EADS Mum on U.S. Tanker Partner

EADS Mum on U.S. Tanker Partner

EADS has found a U.S. partner for the tanker competition, they’re just not saying who it is, according to the Financial Times.

The European aerospace firm had been in talks with L-3 Communications, but once word leaked of the potential partnership, lawmakers on Capitol Hill twisted arms and the U.S. company backed out, EADS chief Louis Gallois told reporters in London.

“We perhaps made a mistake to announce L-3. Putting it on the radar screen was not very good. This time we prefer to be more quiet. You read what Norm Dicks said. It’s public. He said, ‘I hope that US suppliers will not go with EADS.’ I think it’s a kind of pressure,” the article quotes Gallois as saying.


Boeing supporter and top defense appropriator Rep. Norm Dicks (D-Wa.), told U.S. companies not to team with EADS against Boeing for the $35 billion tanker contract. If it wins the contract, Boeing plans to partially build the new tankers in Everett, Wa., located near Dicks’ congressional district.

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Why is Rep. Norm Dicks even allowed to be in this position in the first place????!!!! It’s clear he is doing anything in his power to make sure Boeing wins and if you do not think Boeing isn’t lining his pockets with cash than you need your head examined.

The people of Washington elected Norm Dicks, and then he kissed enough ass to become the “top defense appropriator.”

Can anyone imagine under any circumstance involving any defense contract other than this one where it would be the least bit acceptable to bully an American defense contractor into not teaming with a foreign company for a contract? Remove either of two key players: Boeing or the delightfully-named Dicks. And this would be impossible.

In Norm Dick’s defense, that is one of his jobs — to make sure his people get all they can. Look at what Murtha (RIP) dod for Johnstown, PA.

This contract should not go to company not based in this country. Just because these of shore companies throw a few American jobs into the pot building the plane; most of the money goes off shore. And especially in these times the United States can’t afford that. Boeing’s experience will result in a good system, if there are not other American competitors, so be it.

> most of the money goes off shore

incorrect, ‘most’ (over 50%) of the money will stay here

also, the military is not a jobs a program, the contract should go to the best product that best supports the needs of our armed forces

irtusk, the defense infrastructure IS a jobs program. Defense contracts, here and elsewhere, always have an element of the political and economic self interest. To deny this is simply ignoring the facts.

Do you think that its a good thing at almost 50% of the contract’s worth will be sourced to foreign companies? I don’t. Frankly, its reckless and bone headed.

Aurora — it’s boneless to have an open and free market?!

i agree i would rather have Boeing win this contract…but the US cannot claim an open market system (assuming there is more than one capable bidder, which there is) and then just award a contract to a US company because they want to keep the money here. Globalization at its finest!

“boneless”? Clueless, maybe. ;-)

The term I used is “bone headed”. Long term impact on our defense infrastructure needs to be considered. There will be no (as in zero, zip, nada) U.S. manufacturer of tankers, only a FAL in Alabama to place the decals and apply the overcoat of paint. Someone in DOD needs to do a little consequential thinking. If not, Congress must act.

Remember Boeing will be sending the 767 money overseas to the countries that will build a lot of the 767 aircframe and such. So your statement about keeping the money in the US is not accurate

More $ will stay with the 767 than with that airbus product. A US manufacturer will be the prime versus a euro company.

If the USAF goes with airbus, Boeing is out of the tanker business. WE are out of the tanker business. At some point in the future, we become dependent on the goodwill of the euro governments for a linchpin of our power projection.

Even if Boeing gets the contract they are beholding to Japan, Italy and China to provide parts for the 767. It would be a no win if either has problems

> If the USAF goes with airbus, Boeing is out of the tanker business. WE are out of the tanker business.

um, so if Boeing loses KC-X they won’t bid on KC-Y and KC-Z?

I’m sure EADS will be pleased to hear that

> I don’t. Frankly, its reckless and bone headed.

our defense industry depends on open competitions around the world.

if we ban foreign competitors, it will be slightly hypocritical to ask other countries to open their competitions.

> only a FAL in Alabama to place the decals and apply the overcoat of paint

incorrect

EADS has been trying to get a plant in the US for a long time. Once here, it will be used for many things besides A330Fs and will become a new center of aerospace excellence in the US.

