Magazine

It's No Bailout, Says Boeing


"Inside Boeing (BA)'s sweet deal" (Government, July 7), on the Air Force proposal to lease 100 Boeing KC-767 tankers, asks whether the leasing program is a "stealth bailout by the military or just smart business on both sides." It's no bailout and far more than just smart business. The program addresses an immediate need for the war fighter and brings clear value to the taxpayer. From the earliest stages, the Air Force and Boeing Co. have been entirely clear that there would be no lease unless it was in the best interests of the American taxpayer and fulfilled a pressing need of our military.

The current fleet of KC-135 tankers averages 43 years old, and the risk of a fleetwide grounding is growing. Each tanker is grounded more than one year out of five for expensive depot maintenance. Nearly 40% of the fleet is unavailable at any given time to provide critical in-flight refueling. Our men and women in uniform need to be able to rely on a fully capable tanker fleet.

The KC-767 lease program is an optimum way to meet that need. Boeing has already invested hundreds of millions of dollars to develop this modern aircraft, eliminating the need for a huge up-front government investment typical of other military procurements. Leasing KC-767 aircraft gets 100 essential aircraft to the war fighter five years sooner than a traditional procurement, under terms that all sides agree give clear value to the American taxpayer. That's no stealth bailout. That's meeting a national need.

Mary C. Foerster

Vice-President, Communications

Integrated Defense Systems

Boeing Co.

St. Louis Your story on the business community's views on trade negotiations, "Bush's free-trade diplomacy has Corporate America steaming" (Washington Outlook, July 7), completely misrepresents the Business Roundtable's views on the Administration's trade policy. The Business Roundtable fully endorses U.S. Trade Representative Robert B. Zoellick's competitive liberalization plan. The U.S. was in the trade wilderness for 10 years. And now, with the passage last year of Trade Promotion Authority, Zoellick is pursuing the right strategy in negotiating bilateral and multilateral agreements.

As business executives engaged in trade around the world, we welcome this aggressive approach to negotiating trade agreements. Opening markets will boost the economies of the U.S. and our trading partners, and we believe that bilateral and regional trade talks will create momentum for the World Trade Organization talks. We're not "steaming," as BusinessWeek's headline says. Instead, the CEOs of the Business Roundtable say "full steam ahead" to U.S. trade negotiators.

John J. Castellani

President

Business Roundtable

Washington As for the role that vendors -- such as publishers, record labels, and others -- play in working with Borders Group Inc. (BGP) ("Selling books like bacon," Marketing, June 16), the vendors who serve as lead suppliers do not make any of the decisions regarding which titles we carry in our stores or the way we promote and merchandise the books. As always, these decisions are made by Borders.

Michael G. Spinozzi

Executive Vice-President

Borders Group Inc.

Ann Arbor, Mich. Stan Crock's commentary, "How the U.S. can keep Iraq from unraveling" (News: Analysis & Commentary, June 2), addresses the "most pressing tasks" that focus on infrastructure, authority, and resolve. Military action and targeting in Iraq were limited to strikes intended to neutralize a dictator and remove him from power. There was no need to destroy the industrial or agricultural capability of the nation in order to subdue it.

As one looks around in Iraq, it is very clear that most of the damage to productive capability was green on green, caused by Iraqis looting other Iraqis. The combat forces of the U.S. are here to help, and the Iraqi people are grateful, but they do not wish to be pushed aside in their own country. To do so would be a mistake.

Crock states that an all-controlling foreign power governing Iraq is the best answer to how to manage the issues here. His intentions are well placed but fundamentally flawed. The point of our presence here is not to replace their leader with ours, but to allow the Iraqi people the freedom to choose their own leader. If they choose wrong and fail, then let them do so. As they say here, "it is Allah's will." Tough love is what rehabilitators call this approach, and that is what we need to do for Iraq: rehabilitate their government and country, not replace it.

Crock's description of living conditions in Baghdad is at best badly outdated. Baghdad is teeming with life. Stores are wide open and sell all that you need: fans, air-conditioning units, computers, televisions, DVDs, satellite dishes, and phones. Food markets abound. Bus and taxi services are all-encompassing. Electricity, water, and sanitation improve daily. Young children are in school, and the colleges took exams last week. Fire and police stations are open and functioning, backed by U.S. forces. Civil councils are established and meet daily with U.S. leaders to negotiate and prioritize civil work projects.

Finally, if there is anything keeping people locked in their homes, as Crock stated, it is the steadily increasing afternoon heat.

First Lieutenant John Turner

82nd Airborne Div.

U.S. Army

Baghdad

Editor's note: The writer has been deployed in Operation Iraqi Freedom since February. Because retirees have to pay income taxes on withdrawals from their tax-deferred individual retirement accounts, pension, and 401(k) accumulations, you suggest that such withdrawals, by reducing the government's need to borrow, will "free up more saving for business investment...[and thus] increase overall economic activity" ("A hidden stash?" News: Analysis & Commentary, June 30). But that ignores the implied reduction in private saving when retirees spend their aftertax accumulations on consumption.

The net effect of the cashing-in of such tax-deferred accumulations will be to reduce national (public plus private) saving and thus "crowd out" national investment. Consumption will be greater. Less capacity output will be available over all for business investment, infrastructure, and housing; for enhancing the skill and health of workers; for research that adds to usable knowledge; and for accumulating American-owned wealth abroad by way of a surplus of exports over imports. As a result, the economy's capacity to produce output for our own use will grow more slowly.

Francis Bator

Cambridge, Mass.

Editor's note: The writer is former deputy national security adviser to President Lyndon B. Johnson and is professor emeritus of political economy at Harvard University's John F. Kennedy School of Government. "Can Motown get out of this funk?" (News: Analysis & Commentary, June 23) on U.S. carmakers' declining market share concluded that Motown's "road to recovery will keep getting steeper." A significant reason for this is the increased market share of Japanese auto makers -- the longstanding beneficiaries of protection and huge trade imbalances with the U.S. Meanwhile, Japan's auto makers are comparatively free of the legacy costs and unionization that are facts of life at the Big Three.

American society cannot afford to lose its domestic auto manufacturing industry on this basis.

A.L. Dennison

Tempe, Ariz.


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