Friday, 28 March 2008

Changing the Elephant and the Mouse into Dogs

28th March 2008
The Malta Independent - Friday Wisdom

MEPA is the elephant in the room. If nothing else is achieved during this legislature, government has to sort out the MEPA problem.

We cannot, again face another election where MEPA practically decides winners and losers and dominates the agenda, leaving the more substantial and weighty issues out of the agenda during an election campaign. We must not, again have the rush to get as many permits approved in the last week of the campaign.

The elephant must be shrunk to its proper size (maybe the size of a dog is ok) and must be tamed and rendered understandable and friendly to the population at large. We must, at all cost avoid situations where MEPA becomes a jackpot – a get rich quick scheme, where nearly worthless land suddenly turns into a gold mine, as it gets endowed with suspicious development facilities.

Otherwise the difference between
PAPB, PA or MEPA will just be in the acronyms.

There are better ways to do things and, as always, sunshine is the best disinfectant against corruption or suspicion thereof. Let’s allow the sun to shine over the way MEPA operates.

Firstly MEPA must be made to respect the 80 / 20 rule. Eighty percent of the applications submitted to MEPA are simple, straightforward requests which require hardly any processing and which can have little impact on the environment. The undue bureaucracy involved in the processing of such straightforward applications cause a huge amount of consternation to a large swathe of the population. It is the single most important factor that gives MEPA its bad reputation.

To take an analogy from the medical profession it is as if family doctors will have to apply to the Health Department for approval before they can prescribe medicine for a common cold. If MEPA has clear policies of what can and cannot be done in every street of every town and village, why should we not delegate the responsibility for building within such policies to the architect in charge of the development who would need only to submit plans and pay fees without having to wait for approval? Architects would then have to pull up their socks, and just like their colleagues in the medical profession they will have to know very precisely what can and what cannot be done. Failure will be punished by liability claims, imposition of corrective measures and in the end by temporary or permanent suspension of their warrant.

What’s the use of giving architects professional warrants if they cannot take primary responsibility for small developments within MEPA rules?

If the 80 per cent non contentious MEPA workload is handled in this transparent manner – respecting the norms of distributed authority – then MEPA would be able to channel its resources to the processing of the contentious 20 per cent workload, the large projects and other applications that are not covered by published policies and for which architects cannot take prior responsibility without formal approval from a central authority. And it is in such instances where MEPA has to adopt and enforce very rigid corporate governance standards.

MEPA needs to have ( probably already has) a permanent professional executive that processes and recommends such applications falling in the 20 per cent segment, but without having a final say either in approval or refusal.

MEPA would then have to have non-executive boards consisting of people who (in the selection process) are pre- screened to avoid any conflict of interest. Such boards will have representatives nominated from the government, opposition and civil society, as well as a chairman appointed with wide consultation. Such boards would have the authority to approve applications recommended by the permanent executive. They would have the authority to refuse applications recommended for refusal by the permanent executive. They will have authority to refuse applications recommended for approval by the permanent executive. But they will have no authority to approve applications that the permanent executive recommends for refusal.

Appeals from the Board decisions will have to be reviewed by a further independent board that would be composed of independent juries appointed in the same way that juries are appointed in a court of law. Such appeal boards will be presided over by a retired judge or by a president emeritus.

Ultimately the Minister responsible will have to keep the ultimate authority to override decisions and take political responsibility, provided this is done openly and with detailed explanation of the motives for which the Minister feels the need to override established authority. Ultimately the Minister is elected by the people, and he or she has to give an account of their decisions without hiding behind any MEPA veils. Ultimately, ministers are controlled by the electorate through the ballot box. In the end as they say we always get the government, and the ministers, we deserve.

Within such a system disagreement with MEPA decisions will remain but – like football referees outside
Italy – it must be accepted that as long as things are done with robust corporate governance, not everyone has to agree with every decision. We have to have confidence in the system even if we disagree with some decisions.

When MEPA is tamed and gains enough public confidence that it executes its functions diligently and with due respect to corporate governance standards, enough to get it out of the headlines and stop it being a tool in political warfare. Then MEPA would actually start being what it should always have been, rather than the elephant in the room.

What about the mouse? Labour’s Jason Micallef is the mouse in the Hamrun house. For as long as he stays in his position after prejudicing the integrity of the election process for Labour’s new leader by speaking publicly against one of the contestants, Labour will continue to live with a mouse in its house. While MEPA has to be shrunk from elephant size to dog size, the position of Labour’s general secretary has to be filled by someone whose abilities and experience are at least dog size, not mouse size.

