Just got back into town last night after spending a week in Detroit and Canada visiting my mother and extended family. Here’s what’s up in Motown:
- Several City Council members are under investigation by the FBI for allegedly taking bribes
- The mayor is under indictment for perjury
- The school district is about $400 million in the hole
- Sales for the Big Three automakers for the first six months of the year were the lowest in about a decade
Oy! At least the Tigers are playing better.
Sure, Wichita has some issues. But I think we probably do more things right than wrong. Sometimes it takes a little reminding to remember that.
Lots of comments from politicians around the country following Wednesday’s ruling by the GAO that upheld Boeing’s protest that the bidding process on the tanker contract was flawed. The best, though, might have come from Alabama Gov. Bob Riley. He reportedly was in an editorial board meeting at Bloomberg News headquarters in New York when word of the decision came down. His response: “Oh, God, that’s not good.”
Earlier, he told the editorial board that it would take “an absolute nutcase” to think Boeing’s tanker bid was better than the one offered by Northrop Grumman/EADS. Apparently Gov. Riley has already met members of our Congressional delegation.
Most of the complaints from the Gulf Coast, where Airbus plans to build the new tanker, concern the delays that will be caused by Boeing’s protest. There also are complaints that politics are playing a role in the bidding process. Let’s see: Potential $100 billion contract being debated in Washington, D.C. with tens of thousands of jobs attached. And there are politics involved? I’m shocked, I tell you. Shocked.
Kansas and Washington lawmakers were doing the squealing when Boeing originally lost the contract. Now it’s Alabama’s turn. Just remember that this thing is a long way from over.
Timing is everything. The exact minute (12:23 p.m.) the Associated Press moved a breaking news alert that the GAO had upheld Boeing’s protest on the aerial tanker contract, Northrop Grumman sent out a news release announcing the “Groundbreaking ceremony for the U.S. Air Force KC-45 Tanker Production Facilities” in Mobile, Ala. As Lee Corso would say, “Not so fast, my friend!”
Today’s decision means there may not be a KC-45. And if there is, it probably won’t fly anytime soon. If the Air Force does what the GAO suggests, reopen the bidding, it will be some time before any new tankers are flying. That’s unfortunate because the losers are the men and women who have to fly and service the ancient tankers the Air Force currently uses.
Before Boeing gets too giddy about today’s decision, remember that none of this would have happened if Boeing hadn’t screwed up the initial tanker deal in 2003.
Folks in Washington, D.C., are getting ready for the GAO’s report on Boeing’s tanker protest. Todd Tiahrt’s office sent out an e-mail late Monday night saying the decision is expected Wednesday or Thursday (Thursday is the deadline).
According to the e-mail, the GAO will only say whether it sustained, denied or dismissed the protest. It will post the decision on its site. It will not release a copy of its decision publicly, but will release it to the attorneys for both sides. It is up to them to release a redacted version to the public. No word on how long that might take.
If Boeing’s protest of the contract, which was awarded to Northrop Grumman/EADS, is denied, expect Congress to take steps to void the contract. The GAO decision will only be Act II.
Reuters moved an interesting tanker story today, saying the Air Force has conceded that Boeing’s KC-767 would be cheaper to operate over the life cycle of the plane. The Air Force had initially said that the KC-30, the winning tanker bid put forth by Northrop Grumman and the parent company of Airbus, would be cheaper.
Northrop officials still maintain that their tanker is better, and that cost is only one of several criteria. That may be true, but you know the Boeing folks are looking for anything to show that the Air Force did a poor job in evaluating the competing bids.
All this comes about a week before the GAO’s deadline to rule on Boeing’s protest over the contract. The next few days will be very interesting.
So the city went ahead and hired Pat Salerno as city manager. His first day on the job is July 14. Seems like his hiring will be a plus for the business community. His track record on commercial and retail development is good, and he guided the construction of an arena in Sunrise, Fla., his previous gig.
Plus he’s not George Kolb. Many, many people in the business community felt Kolb was an obstacle to business growth and to development (one developer had an epic rant about Kolb and little trees a few years ago during an interview at The Eagle.) Kolb, of course, had the misfortune of following Chris Cherches, who had a legacy of getting projects done during his 18-year tenure. My guess is Salerno is built more in the Cherches mold, though I don’t think he will last 18 years.
