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Boeing pulls out all the stops in its efforts to secure a tanker win

The stakes are high in declaring a winner of the lucrative U.S. Air Force KC-X tanker contract. Boeing and Northrop-EADS have been battling it out for years and there have been numerous threats to walk out, cries of favoritism, and claims of biased specifications.

Now, however, Boeing is going with its own "shock and awe" campaign, stating that giving the contract to EADS (Northrop has since dropped out of the race entirely) would be a national security risk. Although EADS would be directing a potential KC-45 tanker program courtesy of its 1,700-employee strong EADS North America subsidiary, Boeing contends that a bulk of development of the aircraft will take place in Europe.

Boeing notes that some of its own weapons systems have been hampered because "foreign-owned companies have withheld material goods and support.” Tim Keating, Boeing's Senior VP for government operations, goes on to say, "What would happen if this were a tanker? Could they and would they withhold spare parts and aircraft to impose state policy against the U.S., and what recourse do we have?"

It should come as no surprise that EADS was quick to refute Boeing's claims. "Boeing's ongoing misinformation campaign is an attempt to make this competition about anything other than getting the best tanker for the Air Force," said EADS spokesperson James Darcy. "We're proud that the Department of Defense has previously selected us as a trusted U.S. prime contractor, and we're proud of the 48,000 Americans on our tanker team who will build the KC-45."

The KC-45 is based on Airbus' existing A330 Multi Role Tanker Transport (MRTT) which is already in flight testing.

A Boeing exec who wished to remain anonymous recently stated that his company could pull out of the bidding process. "Jim doesn't want to be in a position that we are going to bid a losing bid. It gets difficult when you're dealing with a competitor who has flat-out said on several occasions that they're going to underbid us," said the unnamed Boeing exec. “How can they do that if the list price of their plane is higher than the list on our plane? Because they are subsidized and we're a for-profit company, so the question we're asking is: How do we compete against four governments?"

Regardless of who is finally selected for the KC-X tanker program, a replacement is sorely needed for the aging Boeing KC-135 Stratotanker. The KC-135 has been in service with the U.S. Air Force since 1957.

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By danobrega on 5/26/2010 8:16:27 AM , Rating: 4
...USA exports more aircraft than it imports I would say this makes no scene. If the other countries stop buying F16, AH64s, and so many other aircraft for the same reason I think the USA will end up losing lots of money.

RE: Since...
By Brandon Hill on 5/26/2010 9:21:04 AM , Rating: 4
You know, I never looked at it that way. We sell a lot of our military tech (save for the F-22) to foreign countries -- especially the European Union.

Seems kinda hypocritical.

RE: Since...
By MrBlastman on 5/26/2010 9:52:04 AM , Rating: 2
We might sell a lot of our airframes to overseas, but we do not sell some of our advanced avionics and weapons delivery systems on these aircraft to overseas. They might get an F-16, Block 52 and while they might have IFF capability (or maybe not), they will have one heck of a time delivering dumb-bombs in CCIP or CCRP mode without the JDAM attachments.

We strip them down of some of their more revered tech. This doesn't go without saying that the Europeans manage to innovate much like the Israelies do with the airframes they receive (the F-16I is kind of sexy with those characteristic conformal fuel tanks).

The British, for instance, took our AH-64 Apache (both the A and D variants), farmed manufacturing of them out to AgustaWestland after receiving their first delivery from Boeing and then souped them up with more powerful Rolls-Royce engines, new electronics suites and other little goodies. They made it better.

So, really, it is a good thing that we can sell stripped-down aircraft overseas. It dramatically lowers long-term costs for our Military by providing an alternative source of funding for the initial R&D. The best thing is, we still control where a lot of the parts come from (not all, like in the Apache).

RE: Since...
By Strunf on 5/26/2010 12:29:11 PM , Rating: 2
I really doubt what you're saying, there's a market for weapons and for sure the US wouldn't strip down it's weapon when the Russian, the Europeans and others are selling fully capable ones, unless you pretend that your strip down F-16 are still better than anything else.

RE: Since...
By MrBlastman on 5/26/2010 2:23:48 PM , Rating: 2
Like it or not, what I am saying is fact. There are certain technologies on the F-16 and F-15 that our Military did not want to sell overseas and they did in fact strip them out.

