As President-elect Donald Trump touts a deal to save Carrier factory work Thursday, a bill passed by the GOP-led House could undermine his campaign promise to create new American jobs.
The Republican-controlled House voted 243-174 last month to effectively block the Treasury secretary from authorizing the sale of about 80 Boeing commercial jetliners to Iran Air, the state-owned airline. The plane sale is part of President Barack Obama’s larger nuclear agreement with Iran.
The Boeing deal could be worth as much as $18 billion and result in the creation of tens of thousands of jobs at Boeing and its suppliers. It comes as Trump announces an agreement to keep more than 1,000 jobs at United Technologies’ Carrier air conditioner unit factory in Indiana from going to Mexico.
“These are some of the highest valued jobs in America,” Howard Rubel, an aviation analyst at Jefferies, said in an interview Wednesday. “People are voting this on an emotional basis as opposed to being logical.”
The House action Nov. 17, which largely fell along party lines, adds to the Iran deal’s overall uncertainty given Trump as a candidate has called the larger nuclear pact “the worst deal ever negotiated.” The proposed measure was received in the Senate this week and read twice before being referred to a committee.
Specifically, H.R. 5711 would block U.S. financial institutions including the Export-Import Bank from participating in the financing of the Boeing planes. It was sponsored by Republican Rep. Bill Huizenga of Michigan, who in introducing the measure said the U.S. State Department previously concluded Iran “is the world’s foremost state sponsor of terrorism” and that the Treasury found it to be “a jurisdiction of primary money laundering concern.”
Back in September, the Treasury Department had approved a license for Boeing and its rival Airbus to sell passenger jets to Iran Air. The financing is seen as a critical element to complete the Boeing sale, and if the House prevails in blocking it, Airbus could benefit since it already has an agreement with a foreign leasing firm to finance aircraft to Iran.
Analyst Rubel estimates the Boeing deal could create between 10,000 and 15,000 jobs for at least one year at Boeing and additional jobs in the supply chain from suppliers of the engines, landing gear and other parts. Also, some of Iran planes could extend production lines that are threatened with downsizing.
“From an economic standpoint, we’re actually hurting ourselves,” said Rubel. “If we’re trying to put America first, the House vote puts America last.”
Still, some House members insist the Boeing commercial aircraft deal to Iran Air is wrong because the national carrier might use the new civilian planes to support terrorism or transport Iranian Revolutionary Guard troops. Moreover, critics of the plane deal say Iran remains a threat to Israel and that the House’s action is needed to cut off Iran’s means of delivering weapons to terror groups such as Hamas and Hezbollah, as well as to the Syrian regime itself.
“The scandal is that there are American companies, there are international companies — Boeing, Airbus — that are now making their own names inextricably linked with terror forever more,” Republican Rep. Peter Roskam of Illinois said on the House floor a day before the vote.
Another critic of the Boeing plane sale maintained that the American taxpayer could be on the hook for the deal so the House bill was necessary.
“Incredibly, under current U.S. law, if we issued a license for Iran Air to purchase aircraft from an American manufacturer and then Iran walked away from its commitment, U.S. taxpayers would have to foot the bill for Iran,” said Republican Rep. Paul Chabot of California prior to the H.R. 5711 vote. “In this case, that could end up to $70 billion on the U.S. taxpayer. Given Iran Air’s multiple unpaid commitments over the years, that outrageous outcome is entirely possible.”
For its part, a Boeing spokesperson said it is following the U.S. government’s guidance in dealing with Iran airlines and will continue to do so. “It’s premature to speculate on the outcome of possible legislation or policy changes,” the Chicago-based manufacturing giant said.
Boeing wants to sell three models of its planes to Iran, including the short- to medium-range narrow-body 737s, the long-range wide-body 777s and a few of its 747s jumbo jets. Most of the Boeing commercial production work takes place in Washington state, which Democratic candidate Hillary Clinton carried in the recent presidential election.
“I don’t know how people sleep at night knowing this would place American manufacturing at a disadvantage, thereby allowing foreign competitors to take away these jobs, but also because we are telling Iran that the nuclear deal is off,” Democratic Rep. Denny Heck said in a release after the House vote. Heck represents the Puget Sound region of Washington where many of the Boeing aerospace jobs are located.
Iran’s aging commercial airplane fleet is among the oldest in the world due to sanctions that have been in place for decades. The average age of Iran Air’s planes now exceeds 20 years and the Tehran government wants the Boeing jetliners due to safety concerns as well as to modernize the national carrier.
“The Republicans not only seek to scuttle that deal with all of the implications, but they do it by stopping an American company from selling a flagship American product around the world,” Rep. Jim Himes of Connecticut said in comments on the House floor prior to the vote.
Added Himes, “If you use the Department of Commerce’s multiplier, the bill they are pushing…would result in 100,000 American jobs not created so that they can continue with this fetish of eliminating a deal, which has made us safer.”