Sunday, 23 March 2008

A New Beginning

23rd March 2008
The Malta Independent on Sunday

Let me first admit that I got it wrong, but very marginally so. In my last contribution to this column I had opined, “My best judgement is that the balance remains inclined towards voting out the PN, which is not quite the same as voting Labour in, though this finesse may be lost on many.” As it happened, a statistically non-discernable handful of voters decided that it was better to stick with the devil they knew.

It is my considered opinion that Labour worked a miracle in losing an election that was easier to win than to lose. But if one wants to understand how this was done all one needed to do was to view the performance of General Secretary Jason Micallef on Xarabank to see the impossible becomes possible.

PN General Secretary Joe Saliba could have been excused for putting up a euphoric performance but instead he was a model of humility, acknowledging that although ending on the winning side there is much more for the PN to read in the people’s verdict. In contrast, Micallef was vintage arrogance when he should have been apologetic for guiding the most uninspiring election campaign I can remember. A campaign without proper segmentation of messages and simply based on a crude message that it was time to change so it must be Labour’s turn.

In the last week of the campaign, I received two personalised letter from the Prime Minister explaining why it was in my own interest to vote PN. One addressed me as an operator in the financial services sector and the other as an employer/entrepreneur. Do you know how many personalised letters I received from Labour? Zilch! Do you know how many contacts I had from Labour to ensure that I stick to my professed loyalty to Labour? Zilch! Do you know how many attempts were made to ask me help the party to protect as many as possible the 3,000 first count votes I got from two districts in the 2003 election? Zilch!

Now I voted Labour and I encouraged as many as I could contact to do the same through loyalty to the organisation if not the person. But it was not because there was any undue effort from whoever was running the show at Labour HQ. Presumably their over-confidence assumed that they could do without perceived rebels. While the PN worked with capillarity to extract every single vote, Labour counted their chicks well before Easter!

Now it’s time to move forward! For Labour it is truly time for a new beginning! Voters did not want a government promising a new beginning. They wanted continuity but with a promise of no sleaze, less arrogance and better execution. This message does not seem to have been lost on the Prime Minister when he came to form his new Cabinet. A new beginning is what all genuine Labourites and people who truly believe in the alternation of power now really want.

The first test for Labour is the process it adopts to choose the new leader. The hostile attitude exhibited by Jason Micallef towards George Abela, who had just declared his conditional interest in contesting for the post of leader, and this in front of some one hundred and fifty thousand televiewers, should exclude him completely from any meaningful participation in the leadership contest. This includes the choice of date for holding the contest and any consideration that could be given to widen the voters’ base for making such a momentous decision.

After all, Labour hardly lost the election on
8 March 2008! They actually lost it by the events that happened between 1 May and 15 May 2003. I tried hard to point this out in my writings at the time but I was censored by those who were willing to risk losing the 2008 election rather than face reality.

The decision that Labour takes now for the election of a new leader will have a great bearing on the result of the 2013 election.

It is for this reason that Labour has to tread carefully. Labour needs to be reborn. Its challenge is to find a leader who can keep its core social democratic values while bringing the party into the 21st century where globalisation is the rule of the game. A leader who can understand the need for private initiative, lower taxation and business oriented policies in order to create wealth and then adopt sustainable social policies to ensure that those who cannot, by reason of age or health, participate in the wealth creation process, are supported by the State to keep social harmony and cohesiveness,

A leader who can understand that the biggest social service that needs to be offered to the traditional corps of Labour voters is not just a well-paid productive job but also a whole menu of such jobs to choose from.

A leader who can understand that the best way to amass a majority of voters behind it is not to oppose blindly but to show how execution could be bettered and how freshness will eliminate accumulated sleaze and arrogance. A leader who can show that he can rise to statesman level by co-operating with government wherever there are national issues that are addressed better through bi-partisan approach, especially if such consensus can be traded for other measures to ensure that government treats Labourites with respect and considers them as an integral part of society. The Opposition should force the government to move away from tribal practices in public appointments where Labourites are considered as children of a lesser god.

Easter is life after death. Labour is far from dead but desperately needs a new injection of life. A life that can only come through the choice of a leader who has broad support that goes well beyond the inner ranks that will choose him. If Labour continues to defy public opinion, especially the opinions of the majority who truly want Labour in government next time round, then they can just as well accept that it will continue to be in government at local level and in permanent Opposition at national level.

Let this be the Easter of Labour’s re-birth!

