary Caspar Weinberger, who had been working at Bechtel after a prior career in the public sector. Later, Bechtel president George Schulz became Reagan's Secretary of State after the resignation of Alexander Haig. The company also supplied a Deputy Secretary of Energy, W. Kenneth Davis. At least two former CIA directors worked as executives or consultants to the company.

Bechtel made large cuts in its workforce during the slump of the 1980s, but the company bounced back in the 1990s. It was the first U.S. firm to win a construction license to work in China, and it was part of the consortium contracted in 1996 to build a high-speed passenger rail line between London and the Chunnel. Bechtel later was chosen to work on a 30-year modernization of London's subway system. In 2000 residents of Cochabamba, Bolivia staged a revolt against a privatized water system managed by a Bechtel subsidiary, forcing the Bolivian government to cancel the contract (for which the company has sought compensation).

Bechtel has been the co-manager of the Big Dig construction project in downtown Boston that has been plagued by cost overruns and quality problems. In 2003 Bechtel received the first large contract for postwar reconstruction work in Iraq. A June 2003 report by Global Exchange, CorpWatch and 6. Mark Dowie et al., "Bechtel: A Tale of Corruption," Multinational Monitor, May 1984.

Public Citizen described Bechtel's "legacy of unsustainable and destructive practices that have reaped permanent human, environmental and community devastation around the globe.

Bechtel has been cited a number of times for deficiencies in connection with its major projects for the U.S. Department of Energy:

• In May 2000 the Department of Energy fined the company $82,500 for violations of nuclear safety regulations associated with the unplanned exposure of workers at Bechtel's operation at the Hanford plutonium plant in Washington State.

• In June 2002 the Department of Energy fined the company $41,250 for nuclear safety violations at the Idaho National Engineering and Environmental Laboratory (INEEL).

• In November 2003 the Department of Energy fined the company $192,500 for nuclear safety violations at the Oak Ridge and Paducah facilities.

• In January 2004 the Department of Energy fined the company $41,250 for nuclear safety violations at INEEL.

• In August 2005 the Department of Energy fined the company $247,500 for nuclear safety violations at the Oak Ridge facility.

• In September 2005 The Energy Department's Office of Inspector General issued a report finding that the Department paid a Bechtel subsidiary about $4 million in performance bonuses for work that failed to meet DOE's specifications and deadlines.

In 2003 a Bechtel subsidiary was fined $10,000 by the Environmental Protection Agency for "importation of uncertified nonroad engine."
Workplace safety and health record According to OSHA records, since the beginning of 1996 inspections at workplaces operated by Bechtel and its main subsidiaries resulted initially in 18 serious violations with a combined total of $76,699 in fines. Many of these were challenged. After formal and informal settlement, there were 11 serious violations remaining with a combined total of $136,128 in fines.

Bechtel: Profiting from Destruction, June 2003; available at http://www.citizen.org/publications/release.cfm?ID=7249
See the Department of Energy notice at http://www.eh.doe.gov/enforce/eas/ea200006R01.pdf

See the Department of Energy notice at http://www.eh.doe.gov/enforce/eas/EA-2002-02ws.pdf

See the Department of Energy notice at http://www.eh.doe.gov/enforce/eas/EA-2003-09WS.pdf

See the Department of Energy notice at http://www.eh.doe.gov/enforce/eas/EA-2004-01WS.pdf

See the Department of Energy notice at http://www.eh.doe.gov/enforce/eas/EA-2005-04.pdf

U.S. Department of Energy, Office of Inspector General, Audit Report: Use of Performance Based Incentives by the

Office of Civilian Radioactive Waste Management, DOE/IG-0702, September 2005; available online at

Wage and hour compliance record

A database of federal wage & hour violations since January 2000 showed one listing for Bechtel, in which it paid $2,552 for failing to pay proper overtime to workers in Las Vegas.

Employment Discrimination

Back in 1979 Bechtel paid $1.4 million to settle two sex discrimination lawsuits brought by female employees who charged the company with bias in job assignments and promotion. In 1997 a state court jury in San Francisco awarded $1.3 million to a former employee who charged that his termination had been the result of age discrimination.

