EADS of France, maker of Airbus, wrests US air Force contract from Boeing
March 3, 2008
France’s Airbus has won a decade-long struggle to land a manufacturing contract with the US military worth $35 billion. The announcement was made by the U.S. Air Force last Friday.
Under the landmark contract, Northrop Grumman and the European consortium and parent of Airbus, European Aeronautic Defense & Space, or (EADS) would build a fleet of 179 planes, based on the existing French plane Airbus 330, to provide in-air refueling to US military aircraft, from fighter jets to cargo planes.
The awarding of the contract to France’s Airbus comes as a shock and a bitter disappointment for Boeing, which had lobbied for the contract for a decade. Boeing saw an earlier almost-done deal scuttled by John McCain amid his accusations of sweetheart arrangements and resulting investigations which led to scandals and prison terms for two Boeing staffers for conflict of interest.
Airbus and Boeing had been competing for the contract fiercely on both sides of the Atlantic, spending millions on air shows and other types of promotion.
Many in the US, in business and in Congress, are reacting negatively that a company from France should have been awarded such an important contract for the US military. However, General Arthur Lichte, head of the air force’s air mobility command, retorted at a news conference on the Airbus deal, “This will be an American tanker, flown by American airmen with an American flag on its tail and every day it will be saving American lives.”
Congressmen from Washington State and Kansas, which have large Boeing plants, a furious that the contract went to a company in France.
The French Airbus 330 is much bigger than the 767 that US manufacturer Boeing proposed. The air force said it liked the plane’s larger fuel capacity, its lower cost and its ability to carry cargo and passengers as well as fuel.
Some believe that the contract, already one of the richest at the Pentagon, might eventually grow to $100 billion, unheard of for a US military contract with a company from France.
But the EADS Airbus contract is not as good for workers in France as might first appear. Because final assembly would take place in Mobile, Alabama, rather than the Toulouse plant in France, some in France are criticizing the Airbus deal, saying it will threaten manufacturing jobs in France. The Mobile plant will be the first new large commercial aircraft assembly facility in the US in over 40 years. Senator Richard Shelby, Republican of Alabama, said the decision was “great news for Alabama.” As well, some other parts for the planes will come from other international suppliers, not from France.
However, officials from Airbus hailed the contract as a win for France, saying that it is shows that the US market, previously closed to France and the rest of Europe, was not impenetrably after all and would lead to more rich contracts in the future.
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