This doesn't mean the planes were useless though. They were still very viable aircraft, they just lacked some of the bells and whistles (mostly in the electronics) that their American counterparts had in them.

The Russians have done this also. Why sell your very best making someone else your equal?

RE: Since...
By slunkius on 5/27/2010 2:54:40 AM , Rating: 2
yeah, so when EADS bid will be evaluated, their tanker without "bells and whistles" would surely lose to Boeing's proposal. Or are you afraid that EADS will strip down some features AFTER they won a bid, which is silly.

RE: Since...
By Reclaimer77 on 5/26/10, Rating: -1
RE: Since...
By Anoxanmore on 5/26/2010 10:37:47 AM , Rating: 5
I don't think you are quite reaching far enough, reach more.

RE: Since...
By marvdmartian on 5/26/2010 9:23:39 AM , Rating: 3
Or, perhaps, it makes no SENSE to you?? ;)

Maybe other countries buy our aircraft because (1) they're a proven design and (2) it's cheaper than developing their own?? Pretty much the same reason why people in the USA buy Toyotas??

Boeing has a good point, if EADS can underbid them simply due to the fact that they can afford to initially not turn a profit. Hopefully the air force will decide on a design simply due to it's value, instead of it's cost. And definitely, one of the requirements should be that it's built in the USA.

RE: Since...
By Reclaimer77 on 5/26/2010 9:29:38 AM , Rating: 2
Yeah I'm not sure about the national security argument. Although I would prefer domestic solutions to our military's requirements.

However the fact that EADS is highly government subsidized is a valid point. That defeats the point of having a spirited competition, when one side doesn't need to be concerned with profits.

Frankly I'm tired of hearing about this. I thought Boeing won the bid TWICE now anyway? Don't go away mad EADS, just go away.

RE: Since...
By Connoisseur on 5/26/2010 9:37:56 AM , Rating: 2
Although I would prefer domestic solutions to our military's requirements.

Are you implying domestically designed or domestically built? It seems to me that since EADS has a large NA presence, they could just as easily assemble the aircraft here. Also, it's not like Boeing would build their entire aircraft in the US. Just look at the 787 Dreamliner. From what i've read, the parts were sourced from many countries and simply assembled in the US. Odds are both aircraft will have international as well as local components.

RE: Since...
By Reclaimer77 on 5/26/2010 10:00:10 AM , Rating: 2
Are you implying domestically designed or domestically built?

I think I 'implied' exactly what I said. I would prefer domestic solutions for our military's needs.

Boeing has a long and proven track record of serving our men and women in uniform. I frankly don't see what the problem is in letting them build this tanker. I'm sure EADS has a long and proven track record in serving Europe, and that's great, but this is the Air Force we're talking about here.

RE: Since...
By Brandon Hill on 5/26/2010 9:39:27 AM , Rating: 2
I thought that Boeing won ONCE -- then the bid was overturned due to corruption charges. Then Northrop-EADS won, but it was overturned after Boeing complained and said that the requirements were out of whack or something like that. A gov panel agreed.

That contract was cancelled. Add another year of bitchslapping and here we are :-)

RE: Since...
By karielash on 5/26/2010 9:46:02 AM , Rating: 1

Both Boeing and EADS get Government subsidies, whether it's 'research' grants or direct aid, both sides are playing fast and loose with the rules and both sides are crying about the other side doing it.

Boeing won the first bid, and but was theirs, at least up till the point where people realized that they were a) ripping off the taxpayer b) paying airforce personnel to break the rules for them, the result of which was a Boeing exec in federal prison along with an ex-airforce employee who had 'coincidentally' got a cushy job at Boeing.

Considering Boeing were running in a one horse race that had to be just about the dumbest stunt ever pulled.

The second bid they lost... probably more to do with the BS on the first go round more than anything else.

Now the third time round they realize they are getting owned so they start crying again...

Maybe they should get the CEO's of both companies in the pentagon and flip a fucking coin... that way at least both have a truly 50/50 chance of winning and the poor bastards who are having to fly 50yo tankers will get a decent replacement sometime this side of the next millennia.

RE: Since...
By knutjb on 5/26/2010 3:04:57 PM , Rating: 3
Both Boeing and EADS get Government subsidies, whether it's 'research' grants or direct aid, both sides are playing fast and loose with the rules and both sides are crying about the other side doing it.

