India saves 30,000 American jobs

by p b    Jun 23, 2011

June 23, 2011
By Ashwani Mishra

C17India will save jobs of nearly 30,000 American workers and throw a lifeline for a Boeing aircraft plant in the US after it committed to buy 10 US transport planes in the largest ever defence deal with Washington.

New Delhi committed in a $ 4.1 billion deal early this month to buy 10 Boeing’s C-17 Globemaster-III transport planes for its military, saving the aircraft, the US military’s workhorse and its factory in Long Beach, California from closure.

Around 4,500 Boeing employees support the C-17 program with 3,700 workers in Long Beach and the rest based out of St. Louis, Georgia and Arizona. In addition, Boeing has a C-17 supplier base of approximately 25,000 people in 44 states employed by around 600 American firms.

“While the US is cribbing of loss of jobs to India, we are not boasting of helping US workers keep home and hearth together,” said Deba Ranjan Mohanty, senior fellow at the Observer Research Foundation, a strategic think tank in New Delhi. “India should use this (of saving US jobs) as a bargain tool strategically”.

Boeing decided to shut the Long Beach plant by 2012 after a terse order by US Defence Secretary Robert Gates last year, to end the transport plane programme citing “wasteful expenditure”.

“The India order will help extend C-17 production into 2014,” Jerry Drelling, Boeing’s media relations manager for the aircraft program told CXOtoday.com in a phone interview. Deliveries of the plane to India will begin in 2013.

obamaIndia’s support for American workers through this deal comes also at a time when US President Barack Obama has been leveling charges that India and China are snatching jobs from American people.

It is not just the US. In the past, India has turned savior for crisis facing countries such as the UK and Russia, when it bought planes and armaments for its military. In the late 1990’s, the Indian government rescued former Russian president Boris Yelstin from an election defeat, after it bankrolled the development of Sukhoi 30-MkI fighter from the factory in his constituency. Since then India has committed nearly $ 15 billion to buy nearly 200 of the twin engine fighter jets and also rescued Russia’s shipping industry.

UK’s military contractor BAE Systems saved hundreds of jobs at its Brough factory in Britain after India bought 66 Hawk aircraft in 2005. The deal took more than two decades to fructify and was followed by an additional order for 51 planes last year.

For decades during the cold war, Russia had been the main source of arms for India and the US, with Moscow underwriting the costs of the military equipment to check US presence in the region.

In the last decade or so, both nations have witnessed rapid growth in their economies and are now able to spend billions of dollars on importing arms. India will spend upwards of $ 100 billion in planes, tanks, ships and guns over the next few years to modernize its armed forces.

At the same time, Western nations such as US and France, see a decline in military spending in their home markets and are looking at nations such as India and south Korea.

“Making military equipment is highly capital intensive. With their markets slowing, American and Western European companies are hard pressed to get orders to keep their plants and jobs intact. For them, India, which has failed to build an indigenous aerospace and arms industry, provides a lucrative market,” said Mohanty.

ashwani@trivone.com
Picture of C-17 airlifter is from their official website. Picture of Barrack Obama is from the website of the US Government.