US totes up job cost from losing F-15 sales
The recent failure of the United States to sell F-15 jet fighters to Saudi Arabia means a big loss of American jobs and a worsening of the US trade deficit, according to frustrated supporters of the sale. The Saudis, faced with intensive lobbying by pro-Israel groups in Congress, withdrew their proposal to buy 48 F-15s, plus spare parts, and announced a contract with Britain for $6 billion worth of Tornado fighters and Hawk trainers.
Saudi Arabia's switch away from the United States on this contract is ``a slap in the face for the US,'' said David Crouch, a senior Conservative member of the British Parliament.
Mr. Crouch emphasizes the importance of the new Saudi position for British industry.
The economic impact of the lost sale in the US is only now being assessed in Washington.
Crawford Brubaker, deputy assistant secretary of commerce for aerospace, said that each $1 billion means at least 25,000 lost jobs. That calculation does not include additional jobs the manufacturing of F-15s would have created due to the multiplier effect.
St. Louis-based McDonnell Douglas estimated the total contract would have exceeded $3 billion. The package with the British included trainers as well, thus upping the number of US jobs lost.
This comes at a time when the US is trying to offset its trade deficit and decrease unemployment in its heavy industries.
While McDonnell Douglas's F-15 production line is based in St. Louis, the plant is supplied by subcontractors in almost all states. An estimated $300 million would have flowed to Massachusetts alone, equivalent to some 15,000 direct and indirect jobs in the state.
But according to State Department sources, jobs did not weigh heavily with Sen. Edward M. Kennedy (D) of Massachusetts, who supported the Israeli position and opposed the sale.
``The longer-run effects are even greater,'' says Joel Johnson, vice-president of the American League for Security Exports and Assistance, a Washington-based group representing military equipment manufacturers.
Mr. Johnson notes that such contracts involve follow-on sales of maintenance services, equipment upgrades, and second-round spare parts, which often total more than the original package.
Other Department of Defense observers emphasize that the sale benefits the Panavia Group, the British-Italian-West German consortium that manufactures the Tornado, and threatens future US exports.
The new orders for the Tornado permit the Europeans to keep their design teams intact while preparing for the next generation of fighter.
The multibillion cash flow from the Saudi sale was needed by Panavia and in effect finances development of its fighter to compete with US-produced fighters in the future.
The timing was critical, since export orders were lagging.
This was not to have been the first sale of F-15s to Saudi Arabia. The kingdom earlier bought a set of F-15s from the US after defeating similar opposition from the Israeli lobby.
A very senior Defense Department official stressed the importance of continuity in the supply of major weapons systems. By reneging on the follow-up phase, US supply integrity is compromised, he said, ``a point which will not be lost to either the Europeans or future customers.''
``The situation is a loss to all concerned -- except the British,'' commented former Illinois Sen. Charles H. Percy, who until this term headed the Senate Foreign Relations Committee.
The US loses dollars and jobs, and the Saudis end up with a more expensive fighter -- one whose deployment is unencumbered by any of the restrictions the US would have imposed.
Both senators from Missouri, the state where F-15 production is based, opposed the sale to the Saudis, but they categorically refused to comment.
US Rep. Harold L. Volkmer (D) of Missouri, in whose district the F-15 plant is situated, also opposed the sale. He explained that he did so because of ``his total support for the state of Israel.''