posted 05-07-2002 07:54 AM            

This weeks issue, May 13, 2000, of US News and World report, has a special investigative report on "War Profiteering". Very interesting read, starts on page 20.

It begins with Senator John McCain blasting the Air Force for adding a $20 billion dollar item to the Defense Appropriations Bill.

They want, of all things, 100 new refueling tankers from Boeing.

What angers McCain is that cost is just to lease them for ten years. After that they go back to Boeing. This is what would happen if you wanted a ton of tankers but couldn't afford to buy them, or felt the cost would attract too much attention.

My untrusting mind asks, don't we have enough refueling tankers now? We did the Serbia war, Afghanistan war and I heard of no tanker shortage.

So, inquiring minds want to know: how come you need 100 more tankers? A big war coming? Are the chemplanes wearing out? Or, are we going to crank up the spraying???

Phil Marie Sr.

posted 05-07-2002 10:14 AM            

"First, no tanker lease deal has been concluded. Congress has merely authorized the Air Force to negotiate with Boeing to replace the 100 oldest tankers, which, built during the Eisenhower Administration, have an average age of 41 years - often twice as old as the air crews flying them.

Negotiations are still underway. The only good and fair deal for America will be one that both improves the capability of our military forces and is affordable to taxpayers. Air Force acquisitions chief Dr. Marvin Sambur stated that the Air Force is determined "to make sure this deal is good for America." So is Boeing. We are saving the Air Force hundreds of millions of dollars up front by investing our own money into tanker research and development and applying best commercial practices.

Second, taxpayers will not "pay twice" for these aircraft. Prior to entering into a lease, Boeing will guarantee the purchase price of the aircraft, a significant portion of which will be paid off during the lease. Boeing has always assumed that the Air Force would retain ownership of these aircraft, in which case the cost to the Air Force would simply be the portion of the aircraft not yet paid for. If the Congress and the Air Force decided to return the aircraft to Boeing, there would be no conversion cost to the Air Force. The real comparison confronting our nation's leaders is whether to begin this tanker replacement process now, through leasing, or wait and begin the traditional procurement process in fiscal year 2011, as originally planned - when the cost of any aircraft will be higher. In fact, it is less costly for the Air Force to begin now with a lease -- giving Congress the option to purchase the aircraft at the end for the residual value -- than to wait and begin purchasing tankers in FY 2011.

Third, refueling tankers are critical to today's high-tempo, high-mobility military. From Desert Storm, to the air campaign over Kosovo or the current war on terrorism, today's military simply cannot deploy or employ without tanker aircraft and their highly skilled crews. They are "indispensable," according to Secretary of the Air Force James Roche and Air Force Chief of Staff General John Jumper."

posted 05-07-2002 02:39 PM               

This new development costs, as well as production costs later on, must be financed by somebody so the workers could get paid before, and Boeing could purchase aircraft components, energy, and all other related items, before then the money from the delivery of the finished product gets in.
If financing is done in the form of the advanced payment from the State, then financing costs are the lowest, because the money came directly from those who work for living and Boeing could directly pay the same workers with, in principle, their own money.
If Boeing is financing the costs by itself waiting the State to pay upon the delivery, then it must increase the price of the final product because the engaged capital must return profit at least greater then that of bank interest rate on the same amount. So those who work must pay more then in the first case. If Boeing must finance development and production costs using external capital then sales price rises still more, because now money lenders (bankers) must be paid for doing nothing.

Leasing is just solution of various shades in-between (advanced payment - low capital cost, deferred payment - higher costs) that creates the cost/ price level depending on financing chain length.
In this particular case, in the sales price Boeing must include worst case scenario, that is that the airplanes are returned before payments are completed. In order to avoid to loose money in the total price Boeing must include the spraying gear dismantling and conversion costs.
Or he must know from the beginning who is willing to pay for conversion of 100 second-hand tankers to third hand airplanes of some other kind.
Or he must know from the beginning who is ready to buy 100 second-hand tankers. And for the slight conversion to the spraying apparatus so the airplanes could spray that powder stuff. Maybe the same company that could be, perhaps, willing to use 100, 41 years or less old tankers as well.
Or this is just usual master business initiative that was born on the opportunity 911 event created.
All in all, leasing is a good way to minimize increased total cost amount visibility in the front of general audience.

As the costs of the product of the same technological level constantly falls (new PCs targeted for the same market tier always costs the same, but they have processing power doubled every 8 months or so) it turns out that the USAF has decided to purchase, basically, old solution for more money, so it could be delivered as soon as possible.

So, the time factor must be the most important one. It just one of the program requirements of the emerging Forever War. That one that includes chemtrails. The end user does not count at all. It is all one and the same.