Boeing’s Iran deal: Jobs claim is murky at best

In December of 2016 Boeing announced that a new sale of 80 aircraft to Iran Air would “support nearly 100,000 U.S. jobs.” Those numbers seem murky at best. 

Since the implementation of the Iran nuclear agreement in January 2016, government-owned Iran Air has flown at least 134 flights from Tehran to Damascus, even while this route does not appear in Iran Air’s formal booking system. The Foundation for Defense of Democracies' research shows that these flights are unlikely to be civilian flights, but rather airlifts of weapons and military personnel that enable Syrian President Bashar al-Assad to continue waging war against his own population.

That’s the main reason the Treasury Department should block the deal, which it can do if it finds that Iran Air is in fact engaging in this activity. But does Boeing's job-creation justification hold water? Recent history suggests that while the deal will surely add revenue to Boeing’s coffers, it would not create new U.S. jobs to fill these orders. Rather, they would be filled by an increasingly automated production line.

Boeing produces the 737 and 777 variants at its Renton and Everettfacilities, respectively, in the state of Washington. Orders for the popular 737 have caused a backlog of an estimated 4,430 aircraft, meaning that customers have to wait several years for the planes they order.

Production at the Renton facility increased in 2013 from 35 to 38 planes per month. Last year, production at the facility stood at 42 planes per month, with a goal of 47 planes per month in 2017. Boeing has even announced a goal of 57 planes per month at the facility by 2019. Rather than witnessing an increase in the number of jobs in these facilities, from 2013 to 2017, Boeing data shows that it in fact cut 15,000 jobs in Washington since 2013 (from 86,000 to 71,000), increasingly relying on automated production lines.

Did those jobs go to other states or shift to different Boeing facilities? Boeing’s annual reports indicate that the answer is no. From January 2013 to January 2017, Boeing cut 25,643 jobs even while orders have continued to come in. Yet, during this period, Boeing’s annual revenue increased from $81.7 billion in 2012 to an annual revenue of $94.6 billion in 2016.

Reportedly, Boeing will soon announce an additional 1,800 job cuts in Washington. It appears that Boeing is increasing its revenue while reducing what it spends on labor in the U.S. Of note, in the last year, Boeing has inked a deal to create a new plant in China to support the manufacturing of 737 aircraft.

Some of Boeing’s subcontractors may benefit from the deal in the next decade, but the windfall from a sale of planes to Iran Air will not accrue to U.S. workers.

The more important question Boeing must answer is how much profit it will seek while ignoring Iran Air’s malign activities that enable Assad’s atrocities. By providing Hezbollah and the Assad regime with continued access to advanced weaponry and fresh troops to sustain the war against the Syrian people, Iran Air is instrumental in facilitating war crimes and atrocities against the Syrian civilian population.

Iran Air’s ferrying of weapons to Hezbollah is helping to cement the terrorist group’s role as a state within a state inside Lebanon. Moreover, it would be helping exacerbate the already dire refugee crisis triggered by the civil war. 

Iran Air has also contributed to the Islamic Revolutionary Guard Corps (IRGC) military buildup along Israel’s border with Syria. Were a new conflict to begin between Israel and Hezbollah, the IRGC could open a new front on the formerly quiet Israel-Syria disengagement line and lead to a direct Israel-Iran military showdown. 

Iran Air was originally sanctioned by the U.S. Treasury Department because it provided material support to the IRGC and Iran’s Ministry of Defense, which in turn was blacklisted for its proliferation activities. When it was designated in 2011, Treasury pointed out that, “Commercial Iran Air flights have been used to transport missile or rocket components to Syria.”

Even though the Obama administration lifted the designation as part of the Iran nuclear deal, there is no evidence that this activity has ceased. Treasury should revoke Iran Air’s license before the first plane is permitted to be transferred.

Boeing’s claim that the sale to Iran Air will support 100,000 U.S. jobs appears to be in conflict with Boeing’s shrinking U.S. employment numbers. But its shareholders, the Trump administration and the American people should also be asking how many more brutal deaths of Syrian, Lebanese and other civilians a sale to Iran Air would “create or sustain.”

A deal may increase Boeing’s annual profits but little would fall into the hands of its employees. Even if it did, what would be the cost to Boeing’s reputation and to our values as a country?

Toby Dershowitz is senior vice president for government relations and strategy at the Foundation for Defense of Democracies (FDD), a think tank focused on national security and foreign policy. Tyler Stapleton is deputy director of congressional relations at FDD.