Saturday, 22 March 2008

Labour Chooses its Leader

22nd March 2008

The Malta Independent - Saturday Wisdom

On 5 June Labour will choose its new leader who will then spearhead its next attempt, sometime in 2013, to regain government after a quarter century in opposition.

I sincerely hope that after the event I would not have to write something as prophetic as I had to do after the re-election of Alfred Sant following the 2003 election defeat (see box).

My participation in Bondi Plus last Monday was an eye-opener. It exposed all that is wrong in the inner workings of Labour. On my right I had Anna Mallia (my niece but with a very strong mind and accepting no promptings from any uncle) who remains a persona non grata within Labour because she has strong opinions which she expresses liberally and renders uneasy life for the cosy incumbents at Hamrun who earn their living from the hard-earned donations that Labour’s grass roots regularly make at great personal sacrifice.

On my left I had Toni Abela who seems to carry the mantle of spokesman for the party administration especially those that seem to think they have a right to decide who will be their next boss.

Anna was promoting the need for the party to open itself up, to reach out and connect with the electorate and all those who can influence opinions among the electorate. Toni was more interested in making shows rather than in engaging in meaningful discussion. He was promoting Labour to continue to be antagonistic towards the media and inviting the delegates to look inwardly refusing to open the decision for the choice of new leader to the general party membership even though he admits it would be a good thing. The logic of refusing something that is admittedly good quite frankly escapes me.

How many elections must Labour lose to understand that without reaching out beyond its red base and start appealing to other hues (pink, white and light blue) it can never amass a working majority to accede to government?

It is good that at least this time, unlike 2003, Labour has agreed to prepare the analysis of the outcome of the last election, before proceeding to the leadership contest. I trust that such report gets widely disseminated so that whoever is tasked to elect the new leader, whether the general conference delegates or the wider party membership base, will do so with the benefit of knowing why they got it wrong the last time round. At least Labour will start learning from its own mistakes.

Whoever is tasked to choose the leader has to discharge their responsibility with due regard to the national interest. They must truly believe that they are actually choosing the next Prime Minister. They cannot do so effectively if they continue to defy public opinion on the acceptability to the wider electorate of the candidates contending for the job. The person chosen must be able to engage actively with the spread of the other basis of power spread among society: business leaders, media, church, unions and intelligentsia.

He must be a visionary capable of inspiring the general electorate to a policy of growth and wealth creation which is stimulated by business friendly policies, lower taxes and effective investment incentives. But above all the leader must be a true social democrat who can defend the interest of those members of society who cannot participate in the wealth creation process due to their age or sickness, to ensure these are not left behind and that they take their fair share of the wealth created to maintain social cohesiveness.

The real prospect for Labour to win the next general elections in 2013 will take shape in the period leading to the election of
5 June 2008.

Alfred Mifsud

A Bouquet of Pensieri
30th June 2003
Alfred Mifsud

Events that happened after the election dismayed me more than the result of the election itself. Whoever loves
Labour more than himself must be utterly unhappy that we have not only thrown away an election that should have been clearly won, but even more so that we are prejudicing our chances for the next one too.
For anyone who thinks with his mind not just his heart, the PN must be truly pleased with themselves not only that they won the elections but also that Dr Alfred Sant was reconfirmed Leader of the MLP. Nothing gives them a better chance to look fresh at the next elections when they can present a new leader whilst Labour would present a leader who would be at his fourth asking having lost roundly the last two elections and with a record that he could not manage the first he won when still an unknown quantity.
Alfred Sant has become an easy and predictable target for the PN and they manage his media image with clever style. This leaves true Labourites like me mouth wide open gasping for some political oxygen as Labour media gets elated by fine speeches in parliament rather than devising real winning strategies for next election.

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Friday, 14 March 2008

The People Have Spoken

14th March 2008

The Malta Independent - Friday Wisdom

The people have spoken. But what exactly have they said?

When the difference between the two main parties is as wafer thin as it was and when the winner does not get beyond the 50 per cent mark, in the local context, it is easy to confuse the people’s message. Yet it is utterly important for the people’s message to be understood and heeded.

Objective analysts, like I pretend to be, have particular responsibility; to decipher the message and, in my small way, contribute to help the politicians understand the people’s message in its entirety and not only in the bits and pieces that suit their wishes.

In summary, the people have said that what they really wanted was Labour in government and Gonzi as Prime Minister. As this was an impossible mix, one could not co-exist with the other, the people went for the next best thing. They resented Alfred Sant as Prime Minister more than they resented the PN in government, so basically without giving the PN an overall majority they gave them the minimum possible relative majority.