You are having difficulty distinguishing between subcontracting out and wholesale outsourcing of programs. Boeing outsources work–true. Giving airbus the tanker contract would be tantamount to surrendering the capability to manufacture tankers by a U.S.manufacturing firm. We would be beholden to the “goodwill” of the Schroeder’s, Chirac’s, and Zapoterro’s from euroland.

You may be fine with that; I am not.

What competitions have Germany, France and Spain “opened up” on major procurements to US defense companies? The A400? Galileo? Are they buying the F-35?

We don’t “owe” them a shot at this, anymore than they “owe” us a shot at their tactical transport or tactical fighter systems.

> Giving airbus the tanker contract would be tantamount to surrendering the capability to manufacture tankers by a U.S.manufacturing firm

tankers are based on commercial wide-bodied jets

as long as Boeing makes those, we aren’t surrendering anything

plus you forget there are 2 more tanker competitions coming

just because Boeing loses KC-X doesn’t mean it can’t win KC-Y and KC-Z

> What competitions have Germany, France and Spain “opened up” on major procurements to US defense companies? The A400? Galileo? Are they buying the F-35?

Spain is considering the F-35 and flies the F-18, F-5, C-130, P-3, S-76

Germany is partnering on EuroHawk

France flies the C-130 and E-3

What have they bought in the last 20 years of consequence? To give them this tanker contract would be tantamount to giving the French, Germans, and Spanish a vote on how we deploy our military. We would be divesting our own industry of a very critical power projection capability.

Your claim that a commercial airframe can be readily turned into a tanker is tantamount to saying a bulldozer could be turned into a tank. It takes many years of experience to develop this capability; and these skills would atrophy. To highlight the difficulty, note that EADS still has NOT delivered a single tanker.

As for KC-Y & KC-Z, plans change. KC-X will likely be the last for many, many years. This really is winner take all.

I don’t want the “all” to go to Toulouse.

Aurora it’s very clear you have no idea what you are talking about. As someone who worked on Northrop’s (I since took a position with Boeing) Tanker proposal everything you are stating is pretty far from the truth. If Northrop/EADS had been awarded the contract the assembly plant in Alabama not only would have been for the Tanker but also Airbus had plan to open a second assembly line for their military freighters here, essentially insourcing “European” jobs to American soil. And contrary to your post, If Boeing does not win the bid we will not suddenly “lose” the ability to build Tankers. We are currently building tankers for Japan and Italy. Just because the B-2 line shut down years ago doesn’t mean Northrop will not bid for the NG Bomber.

> To give them this tanker contract would be tantamount to giving the French, Germans, and Spanish a vote on how we deploy our military

incorrect

the only part from Europe is the frame, which is a standard A330 frame so that would be impossible to embargo because of all the civilian operators

the engines and avionics are all from US companies like GE and Honeywell

even the boom is built by EADS NA in WV

> note that EADS still has NOT delivered a single tanker

incorrect, they delivered 4 A310 MRTTs to Germany and 2 CC-150Ts to Canada

Boeing’s Tanker History
KC-135: 1954–1965
KC-10: 1979–1987 (14 year gap)
KC-767: 2003-present (16 year gap)

So Boeing should be fine till 2028 or so at least.

And really, the KC-10 was designed by McDonnell Douglas who had no previous tanker experience.

IAI has designed their own tanker, Russia has built several tankers. Clearly there is no ‘magic’ to it, only good engineering work.

Obviously, some have been drinking the kool aid for so long they can’t consider the harm that outsourcing this deal to the euros would cause. If DoD gives this to airbus–and there is every indication that that is what they are going to do–the US will have no active manufacturer of tanker aircraft. That is undeniable. The 767 line will close in short order after the commercial backlog is exhausted, and suppliers across the country will feel the impact. I simply don’t share your faith that DOD is going to proceed with KC-Y & Z as they state; it will be winner take all and I fear the “all” is going to europe if Congress allows this to happen.

Perhaps during the summer we will learn DOD’s true motivation for extending the deadline on this solicitation?

The below statement is somewhat distorted,
“Boeing supporter and top defense appropriator Rep. Norm Dicks (D-Wa.), told U.S. companies not to team with EADS against Boeing for the $35 billion tanker contract“
I believe he said that he hoped that no US company would team with EADS. Big difference between what he said and what is written. Not up to the usual quality of posting.

