Unbelievable - Airbus beats Boeing for tankers

H

HornsInTheHouse

500+ Posts
This is one the of biggest news surprises I've ever seen. Boeing and Airbus were bidding for a $40 billion, 179 air tanker contact that had previously been illegally funneled to Boeing (and thwarted by Senator McCain, good for him). Given the level of antipathy towards Airbus and the fact that Airbus has never won a major defense contract in America, Boeing was heavily favored.

Airbus put up a tankerized A330 that had greater abilities than the tankerized 767 but also cost more. I guess cost is little barrier in today's American defense contracting world.

Bizjournals, also heard on NPR
 
I just read the story on Yahoo/Reuters 5 minutes ago. Everyone at both Boeing and Airbus(-Northrop) must be saying "Torbush!", that is an amazing turn of events especially given the previous (nullified) award to domestic manufacturer Boeing. There will be lots of talk about this contract award for years to come, and it gives Airbus very prominent visibility as one of the Pentagon's (soon-to-be) largest contractors.

To get the award, the Air Force presumably modified their selection criteria. I wonder what those changes were.

[Elmer Fudd voice/]Vewwy intewesting.[/Elmer Fudd voice]
 
Ok, I could be wrong about this but Northrop is NOT Airbus. They are two completely seperate companies. The issue here is that Northrop won the contract over Boeing and that Northrop uses Airbus frames to produce the final product.
That is a difference I believe. I wonder if Boeing could ever negotiate to be a suppler of frames to Northrop.
 
Right, well Airbus teamed with Northrop for political purposes in their contract offer. Airbus will build the airframe in Europe then send it to Alabama where it will be tankerized by Northrop
 
EADS will manufacture the aircraft in France, and assemble it in Alabama.

Key: "Boeing had previously landed the Air Force tanker order in 2004 but lost it in an ethics scandal."
 
it's a Northrup Grumman aircraft but the airframe is airbus. they are a sub to NG which is an American company. the parts to the aircraft can be fabricated at any US airline maintenance shop that flies the A330.

Boeing screwed the pooch. probably should have based it on the Dreamliner instead.
 
What caused Boeing"s problems> what started them on this downslide?
I always thought they were a good solid company
 
bob
thanks for the explanation. How unfortunate for Boeing that the problems are something beyond their control.
Back to the tanker bid. So did the cost of the piece Airbus is making make it cheaper enough than what Boening could offer that the bid was that much lower?
 
Boeing and Airbus were bidding for a $40 billion, 179 air tanker contact that had previously been illegally funneled to Boeing (and thwarted by Senator McCain, good for him).
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So you support foreign companies coming to the US and taking away american jobs when these foreign companies are operating on an unfair playing field anyway due to their substantial government support...good for you and good to know mccain will do everything to support american interests.
 
if the better plane is partially made outside of the US, then Boeing needs to step up and make a better plane. Maybe you're cool with supporting our troops with inferior products. Guess that is where you and I differ.
 
Further evidence that competition is good. AIrbus offers a better product here and despite a bit more cost won the contract based on the better product. GOod for them, and good for the companies needing tankers. Now Boeing will go and build a better tanker.
 
Northrop Grumman is/was a major U.S. defense contractor which built the B-2 Spirit stealth bomber. And the tanker conversion phase jobs will be based in Alabama, so this award will still create a lot of U.S. jobs (although probably not as many as a Boeing award would have). There are many different angles that the USAF could have considered in awarding the deal to Northrop-EADS:

..1.. With Lockheed and Boeing being the only two active aircraft airframe manufacturers remaining in the States, the USAF probably wanted to make sure Northrop had enough business to remain a viable future manufacturer...
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(From Wikipedia) Northrop Grumman intends to bid for the U.S. Air Force's next-generation strategic bomber project. Though it has not built a large manned aircraft since wrapping up B-2 Spirit production in the 1990s, the company has "been working hard to turn that perception around, with the skills and capabilities that back it up."

Northrop Grumman partnered with EADS to use the KC-30 to win U.S. Air Force's KC-X tanker competition. Northrop Grumman/EADS will be required to invest approximately US$600 million in a new assembly plant in the United States, which is currently planned for Mobile, Alabama. On February 29, 2008, the US Air Force chose the Northrop Grumman/EADS's KC-30.
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..2.. Just as the Boeing 787 will depend upon foreign manufacturers (without which the 787 won't fly), the mammoth USAF F-35 fighter program is also dependent on foreign contractors (e.g. BAE/British Aerospace) and on foreign government purchases for its success. The Air Force may have figured that this was a good way to earn some reciprocal goodwill.
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(From Wikipedia) While the United States is the primary customer and financial backer, the United Kingdom, Italy, the Netherlands, Canada, Norway, Denmark, Australia and Turkey have contributed US$4.375 billion toward the development costs of the program. Total development costs are estimated at more than US$40 billion (underwritten largely by the United States), while the purchase of an estimated 2,400 planes is expected to cost an additional US$200 billion. The nine major partner nations plan to acquire over 3,100 F-35s through 2035, making the F-35 one of the most numerous jet fighters.
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..3.. The USAF (presumably) concluded that the Northrop-EADS deal was simply the better (more capable, more cost-effective) deal for itself and that the Boeing deal was inferior after the scoring was all said and done.


..4.. The previous ethics scandal with Boeing may have caused Air Force acquisition officials to put Boeing in the penalty box for a while. Boeing's previous no-bid tanker deal with the Air Force (while simultaneously offering a plum job to the AF official negotiating on behalf of the government) was one of the worst and most egregious violations of government-contractor ethics in recent years.


I'm definitely interested in learning about the USAF's selection criteria and scoring methodology, but in retrospect they seem to have made a good although politically bold choice.
 
This is interesting...

First, the Marine One contract (the helo for the POTUS) is awarded to AgustaWestland, an Italian/British consortium...partnered with Bell/Boeing...and now this...
 
Jim McNerney, Boeing's CEO, must be drinking Maalox by the gallon after this announcement. And as someone who survived a McNerney era when he was employed by another company I've gotta say I'm not going to shed a tear for the guy. He's got a golden resume & the oh-so coveted Jack Welch disciple pedigree, but in the end he's more politician than leader. Million dollar charisma, powerful presence, but in the end he's historically been a guy who drives growth on the bottom--not top--line. Cut costs, reduce headcount, force everyone through six sigma training & turn even the most mundane decision into a 6-12 week black belt project, blah blah blah. No wonder Boeing's having problems delivering product.
 
Competing with a company that doesn't have to show a profit, as they are propped up by subsidies is one problem. The huge downturn in the post 9/11 aviation industry is another.
 
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