As the national economy slides, Alabama’s run of economic good fortune continues. The Air Force’s decision to award a $35 billion contract to Northrop Grumman to build aircraft tankers in Mobile will yield at least 5,000 high wage jobs in our state.  Because Northrop Grumman has contracted to partner with a French company, EADS, the deal is another instance of foreign investment spawning new Alabama jobs and tax revenues for the state.

I support the Northrop Grumman contract and will be joining Rep. Jo Bonner in urging our colleagues to resist the political backlash against it.  Some of the opposition is covered green with envy: politicians from Washington State, where the tanker would have been built if Boeing had won the contract, would rather have the jobs in their community and not ours.  Some of the opposition is rooted in festering concerns about the outsourcing of American jobs or about the propriety of bidding out contracts that will benefit a foreign subsidiary.

We can stipulate that our manufacturing job base is eroding and that low wage foreign labor markets have siphoned off work that was once readily available.  But the alliance between Northrop Grumman and EADS is the reverse trend, a relationship that will shift operations from abroad to our shores.  The deal will actually move cargo production that would have occurred in Europe to the United States; in fact, the KC-45A project will generate an estimate of as many as 48,000 direct and indirect jobs in the U.S.—roughly the same amount as the Boeing project would have produced.

Some who criticize the deal argue that our government should contract only with American companies whose production chain is exclusively domestic. It is a reasonable stance if we are talking about the production of widgets or copiers.  But if the government is assessing a bid to assemble a crucial cog in our defense arsenal, the standard should be the excellence of the product.  The overwhelming weight of the evidence is that the Northrop Grumman KC-45A is more versatile and more efficient, and would cost less, than its Boeing counterpart.  The Air Force certainly thought so, and one of the leading independent defense analysts in the country, the Lexington Institute, agrees.

Hyundai, Daimler, Honda, and Thyssen Krupp are economic engines that Alabama would not enjoy if our country had retreated inside a protectionist wall. The dynamism of the modern global economy requires us to further encourage foreign investment.  Already, before this deal, approximately 63,000 Alabamians are employed by foreign based companies, roughly 11% of our manufacturing sector.  Investment, however, is plainly not a one-way street. If we are to attract more of it, an iron-clad rule against government contracting with a foreign subsidiary would be devastating. 

Our economic relationships should be measured by the test of whether they strengthen our own interests.  Much of the trade policy of the past decade fails this test: in my opinion, agreements like CAFTA gained us few new jobs or products, and served primarily to form a low wage magnet that has collapsed our textile and apparels base.  But a contract that grows domestic jobs, and would build a tanker worthy of our military, is a winner.  Therefore, if the effort to derail the Northrop Grumman deal comes to the House floor, I will be standing with my state regardless of the politics in Washington.

(This column was originally printed in the Mobile Press Register.)

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