09.22.03

Pentagon Pushes KC-767 Tanker Lease Over Alternative Proposals; Finds Way To Cut Costs Further

Cantwell Says Details of Letter Shed Light on Value and Urgency of Tanker Lease

WASHINGTON, D.C. – Today the Pentagon reiterated the benefits to leasing 100 Boeing KC-767 tankers and answered critical questions regarding the lease proposal. The Department of Defense also committed to buying 26 planes, saving $1.2 billion, should the lease proposal be approved.

Deputy Secretary of Defense Paul Wolfowitz stated, "The lease schedule delivers needed capability much sooner and avoids significant costs associated with the aging KC-135E fleet. The lease proposal balances the urgent needs of the warfighter with the demands of our other vital programs, while staying within our budget."

U.S. Senator Maria Cantwell, who has been a strong proponent of the lease proposal, stated, "I am pleased the DoD has provided members with additional justifications for moving ahead with the tanker program now. The U.S. Air Force has critical needs we cannot afford to ignore. The Air Force has made clear we cannot risk systemic failures by not moving ahead with new Boeing tankers."

Referring to the additional $1.2 billion the Air Force would save by buying 26 planes, Cantwell added, "Moving ahead with the 100 plane lease provides all the flexibility we need to consider different cost-saving options. The strength of this deal is in the details."

The tanker lease proposal has the backing of the American Federation of Labor (AFL-CIO) and the International Association of Machinists and Aerospace workers.

The Air Force-Boeing lease proposal, which has been approved by three of the four necessary congressional committees, will support an estimated 29,000 direct jobs in more than thirty states across the country – both the primary producers and suppliers. The proposal would also bring upwards of 60,000 jobs indirectly supported by this proposal. The tanker lease will support more than 1,000 jobs in at least seven states, including Washington, Kansas, California, Texas, Michigan, Florida, and Arizona.

In addition to creating jobs in the U.S., the lease proposal provides important protections to ensure that the taxpayer is getting a good deal.

First, we come into the lease knowing that the U.S. taxpayer is getting new 767s at the lowest price that has been offered in 17 years. Second, the contract includes a MFN clause that ensures that the taxpayer will continue to get the best deal offered on this plane through the term of the lease. Third, the contract includes a profit cap to ensure that Boeing is restricted in the extent of its revenues from this deal. Fourth, the Boeing Company is required to go through a full and complete independent audit to ensure that it is living up to its terms of the lease and that the taxpayer is protected. Lastly, since this is a lease, the Air Force can back out of the deal if they find that the 767 platform does not meet its needs.