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Boeing losses Air Force refueler

I would have never thought BA would have lost the bid. I'm shocked we are now going to rely on Airbus for our military!!!

http://money.cnn.com/2008/02/29/news...ce=yahoo_quote

Quote:

Northrop group wins $35B Air Force deal
Larger size of proposed airborne refueling planes helps group overcome Boeing's bid.
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February 29 2008: 11:32 PM EST

WASHINGTON (AP) -- The Air Force on Friday awarded Northrop Grumman Corp. and a European partner a $35 billion contract to build airborne refueling planes, delivering a major blow to Boeing Co.

The selection of Los Angeles-based Northrop Grumman (NOC, Fortune 500) and European Aeronautic Defense and Space Co., the maker of Airbus planes, surprised industry and elected officials. Air Force officials said the larger size of the Northrop-EADS aircraft helped tip the balance in its favor.

Chicago-based Boeing (BA, Fortune 500), which has been supplying refueling tankers to the Air Force for nearly 50 years and had been widely expected to hang onto that monopoly, could protest the decision, though the company said no decision has been made.

The contract to build up to 179 aircraft - the first of three awards worth up to $100 billion over 30 years - opens up a huge new opportunity for Northrop Grumman.

"They don't come along at this scale very often," Northrop Grumman Chairman and CEO Ronald Sugar said. "We do see this as being a very important component of our business for many years to come."

The EADS/Northrop Grumman team plans to perform its final assembly work in Mobile, Ala., although the underlying plane would mostly be built in Europe. And it would use General Electric (GE, Fortune 500) engines built in North Carolina and Ohio.

Northrop Grumman, which is based in Los Angeles, estimates a Northrop/EADS win would produce 2,000 new jobs in Mobile and support 25,000 jobs at suppliers nationwide.

"I've never seen anything excite the people of Mobile like this competition," Sen. Jeff Sessions, R-Ala., said. "We're talking about billions of dollars over many years so this is just a huge announcement."

The deal also positions EADS to break into the U.S. military market.
Tata joins forces with Boeing, others

In after-hours trading, shares of Northrop initially surged more than 5% before retreating to $78.83, an increase of 22 cents. Boeing's stock price fell $2.64 to $80.15.

The Northrop-EADS refueling tanker, the KC-45A, "will revolutionize our ability to employ tankers and will ensure the Air Force's future ability to provide our nation with truly global vigilance, reach, and power," Air Force Gen. Duncan J. McNabb said in a statement.

Air Force officials offered few details about why they choose the Northrop-EADS team over Boeing since they have yet to debrief the two companies. But Air Force Gen. Arthur Lichte said the larger size was key. "More passengers, more cargo, more fuel to offload," he said.

"It will be very hard for Boeing to overturn this decision because the Northrop plane seemed markedly superior" in the eyes of the Air Force, said Loren Thompson, a defense industry analyst with Lexington Institute, a policy think tank. And as the winners of the first award, EADS and Northrop are in a strong position to win two follow-on deals to build hundreds of more planes.

Boeing spokesman Jim Condelles said the company won't make a decision about appealing the award until it is briefed by Air Force officials. Boeing believes it offered the best value and lowest risk, he said.

Stifel, Nicolaus & Co. analyst Troy Lahr said in a research note it was surprising the Northrop-EADS team won given the estimated $35 million per-plane savings offered by Boeing. Lahr estimated the Boeing aircraft would have cost $125 million apiece. "It appears the (Air Force) chose capabilities over cost," Lahr said.

Military officials say the Air Force is long overdue to replace its air-to-air refueling tankers, which allow fighter jets and other aircraft to refuel without landing. The service currently flies 531 Eisenhower-era tankers and another 59 tankers built in the 1980s by McDonnell Douglas, now part of Boeing.

But the new contract has emerged as a major test for the Air Force, which is trying to rebuild a tattered reputation after a procurement scandal in 2003 sent a top Air Force acquisition official to prison for conflict of interest and led to the collapse of an earlier tanker contract with Boeing.

The tanker deal is also certain to become a flashpoint in a heated debate over the military's use of foreign contractors since Boeing painted the competition as a fight between an American company and its European rival. Lawmakers whose districts stood to gain jobs from a Boeing win were pressing this point on Friday.

"We should have an American tanker built by an American company with American workers," said Rep. Todd Tiahrt, R-Kan., who represents the district in Wichita where Boeing would have done much of the tanker work.