> the US will have no active manufacturer of tanker aircraft

as I have shown, there have been several times when we had no active manufacturer of tanker aircraft (1966–1978, 1988–2002)

it simply isn’t a big deal

> Big difference between what he said and what is written. Not up to the usual quality of posting.

when someone in his position says something like that, it doesn’t take a genius to read between the lines

he can’t actually threaten them because that would be illegal, so he got as close to the line as he could to make his point abundantly clear

he won’t explicitly link partnering with EADS to consequences, but don’t be surprised if the next time you come before his committee you take a beating

purely coincidental of course

“it simply isn’t a big deal”

Completely disagree. You are free to advocate the euro “solution”, but it will be disastrous to the U.S. aerospace industrial base. Short sighted, bone headed, and utterly foolhardy.

Aurora, There’s really no difference between subcontracting out and wholesale outsourcing based on the computations. That is, what’s the difference between giving the contract to EADS (wholesale outsourcing) if 60% of the work or dollar value is done in the U.S. very Boeing (subcontracting) 40% to non-U.S. sources? None.

If the issue is that the U.S. doesn’t have an industrial policy that fully employs our people first (which I’m in favor of) and which simply awards any contract to Amercian owned compnaies, it has to play by the “world economy” rules with no exceptions. Look at Boeing’s flip flop on the presidential helo. What? Americans can’t design a decent helo? Should United Technologies (Sikorsky) automatically be awarded the contract? Under your rationale, Boeing should be told no deal on the helo.

Allmost all lesser european countries fly quite a few american aircraft too.

If europeans had the same attitude you would have lost lots of exports. Which DOES bring home money.

However I can easily see that a loss of manufacturing capability would be a problem and that this should be take into consideration.

Personally I don’t think the tanker program is so technologically advanced that it falls under loss of manufacturing capability.

What?

Boing doesn’t make money on commercial aircraft now?

Boeing should get the contract period! The U.S. should protect whats left of her “military industrial complex!!!”

The U.S. trade deficit is at $40 billion per month and on track to lose another half a trillion this year. The official U.S. unemployment rate is at almost at 10% (15 million) but the unofficial unemployment and under-employment rate is at 17 million (26 million).

When Boeing gets the contract it should do it’s part and build the whole project in America. No out-sourcing and off-shoring any part of the aircraft.

I would like to see this contract be the begining of the end of anymore liberal trade policies and the begining of a national rebuilding of American scientific and industrial base.

JMN

> but it will be disastrous to the U.S. aerospace industrial base

incorrect

all KC-X will do if KC-767 is selected is extend the life of an already dying 767 production line

on the other hand if KC-30 is selected, a brand new fabrication plant will be built in the US and we will capture a portion of Airbus work that will likely continue for decades

if you care about increasing the aerospace infrastructure in the US, you want the KC-30

> Boeing should get the contract period!

then don’t have a competition

if you have a competition, it has to be an honest one

just be prepared for Boeing to stick it to the taxpayer if they have no fear of losing the contract

> The U.S. should protect whats left of her “military industrial complex!!!”

except selecting the KC-767 doesn’t really do that.

as soon as KC-X is finished the 767 line will shut down forever

as far as design work, Boeing has already done all the major tanker-related stuff for the Italian and Japanese tankers

the rest is just general aerospace engineering, and they have enough work with 787 and 748 and all their other projects that they’re in no danger of losing their capability there

I might add, Do you remember the American car companies of the 1970’s, they did not think they had to compete with anybody so they continued to make crappy cars and we all know what happened to them.

We should hope that the selection of a tanker / tanker contractor best serves the needs of the warfighters. The process should not, as mentioned above, be based on a jobs program outlook. As far as US vs foreign content, I have yet to see any public release of the Boeing tanker subcontract plan, which would articulate the intended foreign content of the Boeing offering. I suspect the Northrop/EADS tanker and the Boeing tanker have almost the same foreign content (once the B.S. is scraped off). Lastly, I hope the Europeans don’t take the same approach to the JSF that congress and the USAF are taking with the tanker. If they do, the support for JSF will go out the window and the per AC cost for US services will double or triple.