An interesting letter to the editor from the general manager of the Holiday Inn Select over the weekend. Peter Berman pointed out that it wasn’t fair for the city to subsidize a competitor — the new owners of the Broadview want $25 million in aid from the city — with what are essentially his tax dollars.
His letter underscores the problem that occurs whenever the city gets into the corporate aid business: The playing field is no longer level. That’s part of what brought objections from Bill Warren when the City Council was interested in spending millions of dollars on an entertainment venue in Cowtown (Warren later dropped his objections and the city later delayed its plans for a theater).
The city has a legitimate interest in seeing the Broadview succeed. It needs another convention-quality hotel for downtown. But at what point does its interest unfairly unburden other businesses?
The Wichita American Marketing Association held its Marketer of the Year luncheon this afternoon at Century II. Sonia Greteman, CEO and creative director of the Greteman Group, was the winner. It wasn’t much of a surprise because the slide with her picture and the tag “Marketer of the Year” appeared on the big screen moments before the announcement. Whoops.
That slight glitch aside, it was a nice event with a good turnout (including Pizza Hut founder Frank Carney, who was there to support Terry Newman of Papa John’s, one of the nominees.) The keynote speaker, Jeff Manning of the Got Milk? campaign, was interesting and entertaining. I didn’t know that Oreo — the consummate milk partner — actually embossed its cookies with the “Got Milk?” logo.
As city officials continue their hasty courtship of Pat Salerno to become the next city manager, it’s hard to believe that the downtown arena project is not accelerating the speed of the search.
Eagle reporter Brent Wistrom’s piece in Sunday’s Eagle on Salerno elicited both praise and criticism from folks who worked with Salerno in Sunrise, Fla. That’s not unexpected for any public official who has served in the same capacity for 18 years. The one shining highlight on Salerno’s resume is the BankAtlantic Center, the home of the NHL’s Florida Panthers. The arena has sparked tremendous growth in the area.
I’m guessing that Wichita officials would like the same thing to happen around Intrust Bank Arena. Right now, no one is really steering that ship, and the arena opens in about 18 months. Is a vibrant arena neighborhood worth the price of bringing in Salerno and some of his baggage? We’ll find out.
You get the feeling that the financial investigation concerning European Aeronautic Defence & Space Co. (EADS) is going to turn into a Boeing-Darleen Druyun type scandal. The latest chapter is unfolding in Paris, where former EADS CEO Noel Forgeard is being held for questioning by financial authorities. Forgeard is one of 17 former EADS or Airbus executives being investigated for dumping stock just before the company announced further delays in the A380 in 2006. After the announcement, EADS shares fell 26 percent.
Forgeard is big-name guy in Europe. He was knighted by Queen Elizabeth II in 2004 and served as industrial adviser to the French prime minister for more than a decade.
The news Tuesday that Airbus is expected to receive $18.2 billion from European governments to help develop the A350 should bring another round of protests from those opposed to Airbus winning the tanker contract. Government subsidies were one of the arguments used by Boeing supporters when EADS, the parent of Airbus, and Northrop-Grumman were awarded the tanker contract. They argued that Boeing is at a disadvantage because Airbus is subsidized by European governments. EADS CEO Louis Gallois (a name that just rolls off the tongue) argues, of course, that Boeing also is subsidized, mentioning specifically money the company receives from the state of Kansas.
By the way, the GAO is expected to release its decision on Boeing’s protest over the contract by the middle of June. No matter how the GAO rules, this issue is a long way from over.
The GAO (Government Accountability Office) has begun hearings on Boeing’s protest of the tanker refueling contract. The hearings, in Washington, D.C., began Monday and are expected to last all week. A ruling by the GAO — which is not binding but normally followed by Congress — is expected by June 19.
Most folks following this whole affair think the GAO will uphold the original contract, which was awarded to Northrop Grumman and Airbus. But no matter how the GAO rules, this dispute is far from over. If Boeing loses its protest, expect Congress to step in to overturn the contract.