In Everett, Wash., a few dozen Boeing workers protested outside a Machinists Union hall holding up signs saying "American workers equal best tankers," and "Our military deserves the best." To top of page
Lockheed leads American defense companies into India

Quote:

Originally Posted by ToiletDuck (Post 330860)

I would have never thought BA would have lost the bid. I'm shocked we are now going to rely on Airbus for our military!!!

http://money.cnn.com/2008/02/29/news...ce=yahoo_quote

There's a little more to the story than face value...Boeing essentially had the whole thing locked up a few years ago, but they got caught bribing an air force acquisition official. John McCain blew the whole thing out of the water...she went to jail, along with a couple of Boeing employees IIRC, and McCain forced the pentagon to un-award the Boeing tanker deal and go to open bid. Airbus was obviously able to compete effectively in the open bid.

Around the same time, Boeing also got caught stealing Lockheed bid info in a government satellite launch deal. Needless to say Lockheed got some extra launches out of that one :rolleyes:

Boeing then instituted a top-down ethics overhaul, led by a hand-picked CEO. The new ethics program wrapped up after the married CEO got caught sleeping with a staffer :rolleyes:

I am disgusted I'll have to refuel behind a frog plane. What have we come to?:rolleyes:

Quote:

Originally Posted by reCALcitrant (Post 331024)

I am disgusted I'll have to refuel behind a frog plane. What have we come to?:rolleyes:

People from Alabama and California are "Frogs"?

Just practice this a few times. "dégagé dans la position de contact"

(rough translation.. cleared to the contact position) (do they still say that?)

Boeing is doing quite alright with sales of widebody aircraft overseas.

The fact that foreign firms like EADS and Rolls Royce are about to open new manufacturing plants in Alabama and Virginia is a good thing.

Without ethnocentrism, globalization is the future!

AL

Globalization takes a dump when Germany tries to establish a superior race. We need home made products for our home made military. I know a lot of the aircraft is outsourced but I still feel I'd rather have an American company supplying aircraft to our American military. So we go to war with a larger country, (pakistan, india, china, Korea, etc.) and Europe is pulled in too. We need replacement parts for the tankers or just general production. Who do you think is going to force priority over those parts or what the factories even produce?

Quote:

Originally Posted by III Corps (Post 331052)

(rough translation.. cleared to the contact position) (do they still say that?)

Stateside we still do...but overseas we have to use the new NATO terminology "Cleared Astern"

Quote:

Originally Posted by ToiletDuck (Post 331090)

We need replacement parts for the tankers or just general production. Who do you think is going to force priority over those parts or what the factories even produce?

Quite simple Mr. Duck. Impound every A-330 on American soil and turn them into "parts queens"

On a personal note, I'm just disappointed. :(

Beyond that, words fail me.

The AF is planning to brief Boeing on March 12 and has asked it to hold off on any appeals until then.

Like 11Fan, I am disappointed. Seattle has been my home for 30 years. We have lived and died by Boeing's fortunes, but always managed to survive. We'll survive this one, too.

This is the local paper's perspective:
http://seattletimes.nwsource.com/htm..._tanker01.html

Much as I like Boeing and their products, they really did this to themselves. They had the upper hand and still had to try and get the contract through dirty tricks.

deleted by poster..........................

Quote:

Originally Posted by blastoff (Post 331112)

Stateside we still do...but overseas we have to use the new NATO terminology "Cleared Astern"

So for the KC-30 and the frogs from Alabama you can say, "Dégagé astern"

<G>

Is there really that much of a difference? Boeing's aircraft components and parts are built all over the world anyway.

Besides, it seems like this is good for the USA;

The EADS/Northrop Grumman team plans to perform its final assembly work in Mobile, Ala., although the underlying plane would mostly be built in Europe. And it would use General Electric (GE, Fortune 500) engines built in North Carolina and Ohio.

Northrop Grumman, which is based in Los Angeles, estimates a Northrop/EADS win would produce 2,000 new jobs in Mobile and support 25,000 jobs at suppliers nationwide.

It's good to have competition...

I don't understand the big deal. You should see the big story that CNN is trying to turn this into. They would both be made here, with parts from all over the world, but the government liked this version better than the Boeing. Either one would mean a lot of US jobs. They picked the product that would work for them the best, and Boeing wasn't the best. I don't subscribe to the thinking they should have picked the lesser product just because it was made by Boeing.

I'm disappointed . . . Good for Airbus, can't blame em', yet I would prefer our military aircraft to be of the American brand. What would happen if the next AF1 was an A380? What kind of message would that send?