Bechtel was one of the targets of a series of lawsuits charging racial discrimination brought by African-American workers in the late 1990s against the operators of the federal government's Savannah River nuclear complex in South Carolina. A federal judge denied class-action status to the suits, which reached about 100. Most of the cases were settled out of court.

In December 2004 Bechtel and the Equal Employment Opportunity Commission settled a complaint that had been brought against the company in connection with discriminatory treatment experienced by
an employee of Iraqi origin after the 9/11 attacks.

Labor relations record

Bechtel generally operates as a union contractor, though it tends to use non-union subcontractors. A database of unfair labor practice charges filed since the beginning of 1994 has about 60 entries for cases brought against Bechtel and its main subsidiaries.

Federal campaign contributions to parties and candidates since 2000

Soft money and 527s ....................................................520,000 ......................406,000

Political action committee ............................................345,000 ......................220,000

Individual contributions by top officer .....................................9,000 .................................0
TOTAL:................................................$874,000 ....................$626,000

"Sex Bias: $1.4 Million," Business Week, August 6, 1979.

"SF Jury Awards $1.3 Million Verdict in Age Discrimination Case," California Employment Law Monitor, April 28, 1997.

EEOC v. Bechtel Corp, No. 03-CV-4616 (D.N.J. December 8, 2004); see summary at
0 Replies
old europe
Reply Thu 10 Jul, 2008 10:57 am
georgeob1 wrote:
Indeed the very award of the tanker contract to the Northrup/Airbus consortium is illustrative of that fact. I doubt seriously if anything similar would ever occur in Europe.

Well, we'll have to wait and see who will finally get the contract awarded, right?

However, does the decision by the European Commission to open up bidding for a multi-billion dollar contracts for Europe's Galileo global positioning system count?

US group Boeing to bid for Galileo navigation contracts: report

US aerospace group Boeing plans to compete for contracts connected with the European satellite navigation system Galileo, the German newspaper Handelsblatt said on Monday, quoting a company spokeswoman.

"Boeing is taking part in discussions with a view towards eventually participating in the Galileo project," the spokeswoman said.

The US group had not yet taken a firm decision however, she added, though Handelsblatt quoted other sources close to the matter as saying that Boeing has essentially decided to join bidding for the project.

The Galileo system is designed to compete with the US GPS system by 2013, following approval last week by European lawmakers following several false starts.

European industrial groups which were initially to finance half of the project were later replaced by public souces of funding, but they continue to bid for contracts to be awarded by the European Commission and the European Space Agency.

The project, worth about 3.4 billion euros (5.2 billion dollars) between now and 2013, is to be broken down into six sectors: Satellites, launch vehicles, softwear, ground relay stations, control centres, and overall managment.

Each sector is to be headed by an industrial leader expected to sub-contract 40 percent of the work.
0 Replies
Reply Mon 14 Jul, 2008 05:38 pm
old europe wrote:
georgeob1 wrote:
Indeed the very award of the tanker contract to the Northrup/Airbus consortium is illustrative of that fact. I doubt seriously if anything similar would ever occur in Europe.

Well, we'll have to wait and see who will finally get the contract awarded, right?

However, does the decision by the European Commission to open up bidding for a multi-billion dollar contracts for Europe's Galileo global positioning system count?

Sure it counts. However, one must also consider the recent and past behavior of the various national governments. It is Europe that talks so much about "national champions" in industry, not the United States. How the EU government itself might behave is very hard to predict, given its recent growth into these areas.

That said, I wouldn't assign Boeing much chance of winning in any area in which a European company has comparable expertise in this "project designed to compete with the U.S. geopositioning system". Do you think otherwise??? I would be very surprised indeed if it chose a non-European bidder. Wouldn't you?


Poor BBB. She thinks that a rational response to criticisms of her mindless pasting of irrelevant material, unrelated to the subject under discussion is simply the pasting of even more unrelated material. It is becoming increasing clear that she doesn't read or understand either the commentary to which she is responding or the stuff she pastes here.
0 Replies

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