Irtusk, you say that “if you have a competition, it has to be an honest one”

Well I’ve included a link below that was published here on DOD Buzz a few month ago that spells out that the World Trade Organization issued a final ruling that Airbus enjoyed unfair subsidies from European governments. Instead of competing just with Airbus, Boeing was forced to compete with the deep pockets of European governments that supply Airbus with illegal launch aid. Feel free to read the article
http://​www​.dodbuzz​.com/​2​0​1​0​/​0​3​/​2​3​/​a​i​r​b​u​s​-​n​a​u​g​hty–

Irtusk it’s not just the airtankers either. The U.S. is getting clobbered by her liberal trade policies right across the board. American industry after industry has been hit by unfair trading practices and insane policy. Have you seen the trade figures of the past decade and a half???

Please take the time to study the history of U.S. trade policy. Pay attention to the aftermath of the Kennedy Round Of The GATT in 1967 and the aftermath of the U.S. signing onto the WTO in the mid 1990’s. Take a look at what lax rules are doing to America.

I repeat, Boeing should win the contract, period! I would like to see this contract be the begining of the end of anymore liberal trade policies and the begining of a national rebuilding of American scientific and industrial base.

Very best regards, JMN

A few years ago France was destroyed and We spent a lot of money rescueing them and rebuilding Europe. Airbus has bennefitted from the investment we made. We as Americans have carried and been forced to pay interest on the national debt which has not been zeroed out since WWII. Boeing, it’s suppliers, and it’s employees have been paying for that debt for nearly 70 years. Airbus has bennefited at the expense of Boeing for a long time and we need to start taking care of our own tax base before we send a lot of our money overseas.

Besides how many Airbus aircraft have been flying as long as the Boeing KC-135s and B-52s?

irtusk RE “just be prepared for Boeing to stick it to the taxpayer if they have no fear of losing the contract”

The government auditors will be in there checking every last penny spent. besides they already have the previously submitted proposal and lots of experience working with the American firms and know the pricing. Besides all of the TINA compliance issues that keep prices from American suppliers low.

> Boeing was forced to compete with the deep pockets of European governments that supply Airbus with illegal launch aid

all that launch aid has been paid back with interest

there is nothing subsidized about the current planes

> I would like to see this contract be the begining of the end of anymore liberal trade policies and the begining of a national rebuilding of American scientific and industrial base.

basically your admitting that America can’t be competitive in the global market place so we should just close our borders and try to protect what we have

i disagree

there would no quicker way to destroy our national competitiveness than to make the US an insulated market where companies don’t have to worry about competition

> The government auditors will be in there checking every last penny spent.

oh to be naive again!

Enter text right here! Irtusk, I repeat, look at the trade figures. America can’t compete because other countries won’t let her. Japan is the finest example. In 2008 Japan sold 3 million automobiles into the U.S. market. 3 miliion additonal Japeanese cars were built inside the U.S.A. for a total of 6 million cars. In 2008 the U.S. sold a grand total of 16.000 cars into the Japanese market. Other countries already use protection as a policy. I want recipocity across the board first! Then lets talk about Airbus. I repeat look at U.S. trade figures.

Best regards, Joe

Irtusk, the government auditors will not be in there checking every last penny.

If you ever launched a complaint with the ITC you’ll learn that very quickly. Free Trade has not worked as promised. America’s trading partners are much more protectionist than you realize. America’s $40 billion dollar a month/ half trillion dollar per year trade deficit is the reality. There has to be more way trade reciprocity than there presently is.

After more than a decade and a half of de-industrialzation it is time to be more pragmatic. I would like to see this contract be the begining of the end of anymore liberal trade policies and the begining of a pragmatic national rebuilding of America’s scientific and industrial base. Let the EU keep their Airbus.

Joe

COMPETITION IS NEEDED, AS DEFENSE MONEY IS GETTING HARDER TO COME BY! LOOK AT THE F-35; IT HAS ALMOST DOUBLED IN PRICE (MAY BE THERE ALREADY)! WHATEVER COMPANY HAS THE BETTER TANKER SHOULD GET THE CONTRACT! CONGRESS MUST LET THE MILITARY PICK THE BEST PRODUCT ON ANY EQUIPMENT THEY NEED! CONGRESS SHOULD STOP MICRO-MANAGING SOMETHING IT KNOWS NOTHING ABOUT!

There is no such thing as unfair competition due to “foreign government subsidy” of an overseas competitor. The competitor just happens to be a bigger “company” — say the French government (or whatever), really, just the French taxpayers. From an economist’s perspective, the winning bidder just happens to be a very large company (probably willing to take the bid as a “loss leader”). To be honest, some large multinational companies (e.g., GE, P&G, Exxon) are actually bigger than the GDP of some entire countries! So if the French taxpayers want to low-ball the bid and grab a loss leader, so what? As long as they deliver, the U.S. taxpayers get a bigger bang for the buck and win out in the long run.

