EADS goes alone in bid on U.S. tanker contract
WASHINGTON — A European defense contractor said Tuesday that will make its own bid for the U.S. Air Force’s long-delayed $35 billion contract to build a fleet of new refueling jets after its U.S. partner dropped out.
The European Aeronautic Defence and Space Company, also known as EADS, opens a new chapter in the bitterly disputed and politically sensitive Pentagon effort to replace its fleet of KC-135 refueling tankers that date back to the 1950s.
EADS is challenging Boeing Co., a U.S. company, for the right to build 179 new planes for the Air Force. EADS’ one-time American partner, Northrop Grumman Corp., backed out earlier this year after saying the Pentagon project unfairly favored Boeing.
“When you’ve got the best, you gotta offer it,” said Ralph Crosby, chairman of the EADS North America division.
The Pentagon has tried for nearly a decade to award the tanker contract, which is expected to be the first in a $100 billion overall program to replace the current fleet of KC-135 planes. Past attempts have failed repeatedly for reasons ranging from bungling by the Pentagon to the criminal conviction of a top Defense Department official.
The Air Force formally reopened the bidding earlier this year. Boeing said it would try again, but Northrop decided not to make an offer. Northrop has complained that the Air Force’s guidelines for the plane were slanted toward Boeing’s smaller plane.
That sparked claims of protectionism from European leaders who said the Pentagon is giving an unfair competitive advantage to Boeing, based in Chicago. President Obama assured French President Nicolas Sarkozy last month that the bidding process would be fair and transparent.
Faced with the prospect of awarding a contract with no competition, the Pentagon agreed to extend a deadline to give EADS more time to bid. Pentagon spokesman Bryan Whitman said that the department welcomed the EADS announcement and that it believes “any company that is interested and qualified to participate in this important program should do so.”
An EADS win would give its Airbus subsidiary a foothold in the U.S. market for military transport planes that is now largely dominated by Boeing. EADS plans to offer a military version of its A330 passenger jet made by Airbus, a subsidiary. Militaries such as the Royal Australian Air Force have already ordered versions of the plane.
Company officials stressed that it would be built by the EADS North American unit with help from U.S. companies like General Electric Co. and Honeywell International Inc. EADS plans to build the jet at a new plant in Mobile, Ala.
But Boeing, which has big manufacturing centers in Washington state and Kansas, has strong support in Congress. Sen. Patty Murray, D-Wash., sharply criticized the inclusion of EADS, pointing to a recent World Trade Organization ruling that found European governments had illegally subsidized Airbus.
“It means we are bending over backwards to include a company that has broken the rules of fair play,” Murray said.
Boeing echoed that sentiment in a statement, but said it is “confident in the superior value and capabilities” of its entry.
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