The message to the PN is clear. The people put the PN in government courtesy of Alfred Sant. Consequently, they should ensure that they govern for all the people and that Labourites must not be made to feel like strangers in their own country. In appointing executives to key roles the Prime Minister has a very big responsibility not to discriminate against people of Labour creed and must be guided strictly by meritocracy. This particularly applies to management of national institutions like the Presidency of the Republic, Mepa, Central Bank and MCESD among others.

I am writing this before Gonzi appointed his cabinet, which will be history by the time this is published. But if Gonzi wants to send a tangible message that he really means to be the government for all people, he should seriously consider picking a leaf from Sarkozy’s book and invite valid MPs from the opposition to join his cabinet. Karmenu Vella could be a Tourism Minister better than anybody in the PN ranks. Carmelo Abela could be as good as any in the PN for Education Minister now that Louis Galea is out.

Certainly tourism and education could do with a dose of cross party support. It is quite probable that neither Vella nor Abela would accept the invitation and prefer to continue with their role in opposition, but the message would have been delivered and appreciated.

The opposition must also heed the people’s message. Twice in a row Labour has forced people’s hand to vote it of out of power, against the people’s own best judgement. Unless Labour wants to threaten its own extinction by being perceived as a party for the local government and national opposition, it must not challenge the people’s will anymore. Its first test well be the choice of the leader and after that it will be the adaptation of its policies.

While the leader is chosen by the party delegates, the approval that matters most depends on the larger electorate. Labour must no longer abuse the loyalty of the party delegates by pushing candidates for leadership with a minimalist approach to change. The only criterion that should guide Labour in choosing its new leader, indeed its new leadership, is the likeability of the chosen persons to as large a majority of the population as possible. Only this can translate itself into Labour’s next victory.

With very, very minor exceptions, few people within the current Labour set-up can pass this test, and it is imperative that the leadership decision is well considered and not rushed to exclude those candidates, the undersigned included, who showed their loyalty to the party by leaving rather than by staying on to participate in the betrayal of Labour’s own interest.

Labour must understand that in this day of scientific marketing and the force of branding, objective cannot be met by trying to sell cola in lemonade bottles; that the wrapping is as important as the content. In permitting Sant to use the power of incumbency to get himself re-elected as leader following the disastrous performance in the 2003 referendum and general elections, Labour condemned itself to having the near impossible task of selling its post-EU accession policy by the same people who used to define EU membership in god forbid (alla hares qatt) terms, basically selling cola in lemonade bottles. While its policies were correct, the people who sought the mandate to implement them lacked the necessary credibility.

So, after choosing the right leadership Labour must proceed to define and refine its policies. No more Pjan ghal Bidu Gdid please! We cannot have a new beginning every time there is a change of government. People want continuity of policies and they want better execution. With so many changes going on in their daily life they do not want to elect a new government who proclaims a new beginning, giving the impression that they are ready to throw everything overboard and start afresh.

In my future writings I will dedicate space to define what policies Labour should adopt to do honour to its basic doctrine of social democracy, while giving the country the best chance to compete effectively and create wealth.

Sunday, 9 March 2008

All Over Bar the Counting

9th March 2008
The Malta Independent on Sunday

And the result is... this is what readers wish to know at this time when votes are still in the sealed boxes awaiting counting. So it is appropriate to revisit my recent writings about the much-awaited election outcome and then express an opinion whether with the election campaign and actual voting behind us I confirm or adjust earlier expressed opinions.

On 16 March 2007, a little less than a year ago, I wrote as follows when analysing the 2007 local elections result:

“The 2003 election also was Labour’s to lose and they did manage to lose it and hand it over on a silver platter to the PN by linking the EU membership issue to the general election result forcing many to vote PN against their wish.

Yes, the next general election is again Labour’s to lose”

On 28 December 2007 I predicted:

“After 21 years of nearly uninterrupted tenure by a PN government I predict that by a hair or by a mile this time it will be Labour. There are innumerable satellite reasons why the majority can be expected to switch its political preference in 2008 but the core reason is the electorate’s fatigue with a PN government.”

On 1 February 2008 I wrote:

“The desire for change among the electorate is so acute that Labour can do nothing to foul it up. Basically Labour cannot lose the election even if they want to. The margin of manoeuvrability for a new government, following EU membership and euro adoption and after privatising practically all that could be privatised, is so limited that whoever is elected cannot do much harm. So the risk of electing a new government, even if perceived as an unproven experiment, is so small that the desire for change can easily justify voting for Labour irrespectively.”