Farby, the World Trade Organization issued a final ruling earlier this year in favor of Boeing stating that Airbus enjoyed unfair subsidies from European governments. Instead of competing just with Airbus, Boeing was forced to compete with the deep pockets of European governments that supply Airbus with illegal launch aid.

Regards, JMN

> Farby, the World Trade Organization issued a final ruling earlier this year in favor of Boeing stating that Airbus enjoyed unfair subsidies from European governments

they’re about to say the same thing about Boeing receiving unfair subsidies

what then?

regardless, all launch aid for the A330 has been paid back with interest, so no, Boeing isn’t competing against ‘the deep pockets of European governments’ for the tanker contract

Irtusk, we will have to wait and see what the language of the WTO’s ruling says first.

My whole point here is that there is a whole lot more going on here than a simple Airtanker contract. Mine is not an anti-free trade position. I want reciprocal trade and we are just not gettng it. The issue of protection, and subsidies, and dumping is big and the U.S. is not been great at enforcing the agreements for political reasons. 85% of the U.S. Trade deficit comes from five countries, China, Japan, Canada, Mexico, and the Germany. I want people to wake up at look at the history and the results of these trade agreements.

The “EU” not just EADS wants to start get into American military contracts. Once they get in it’ll be a bitch to get them out.

I personally do not want to the U.S. economy any more vulnerable than it already is. It’s time to rebuild.

U.S.A. All The Way.

JMN

My original response did not post so I typed it out a second time here.

Irtusk, we will have to wait until the WTO’s ruling is complete and look at the language.

My overall point is that there is a lot more going on here besides a simple free market Airtanker contract. Mine is not an anti-free market, anti-capitalist, position. I want reciprocal treatment for American Advanced Technology Products and Manufacturing which we’re not getting and Washington is not enforcing the agreements for “political” and not economic reasons. Our trade partners are engaging in currency manipulation, protectionism, dumping, and strategic subsidies. Five countries, not including OPEC, make up 85% of the massive U.S. trade deficit. China, Japan, Canada, Mexico and Germany. India and South Korea are also catching on to the lax U.S. enforcement and taking advantage too.

I want Americans to look at the history of these U.S. trade agreements “and the aftermath” and then wake up.

The aerospace industy is in trouble and so is the U.S. economy. Its time to rebuild.

Regards, JMN

> Irtusk, we will have to wait until the WTO’s ruling is complete and look at the language.

yes, i can definitely tell you’re taking the wait and see approach

Sorry to burst your bubble.

JMN

Read em and weep Air Bus fans.

Boeing Calls WTO Ruling a Landmark Decision and Sweeping Legal Victory
Launch aid for every Airbus program deemed illegal and damaging http://​www​.defpro​.com/​n​e​w​s​/​d​e​t​a​i​l​s​/​1​6​4​45/

Like I’ve been saying for a couple of years now, Boeing should win the Airtanker contract and this ought to be the start of a rebuilding of the military industrial complex.

Go U.S.A., all the way!
Joe

World Trade Organization Denounces Airbus Business Practices, Compromising Tanker Bid

The WTO ruling has big implications for U.S. trade relations, and the U.S. Trade Representative has pledged to follow up by enforcing U.S. rights under applicable treaties. However, the most immediate impact of the ruling may be seen in the U.S. Air Force’s pending competition to select a new aerial-refueling tanker. Airbus parent EADS and Boeing are offering derivatives of commercial transports as their tanker candidates, and almost all of the $5.7 billion in subsidies that Airbus received to develop its transport has now been ruled illegal by the WTO. Pentagon policymakers have resisted taking those subsidies into account in comparing bids, but that puts them in the position of potentially rewarding illegality on the part of one bidder. Members of Congress will undoubtedly complain that if a U.S. company had engaged in the same pattern of prohibited behavior on the product it was offering, it probably would have been barred from bidding in the first place.
http://​www​.defpro​.com/​n​e​w​s​/​d​e​t​a​i​l​s​/​1​6​4​61/

JMN

Eventually there will no longer be the domestic technical base to design and build items key to national our defense.
Jon

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