Obama attacks McCain on Boeing deal, trade issues

By Caren Bohan

NEW YORK (Reuters) - U.S. Democratic presidential nominee Barack Obama endorsed on Friday a Pentagon decision to let the next administration resolve a thorny dispute among aerospace manufacturers for a $35 billion Air Force tanker program.

"While it was right for the Pentagon to cancel competition ... for the next generation of tankers, it was wrong for John McCain to reward two of the Washington lobbyists who worked against Boeing with jobs on his campaign," Obama told a conference of machinists and aerospace workers.

Defense Secretary Robert Gates said on Wednesday he was dropping plans to rerun the competition between Boeing Co and a rival team made up of Northrop Grumman Corp and Europe's EADS. Gates said it was time for a "cooling off" period.

Northrop beat Boeing for the deal on February 29. In March, Boeing protested on procedural grounds, prompting what was to have been a do-over by the end of this year. Boeing had threatened to walk away on the grounds that it needed more time to offer a bigger plane.

Obama, a senator from Illinois where Boeing is headquartered, accused McCain, the Republican nominee, of favoring policies that hurt American workers and being cozy with lobbyists who oppose Boeing's bid.

"John McCain just doesn't get it. Just ask your brothers and sisters at Boeing," Obama told machinists and aerospace workers as he spoke to their conference in Florida via satellite from New York.

McCain, a senator from Arizona, led a drive in 2003 to kill an initial $23.5 billion Air Force plan to lease and buy, without competition, 100 Boeing 767s as tankers. He tarred it as a sweetheart deal for Boeing and a "rip-off" for taxpayers.

Throughout 2006, McCain corresponded with senior Pentagon officials about draft versions of the Air Force's plan to seek competitive tanker bids, including his concerns about plans to factor in World Trade Organization disputes over subsides for commercial airliners.

Boeing and EADS subsidiary Airbus -- which would provide the air frame for Northrop's tanker -- have accused each other of using illegal government subsidies to help peddle their wares worldwide.

Taking aim at McCain's trade agenda, Obama said, "When American workers hear John McCain talking about putting country first, it's fair to ask -- which country?"

McCain has not commented on the cancellation of the tanker contest and his representatives have not responded to repeated questions about the matter.

Several former EADS lobbyists later worked on McCain's campaign. Tom Loeffler, the head of a lobbying firm called The Loeffler Group, left the campaign in May after it imposed new rules curbing the involvement of lobbyists.

Obama, in his remarks to the machinists, also pledged to take a tough stance on China's currency and he insisted he supports trade but also a level playing field.

"It's why I will enforce our trade agreements and end China's manipulation of its currency," he said. "And it's why any trade agreement I would support must contain real, enforceable standards for workers."

(Writing by Caren Bohan and Jim Wolf; Editing by Bill Trott)