The Corner

Still more on Boeing, a truly international company

When I wrote on the $35 billion contract to replenish the U.S. Air Force’s aging tanker fleet, few readers objected to John McCain’s role in scrapping Boeing’s proposed sweetheart deal to do the job in 2001. Although Democrats are now trying to make this an issue, McCain should be commended for stopping what would have been a massive waste of taxpayer money — and that’s probably the one issue where conservatives can really agree that McCain has a good record.

The main objection from readers, though, was that the United States should not depend on Airbus (EADS), a “foreign company,” to supply military planes. But now that Boeing is challenging the tanker contract, Business Week provides a piece on Boeing’s own place in globalization:

…Around 60% of the components of all Boeing commercial models are supplied by foreign contractors, and that rises to 70% on its new 787 Dreamliner…The Northrop-EADS tanker will be assembled at a facility in Mobile, Ala., but 40% of its components will be sourced from overseas. The rival Boeing aircraft would depend on non-U.S. suppliers for 15% of its parts.

In an age when Toyota and Subaru are major U.S. domestic producers of automobiles, and Americans hold substantial investments in foreign companies all over the world, the very opposition between “American” and “foreign” companies can be misleading. There is no all-American producer of military aircraft, and there’s no reason we can’t live with that.

What happens if a war threatens our ability to make airplanes in the most economically sensible way? We change our priorities, of course. We proved in World War II that our domestic industry could go from near-zero to 60 overnight. Aviation, the 41st largest industry in the United States in 1939, had become the largest of all by 1945. Before the war, we made 500 airplanes a month. We made 9,000 in the peak production month of March 1944.

Meanwhile, the Business Week article demonstrates the economic wisdom of international trade — it is vital both to Boeing’s profitability and to the jobs that Boeing creates in the United States.

The same principle applies in other sectors of manufacturing as well — in peacetime, the work done abroad serves as the handmaiden of a domestic industry. The negative proofs of this reality abound. When President Bush moved to protect domestic steel with tariffs, it was the Detroit automakers that suffered most — and suffer they have. Our tariffs against foreign sugar cost us more than ten thousand American confectionary jobs between 1998 and 2002. Because we put tariffs on ethanol, American grain and beef prices are through the roof, hurting not only consumers but also the businesses and jobs involved in processing and selling food.

When we protect America’s older and less technically advanced industries, we always do so at the expense of the newer and more advanced ones — those already in existence and those yearning to be born. The only nation in the world truly dedicated to self-sufficiency is North Korea (Kim Jong-Il calls it juche). That’s not an example we want to follow.

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