With the benefit of a five-week election campaign behind us and with the actual voting concluded should I confirm or adjust these opinions expressed over the last year?

This campaign wasn’t a straight line. Half way through the campaign, indeed until Tuesday 26 February, I started to form the opinion that the PN had enough momentum behind them to carry the final prize. Until then they had conducted an impeccable two-pronged campaign; on the one hand depicting Labour as a dangerous change and on the other building up their leader’s reputation as the one to deliver the aspired change without throwing away the baby with the bathwater.

The positive prong was a mono-pillar based on the likeability of Lawrence Gonzi, presenting him as hands-on leader who does not accept nonsense and ready to rejuvenate his outgoing tired Cabinet. Everything depended on Gonzi continuing to be perceived as perfectly in control of his team and credible to address in the next legislature the one festering wound that no government seems capable of getting its arms around, ie, MEPA. After having corrected the fiscal deficit Gonzi could hand over the Ministry of Finance to a lesser mortal and take direct responsibility for MEPA - to clean it up and render it more accountable, transparent and efficient. MEPA remains the largest single source of grievances among defectors of the PN.

Just as the PN thought they were home and dry and needed only to support their positive Gonzi strategy by tweaking their negative ‘Sant iffiser inkwiet’ (Sant means trouble) campaign, they slipped into overconfidence and seemed unprepared for Labour’s sudden best-for-last strategy of their campaign.

Suddenly, in the last couple of days of February as Sant was celebrating his 60th birthday, he also launched a Labour counteroffensive, attacking the foundation of the PN’s election strategy. Suddenly the agenda changed from discussing Labour’s educational policy, the surcharge rebate or the removal of tax on overtime. The headlines became Gonzi’s leadership qualities and his ability to keep his team under control. It was not so much whether there was something suspicious about the Mistra project or whether the government had indeed at some stage considered introducing fees for health services, which till now are universally free. It was whether Gonzi’s immediate reaction to these issues and their subsequent handling reinforced or weakened his image of an honest and able leader who does not tolerate corruption even if it meant sacrificing a person like John Dalli until he was formally cleared.

Here Gonzi failed to live up to the strong expectations the campaign had built and the PN’s campaign started to wobble when it mattered most. When it came to taking firm decisions Gonzi was found wanting. When he should have acknowledged having discussed fees for health service when public finances were still weak, but that now that this was overcome he can promise their continued availability without payment, he fumbled through unappreciated niceties that the report was not discussed in Cabinet but in a Cabinet committee. This really cuts little ice with the man in the street who cannot readily perceive the fine difference.

Instead of forcing Pullicino Orlando to resign so as not to put the whole party under a cloud of suspicion, Gonzi zigzagged until finally he had to refer the matter to the Police to investigate. What matters to the public at this stage is not whether there was anything irregular in the Mistra saga but whether Gonzi appeared weak in not using his forcefulness as in the case of John Dalli to show he has zero tolerance for corruption even at the expense of being unfair to one of his own until proper investigations could take place.

So in the eye of the undecided voters who were being tantalised to consider voting PN as Gonzi would bring about

the change they aspired for without having to vote the PN out of power, the story line changed in the last week and half of the campaign.

The last billboards of the campaign summarised it well. The PN had two billboards one for each prong of their campaign. The positive with a re-assuring blue hued Gonzi portrait and the negative one a Sant portrait with a look spelling disaster. Labour also had a two-pronged billboard signoff. The positive one did not feature any Labour personality but a beautiful young lady inviting us to vote for change.

The negative billboard showed capitalised on Gonzi mishandling of the save-best-for last Labour revelations. Could these billboards and the campaign finale they represented impressed the undecided electorate in the day of reflection, or forced them into having second thoughts when they faced the ballot paper?

My best judgement remains that the balance remain inclined towards voting out the PN, which is not quite the same as voting Labour in though this finesse may be lost on many.

Friday, 7 March 2008

Silence is Golden


7th March 2008

The Malta Independent - Friday Wisdom

Especially after a five-week noisy election campaign, silence is truly golden. For voters who have already decided how to cast their vote, this may be a wasted day. But for the few who are still not completely sure whether to vote or how to vote, then the silence of this day may help them find the serenity to perform their democratic right with fortitude and courage.

