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February 24, 2011 in News
Boeing to build new tanker
Contract worth $35 billion
This artist’s rendering provided by Boeing Co. shows Boeing’s NewGen Tanker that the Chicago-based company has proposed to the U.S. Air Force. Boeing competed with European Aeronautic Defense and Space Company (EADS) to win a $35 billion Pentagon contract to build nearly 200 giant airborne refueling tankers, to replace the Air Force’s Eisenhower-era KC-135s. The Boeing aircraft is based on the company’s 767 commercial airplane and will be built at existing company facilities, Boeing says.
(Full-size photo)
The Boeing Co. will build the next generation of air refueling tankers for the U.S. Air Force, winning a hotly contested decade-long bid to replace about a third of the KC-135s that have served as the military’s flying gas stations for nearly half a century.
The Air Force announced it was choosing a military version of the Boeing 767 over the Airbus A330 in the competition for a contract worth more than $30 billion and 50,000 jobs. Both aerospace giants get their parts from all over the world, but Boeing will build the planes in Everett and in Wichita, Kan.
Gov. Chris Gregoire said Thursday the contract will add about 11,000 aerospace jobs to Washington, and will urge the Legislature to make sure the training is available at community colleges so that state residents can take advantage of that expansion. “If they don’t find the skilled work force in the state, they’ll bring them in from out of state.”
Airbus would have assembled its tanker in Alabama at a closed military base.
Both planes met the Air Force’s 372 mandatory requirements and “were awardable,” Air Force Secretary Michael Donley said in announcing the contract Thursday afternoon after the stock market’s close. But the Boeing proposal offered “substantial savings” which he didn’t quantify. But the Airbus tanker, a larger plane, was expected to have higher costs to the military for extended runways and enlarged hangars.
The new plane, which Boeing has been calling the KC-X, will be designated the KC-46A. The Air Force will receive the first 18 planes in 2017, but won’t decide for several years which bases will get them.
The KC-135 is the plane flown by units at Fairchild Air Force Base on the West Plains. At one point, Fairchild was scheduled to be the first base to get replacement tankers, but that was when the Air Force had a different plan for replacing the Eisenhower-era planes.
Air Force officials at Fairchild, home of the 92nd Air Refueling Wing, declined to comment on the bid outcome Thursday, referring any questions to the Defense Department. Fairchild’s tankers also are flown by the 141st Air National Guard.
The first 18 KC-46As will be delivered to Air Force bases in 2017, but the decision on which bases won’t be made for several years.
Congressional delegations in Washington and Kansas hailed the Pentagon’s decision. Sen. Patty Murray who has been a supporter of the Boeing tanker replacement since it was first proposed in 2001, called the contract a “major victory” for America’s workers, its aerospace industry and military.
“It is consistent with the president’s own call to ‘out-innovate’ and ‘out-build’ the rest of the world,” Murray said in a prepared statement released just minutes after the announcement was made.
Members of the Washington delegation were bracing for bad news, as industry insiders had speculated in recent days that Airbus would win the contract. Sen. Maria Cantwell, D-Wash., said they were concerned that European Aeronautic Defence and Space Co. had been given every advantage to submit a bid and that unfair trade subsidy rulings by the World Trade Organization weren’t being considered by the Pentagon. Boeing still won, apparently decisively, she said.
But in Alabama, where the Airbus tankers would have been assembled, reaction ranged from disappointed to bitter.
“The U.S. Department of Defense, in not awarding the aerial refueling tanker contract to EADS North America today, has made a egregious error and America’s military men and women are ultimately the biggest losers,” the Mobile Area Chamber of Commerce said in a prepared statement.
The Air Force has tried to upgrade the tanker fleet for nearly a decade, with a series of missteps. Shortly after Sept. 11, 2001, it began discussion of a plan to “lease” some 100 tanker versions of Boeing’s 767 to allow it to retire some of the oldest KC-135s in the fleet. That idea had strong support from members of Congress in Washington and Kansas, where the company has assembly lines, but drew criticism from some budget hawks who noted that leasing was as expensive as buying in the long run, and the Air Force had to give the planes back when the lease was up.
Then Boeing got into trouble for offering a job to the Air Force official in charge of procurement, who was negotiating the tanker contract. The official, Darleen Druyun, and Boeing CFO Michael Sears were both fired, convicted of federal crimes and jailed.
When Congress eventually gave up on leasing and told the Air Force to buy tankers, Airbus joined the competition with Boeing. The Europe-based manufacturer was awarded a contract in 2008, but the Air Force later had to rescind the deal after government studies showed it was awarded on different specifications than the military said it wanted when the competition started.
Recently, the Pentagon had another SNAFU, admitting that it sent the two manufacturers the competition’s proprietary information by mistake.
EADS could challenge the contract, just as Boeing did when it lost the competition in 2008. Air Force officials tried to downplay the possibility that such a challenge would be successful, saying competition was open and transparent and “favored no one except the taxpayer,” according to Deputy Defense Secretary William Lynn.
After praising both companies for waging a “splendid competition,” Donley suggested that both remember they have “a long-standing releationship with the Air Force that we expect would continue.”
