The CEO of Boeing said on Thursday that it’s possible his company will be underbid by its European competitor.
Boeing Chairman and CEO Jim McNerney told analysts in New York that the chances are “very high” that Boeing will bid. The Air Force wants 179 tankers, under a contract that could be worth roughly $35 billion. It’s a fixed-price contract, so whoever makes the planes absorbs much of the risk if they cost more to make than expected.
Bids are expected by July 9 from both Boeing and European Aeronautic Defence and Space Company, parent of Airbus.
McNerney said he’s expecting EADS to bid “aggressively.”
“This can be a dangerous situation for Boeing. We have to bid responsibly,” he said.
Boeing will bid “very aggressively,” he said, but he added that Boeing will not aim “to only beat the lowest bid that Airbus could possibly come up with. Airbus could win this thing on price. I don’t want to put 10 years of performance of our company at risk in a fixed-price development contract just to say ‘I’ve won the tanker deal.’
“I really want to win it, and the chances are we’re going to bid. The chances are very high we’re going to bid. The question will be, what’s the responsible bid for our company, and that’s what we’re working through right now.”
Subscribe to the Morning Review newsletter
Get the day’s top headlines delivered to your inbox every morning by subscribing to our newsletter.