Time - Man of the Year/Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso/moy/041392/0413201.000

Text File | 1992-10-19 | 4KB | 82 lines

                                                                                BUSINESS, Page 50

AEROSPACE

Peace vs. Prosperity


The proposed sale of F-15s to Saudi Arabia is forcing Bush into a
no-win decision

By Bruce van Voorst/Washington -- with reporting by Staci D.
Kramer/St. Louis


    Which is a higher priority for America, making peace in the
Middle East or saving jobs at home? That, in extreme shorthand,
is the painful quandary facing the White House as it considers
the sale of F-15 combat jets to Saudi Arabia. If the U.S. makes
the sale, it will contribute to the arms race in the Middle
East. If the deal is scuttled, thousands of American aerospace
workers could lose their jobs. Postwar tensions in the Middle
East and the depressed U.S. defense industry have raised the
stakes on both sides.

    In the latest volley, the chiefs of McDonnell Douglas and
five other defense-industry giants urged President Bush last
week to seek congressional approval quickly for Saudi Arabia's
order for 72 of the combat jets and 100 spare engines. "There
are those who advocate a wait-and-see posture," the CEOs wrote
the President, "but time is something we simply don't have."
Unless the sale (long-term value: $13 billion) goes through, the
McDonnell Douglas subsidiary that builds the planes in St. Louis
and Tulsa will begin a shutdown of its F-15 assembly lines this
summer. McDonnell Douglas spokesman Lee Whitney says this would
eventually cost the jobs of 7,000 employees at his company and
33,000 employees working for 2,000 suppliers in dozens of
states.

    For the Bush Administration, the domestic call to arms
comes at an inopportune moment. Just last January, pro-Israel
lawmakers were able to persuade Bush to withdraw a proposal for
a $15 billion weapons sale to the Saudis. The Administration is
already up to its ears in controversy over its refusal to grant
Israel $10 billion in housing-loan guarantees. As a result, the
American defense industry regards the pro-Israel lobby as its
nemesis in the dispute.

    With thousands of jobs at stake, industry leaders have
launched a hard-sell campaign, dubbed U.S. Jobs Now, which
features a slick video sent to Capitol Hill lawmakers. "We have
a potential customer, and we're trying to make sure that
customer gets a fair shake inside the U.S.," says John
Capellupo, the president of McDonnell Aircraft. The contractors'
argument is that if the U.S. turns down the deal, the Saudis
will go to a European manufacturer. The Saudis have 96 F-15s,
which they began acquiring in the early 1980s, but when the U.S.
refused sales in mid-decade, the Saudis acquired British-made
Tornado jets in a deal ultimately valued at $30 billion. "The
question," says Vince O'Reilly, spokesman for the International
Brotherhood of Electrical Workers, "is whether the Saudis buy
aircraft made in St. Louis or from British Aerospace."

    Proponents of the sale hope that labor-union pressure will
sway recession-conscious politicians. Yet some members of
Congress have been so adamant in their objections that neither
the Administration nor the Saudi government has had an appetite
for the battle so far. Democratic Congressman Mel Levine of
California has collected more than 200 signatures of members who
oppose the sale on the ground that it contradicts the
Administration's own antiproliferation policy. "A lot of people
believe a big weapons sale at this juncture is unwise," says
Toby Dershowitz, spokeswoman for the American Israel Public
Affairs Committee, the leading pro-Israel lobby.

    With the heat so strong on both sides and the symbolism of
the decision so starkly drawn, Bush's choice -- or lack of one
-- on the F-15 sale will be one of the most telling indicators
of the Administration's priorities this election year.