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CougarGold on February 24 at 2:36 p.m.
Awesome news! Let’s hope it doesn’t get tangled up in another round of political appeals. Great news for our State!
johnclarke on February 24 at 2:39 p.m.
Good news for jobs. and good news for our fighting men and women. There is no kicking ass without tanker gas.
Although it has nothing to do with the topic, I’d just thought I’d say Obama.
509ifyourlucky on February 24 at 2:41 p.m.
Great news for the Everett production plant and our State.
west on February 24 at 2:45 p.m.
Too bad Spokane isn’t in the plane business…
D Statler on February 24 at 3:04 p.m.
The last BOEING planes are still flying after half a century.These new Birds will undoubtedly display the same long lasting qualities as their predacessor. Great Job BOEING! Great job America!
GSI_Kevin on February 24 at 3:13 p.m.
west -
Triumph Composite Systems, located between Spokane and Airway Heights, will benefit. The company will help manufacture parts for Boeing planes, as it has all along. So, Spokane is in the plane business in some way.
This award to Boeing has been a long time coming. We’ve worked for a long time here at Greater Spokane Incorporated to bring the bid to our region. Our next hope is to have the new tankers at Fairchild Air Force Base.
Orange on February 24 at 3:20 p.m.
I do believe a company in Airway Heights still supplies parts for Boeing planes. May be a good thing for the west plains folks.
right on John! But I will miss my many rides in the 135. Loved laying down in the back of that thing watching fighters and bombers taking a drink from the fountain. :)
Orange on February 24 at 3:24 p.m.
Keep up the hope Kevin. You’ll have to push for (seriously) better roads and basic infrastructure first. New businesses tend to think poorly of a community that can’t sustain itself. Also, the work force. Good luck finding someone who can pass a pee quiz. This is a known fact in Spokane’s HR world.
DHF on February 24 at 3:47 p.m.
I wonder how much of the plane’s parts will be contracted out to China, Mexico etc. Sure would like to know.
polistra on February 24 at 4:09 p.m.
Boeing seems to have learned a lesson about the problems of too much outsourcing:
http://articles.latimes.com/2011/feb/15/business/la-fi-hiltzik-20110215
Or at least they SHOULD have learned the lesson.
In any case this will be good for both Wash and Kan.
hawken on February 24 at 5:07 p.m.
This is cause for great celebration! This is one of the largest contracts in the history of the US military!
But let’s remain a bit sober here, to at least, be somewhat consistent, relating to the value of OUR corporations in OUR economy and OUR nation.
Don’t forget that Boeing is one of the those evil, military establishment corporations whose CEO’s is grossly overpaid. At least, according to some whom have posted above, previously, relating to OTHER evil corporations. So please forgive me. I’m a bit confused here by some of the celebrant’s exhilaration above.
Furthermore, where is milken on this issue? She is the quintessential opponent of the military establishment and evil corporations.
The difference might be that Boeing is OUR evil corporation, who produces jobs for OUR people.
If I were a Boeing employee, I would be going out to dinner tonight!
Albert on February 24 at 5:30 p.m.
OUTSTANDING!!!!! keep the $$$ in the U.S. and out of Europe. Great Job!!!!
johnclarke on February 24 at 6:26 p.m.
In fact Hawken, he is overpaid and about as bright as you are. I have been on a couple con calls with the guy and he reminded me of J. Peterman. Odd how Japanese corporations manage to dominate the world with CEO’s that make a mere $750k. Boeing spent many years successfully crafting airplanes, then this latest dipstick decided that he would turn them into an “assembly” company and outsource components all over the world. How has that worked out for the Dreamliner, Mr Hawken? Never minding your relentless blather, this is a huge win for the state and Patty Murray who really put in the effort to get this contract.
D Statler on February 24 at 6:43 p.m.
@ Hawken, Do you suppose BOEINGS CEO makes more than AVISTA’s CEO ?? LOL Which do you suppose deserves more?
I am proud of BOEING’s accomplishments. There are very few other big companys in our state that started from the ground up.There are very few companys in Washington that make anything anymore. We are lucky to have BOEING here.We are unlucky to have AVISTA here.
jddavis on February 24 at 6:46 p.m.
Great news for the men and women in blue, our country, and Washington State! The KC-135s have served well since the late 50’s and have long exceeded their initial life span.
SpokaneLiberal on February 24 at 8:47 p.m.
Wait what?? Hawken et al are not up in arms about this wasteful government spending. The older planes still refuel, this is billions in pet projects and imaginary jobs.
Come on that is the party line people.
Get with the program. All government spending is wasteful.
Spokanelaw on February 24 at 9:27 p.m.
Thank you Patty Murray.
mikeln on February 24 at 11:18 p.m.
This is great for jobs which we need. I do seem to remember a one billion dollor job down on the border that seemed like it cost a lot less then a billion. A secret subsidy? I am not against things that benifit the nation. I am just against corporate welfare, you know, the good old boys club getting a lot of taxpayer money for nothing in return. Hawken, I am still a free man, I do not depend on the government or corporate america. You, on the other hand have your lips firmly attached to both.