Now they have heard it all. It is up to voters to focus on what really is important for their own benefit, that of their family but most of all for the benefit of their country to ensure that they do their bit for this country to get the government it deserves. This is the only day, once every legislature, where our politicians have to bow their heads and show that the people’s will is supreme.

Use silence productively and let your mind and your heart lead to answer Kennedy’s call: “ask not what the country can do for you; ask what you can do for your country.”

Properly conducted elections are a victory for democracy. And in the proper execution of democracy there are only winners, no losers. Even those who do not reach their objectives this time, they still have a very important function to perform in a true democracy and those who fail this time are certain winners sooner than they can think while they swallow the bitter temporary rejection by the electorate.

But not everyone agrees that silence is golden. Chief among these is the
US aircraft maker Boeing who together with European Consortium Airbus dominates the world civilian aircraft market. When you travel by air the chances are that you are travelling either on a Boeing or an Airbus outfit. Other players like McDonnell Douglas gave up competing in the civilian aircraft sector and smaller suppliers like Bombardier only have a negligible presence at the small end of the market.

Boeing and Airbus fight fiercely to win civilian airline contracts from the world’s major airlines and regularly accuse each other with unfair competition which quite often escalates to political tirades between
USA and EU that finish even in front of the WTO. Airbus accuse Boeing that they are subsidised by the US government through the military contract they regularly get. Funding research through military contracts gives Boeing a great advantage over Airbus. Boeing in turn accuses Airbus that research which is funded by EU governments and which is only repaid if it leads to regular production by means of an allowance per unit produced represents unfair subsidies which break WTO rules.

Both companies have embarked on very aggressive ambitious programmes to produce newer fuel-efficient jumbo jets to replace and add to the highly successful Boeing 747 fleets which are now nearing the end of their economic life. Airbus has already started delivery of its A380 plane which will be the biggest aircraft to fly the skies. Boeing is working on its Dreamliner, smaller than the A380 but bigger than the 747. Both companies suffered delays in delivery of these mega projects but while Airbus seemed to have turned things around, Boeing is still struggling.

One of the things Airbus is suffering from is the strength of the euro and the weaknesses of the US dollar. Boeing costs are dollar-based whereas Airbus’ costs are euro-based. So by the mere virtue of the fortunes of the foreign exchange markets, Boeing is much more competitive than Airbus. Airbus has to respond by moving parts of its production out of
Europe to the US and Asia so as to switch part of the euro-based cost to a dollar-denominated or dollar-linked economy.

So what are Boeing and Airbus shouting about now that is so much out of the ordinary?

Who’d have imagined that a foreign-built military tanker would be flying under American colours? That is super globalisation.

The plane is a refuelling tanker based on the Airbus A330, which is produced by Airbus. The contract could be worth $40 billion. The big loser, in more ways than one, is the Boeing Co. The principal is the US Defence Ministry.

The big question is whether this means foreign manufacturers can assume they have cracked the huge
US market for other military planes. A harder question is whether anyone can imagine France, for example, buying a US military plane if a French product were even remotely competitive.

US politicians are enraged by the Pentagon’s surprise decision. Boeing, by far the favourite in this competition, now has the odds stacked against it. For one thing, the Airbus might have a European heritage, but the tanker version would be assembled in Mobile, Alabama and would have engines made by General Electric. According to Los Angeles-based Northrop Grumman, which is in partnership with Airbus to build the tanker, the programme would support 25,000 jobs across the United States.

Under the contract, Northrop and Airbus will assemble up to 179 Airbus tankers to replace Boeing-built KC-135s that, on average, are 47 years old. In all, there are more than 500 tankers in service, and replacement orders could continue for many years.

Where did Boeing go wrong? It’s harder to say where it did well. The company had the tanker programme almost in hand when a Boeing executive and an Air Force acquisition official went to federal prison for illegal job negotiations. The company paid a big fine and eventually managed to get back in the game, only to come up with a bid that was a loser. The Airbus offer outperformed Boeing’s in four out of five important measures: mission capability, past performance, price and an integrated fleet assessment.
US politicians are bothered by the idea of a European plane flying missions for the US Air Force, and would love to see this decision turned around.

Airbus has reason to be proud and Boeing has reason to worry beyond the contract itself. The base it will establish in the
US will give Airbus production facilities for its normal civil programme helping it to dollarise its cost and thus become more competitive also in the civil aviation market.

US is beating Europe in technology with its Microsoft, Google, Oracle, Cisco and Ebay. EU is starting to hit back in aviation which the US used to dominate. For Airbus, silence is golden!