Quote:

Originally Posted by ABK MAN (Post 331332)

You mean something like this?

http://blogmedia.thenewstribune.com/...llie/AFone.gif

Quote:

Originally Posted by Radials Rule (Post 331256)

The difference is we'd have to rely on a foreign company for the aircraft. Boeing might outsource quite a bit but they still have the technology any loyalty to America. If it ever hit the fan WWIII style BA could still use that technology on American soil or give us preferential treatment when supplies are thin. Now we're second to France and who wants that?

Quote:

Originally Posted by ABK MAN (Post 331332)

That message has already been sent! The new Marine One (presidential Helo) will be a modified EH-101, which is a European helo.

Quote:

Originally Posted by ToiletDuck (Post 331090)

Globalization takes a dump?

Globalization is the future!

If not for the foreign airlines buying Boeing planes post 9/11, the company would have been in a world of hurt because let's face it, no US airlines were buying new Widebodies. Foreign markets are and will be a huge part of Boeing's future.

I think foreign business from operators like ALL Nippon who have ordered 50 firm B787's or Quantas who ordered 115 B787's is very encouraging.

Boeing will have a very secure future due to its overseas markets. This is what globalization is all about!

Here's a little insight into one very successful foreign company manufacturing in the US.....................

Toyota owns the 3 most efficient Auto manufacturing plants in the world and they're all in Japan. The Toyota plants here in the US are far superior to any US domestic auto plants and the US industry and economy is better off for their presence here.

Toyota operates under a VER or voluntary export restriction. In other words, they volintarily export less Japanese made cars to the US than the US government allows. So, they build more here instead. Also, there is a 65% LCR or local content requirment in all US made Toyotas. So......even the US firms benefit and are even trained to higher standards by Toyota. Toyota builds cars in the US for domestic and international markets.

Americans working for Toyota USA have bettter pay and benefits than their counterparts at US auto firms. Toyota USA is an incredible success story by any standards!

Now...........You do realize the aircraft and engines will be built in the US right?

Does it really matter who's "name" is on it?

Still afraid of globalization and the fact that EADS is coming?

Ethnocentrism is a very short sighted to say the least.

I must say that I'm very pro globalization but then again, knowing that global trade far outstrips global output, who wouldn't be?

AL

Quote:

Originally Posted by ToiletDuck (Post 331090)

Globalization takes a dump when Germany tries to establish a superior race.

I think you're 60 years late.

CE

Quote:

Originally Posted by alvrb211 (Post 331418)

You're misinterpreting what I'm saying. I was making a point that if there's a WWIII all bets are off and things turn internally. I know globalization is the future, at least in times of peace.

Quote:

Originally Posted by ToiletDuck (Post 331371)

Yes, Boeing has the technological know-how. However, if WW3 broke out and made it such that all manufacturing of war machines had to be in house, then there would still be major disruptions. Had Boeing won the contract, I think that the time required for Boeing to retool and arrange for 100% domestic suppliers and contractors wouldn't be much different than the time required for the conversion of existing 767's et al to aerial refuelers.

As for being "second to France", remember. Northrop can cut the Europeans off too.

I don't see anything wrong with this deal.

Quote:

Originally Posted by ToiletDuck (Post 331481)

You're misinterpreting what I'm saying. I was making a point that if there's a WWIII all bets are off and things turn internally. I know globalization is the future, at least in times of peace.

Globalization is the future. But it's also here already!

"If" a world war broke out, the US manufacturing base would be changed to meet the needs of the war effort.

Meanwhile, the only approach is to work with world class suppliers around the world.

Unfortunately, many ethonocentrics don't understand competetive and comparative adavantage and would protect the domestic worker at all cost disregarding inefficiency and technology.

This is not the first time the US military has sought foreign technology!

You might be surprized at how much technology the DOD procures from foreign firms like Rolls Royce and BAE Systems.
BAE Systems do a lot more business with the US DOD than they ever did with Airbus Industrie.

AL

Airbus?? Really, Airbus!?! ***!? Something really stinks now. Airbus's footprint is 51% bigger! Boeing had this thing locked up from the beginning and now this is the Air Force's choice? Makes me ashamed to be in the AF. If it weren't for that medling biaotch a few years ago, this thing would be all over with.

So much for american jobs staying in america(I'm sure Airbus will try to live up to their words on that one). Why don't we just sell the farm now, it's not like it's about what language we speak anyways right? ...it's all about the money.

Good Lord, I think I'm gonna be sick.

Quote:

Originally Posted by alvrb211 (Post 331066)

True that!!! It's a global economy ya'll.....get use to it!!!

atp

Quote:

Originally Posted by USAFAviator (Post 332517)

Why don't we just sell the farm now, ...it's all about the money.

Try to get Euros for your farm...