Key Points
- The Pentagon has considered awarding a defense contract to Airbus, a Dutch/French company.
- Airbus has been involved in multiple international scandals, including one tied to China.
- Critics believe we should award all defense contracts to domestic companies for national security reasons.
The top 5 defense contractors in the world are American companies: Lockheed Martin, Raytheon Technologies, Boeing, Northrop Grumman, and General Dynamics. Billions of dollars in defense spending run through these red, white, and blue companies every year.
Now, the 12th largest defense contractor in the world is Airbus, Dutch and French in origin, and, for some reason, in the running to receive a billion-dollar defense contract from the Pentagon despite a rap sheet of shady international dealings, many involving our number one adversary.
…if you thought “China,” you’re correct.
In the Pacific McGeorge Global Business and Development Law Journal, Lindsay McCarl makes a strong case for why it’s important to keep defense contractors “in house”:
“There are a number of reasons why the U.S. Government should prefer domestic companies when awarding defense procurement contracts. During a major conflict in which U.S. national security may be compromised by awarding contracts to companies controlled by hostile countries, the U.S. armed forces could secure the supply of goods with domestic producers. In addition, where jobs are at stake in a global recession, the U.S. government could award more defense-related contracts to domestic suppliers to attempt to maintain, or even expand, the industrial base.”
Pretty straightforward logic. And that’s before bringing into the equation the fact that Airbus got popped for an international bribery scandal —the largest of its kind to date. Here’s an excerpt from the Department of Justice press release:
“Airbus SE (Airbus or the Company), a global provider of civilian and military aircraft based in France, has agreed to pay combined penalties of more than $3.9 billion to resolve foreign bribery charges with authorities in the United States, France and the United Kingdom arising out of the Company’s scheme to use third-party business partners to bribe government officials, as well as non-governmental airline executives, around the world and to resolve the Company’s violation of the Arms Export Control Act (AECA) and its implementing regulations, the International Traffic in Arms Regulations (ITAR), in the United States. This is the largest global foreign bribery resolution to date.”
So, Airbus paid bribes to foreign officials, including Chinese officials, in order to obtain and retain business.
Does it get worse? Of course it does.
According to the American Conservative, “In addition to Airbus’s ties to illegal bribes across the world, note that the United States won a $7.5 billion arbitration case in the World Trade Organization (WTO) against the European Union for ‘providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers.’ As U.S. Trade Representative Robert Lighthizer put it, a 15-year investigation ‘confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies.’ It was the largest award in WTO history, and more importantly, it was because of the harm that Airbus and the European Union caused American manufacturers.”
We can’t put our national defense in the hands of another country —especially one who cozies up to our enemies, commits international bribery scandals, and damages the state of American manufacturing.