Both get government contracts and research grants. Contracts and research grants provide a service and/or product to the government.

Boeing DOES NOT get government subsidies like Airbus. Airbus has received BILLIONS of cash infusions that were called "loans" that are structured in such a way that they'll won't be paid back. Those are subsidies. And the A380 "loans" weren't the first.

GM got a subsidy, Chrysler, and Wall Street too but not Boeing. The subsidies Airbus received kept the company afloat, like GM but earlier in the process. Airbus has been, overall, a cash losing government pseudo private enterprise.

To compare both companies as profitable private entities is purely ludicrous. Get your facts straight.

RE: Since...
By karielash on 5/26/10, Rating: 0
RE: Since...
By danobrega on 5/26/2010 9:43:27 AM , Rating: 3
Well of course they bought them because they were the best. Isn't that what should matter?

one of the requirements should be that it's built in the USA

No, that's called protectionism, goes against free trade and actually hinders competition.


RE: Since...
By Reclaimer77 on 5/26/10, Rating: -1
RE: Since...
By Brandon Hill on 5/26/2010 9:58:59 AM , Rating: 2
I've got a few simple questions. What do you think of European nations buying F-16s, F-18s, and F-35s instead of their own Typhoons, Eurofighters, and Rafales?

Would you be upset if they cut off U.S. imports of military fighters and told Boeing, Lockheed, etc. to "*&^$ off" because they can produce their own planes?

Isn't the U.S. government propping up Boeing, which is selling military aircraft to foreign nations just as much as the European Union is funneling money through EADS/Airbus for military exports?

RE: Since...
By Reclaimer77 on 5/26/10, Rating: -1
RE: Since...
By karielash on 5/26/2010 10:24:30 AM , Rating: 1

EAD is a public traded company.

RE: Since...
By Reclaimer77 on 5/26/10, Rating: 0
RE: Since...
By karielash on 5/26/2010 10:51:28 AM , Rating: 2

Dude the only thing I grasp is that you are truly an idiot, sorry to be so blunt but it's a simple fact.

EADS operate under the same rules as any public traded company, if they can undercut Boeing and make a profit, good luck to them, but if you think their shareholders will stand for them making an aircraft at a loss your a fool, and if you think the European Union or any of their members will write EADS a blank check (even more so in the current economic climate) your an even bigger fool. Maybe you should take a break from supping the Boeing cool-aid.

As has also been pointed out, BOTH sides receive HUGE government subsidies, masked as R&D, Tax Breaks, or straight up subsidies, it makes no difference, they are both playing foul.

RE: Since...
By Reclaimer77 on 5/26/10, Rating: -1
RE: Since...
By jbartabas on 5/26/2010 3:12:24 PM , Rating: 3
If they are both playing foul, than what's the problem [...]

And it's Kool-Aid , dumbass.

It's "then", not "than".

RE: Since...
By mindless1 on 5/27/2010 11:48:18 AM , Rating: 2
These is one thing worse than a grammar mistake or typo...

That's a forum grammar nazi.

Congrats on derailing a topic, adding to clutter, and being an asshat simultaneously.

^ That doesn't mean I agree with the prior post, but please learn to let silly ideas die instead of dragging them through the mud and wasting EVERYONE'S TIME.

RE: Since...
By slunkius on 5/27/2010 3:06:20 AM , Rating: 1
wow, reclaimer takes the prize of dumbest thing still capable of posting comments

RE: Since...
By mindless1 on 5/27/2010 11:44:24 AM , Rating: 2
No sweetheart, making a post just to troll on someone makes you the winner of that award.

^ Me too.

RE: Since...
By Calin on 5/26/2010 11:12:58 AM , Rating: 1
Obviously Typhoons, Eurofighters, and Rafales are pieces of shit. Otherwise they would use them instead of American F fighters.

It's called bribe:

RE: Since...
By Danish1 on 5/26/2010 3:08:47 PM , Rating: 1
I don't think much of it. Obviously Typhoons, Eurofighters, and Rafales are pieces of shit. Otherwise they would use them instead of American F fighters.

The reason why most of the European powers that are not part of those projects buy American planes is because in return we get a better deal on become subcontractors on them than we'd get on those European planes.

Now see if you can put two and two together and realize what that means.

Ignorance is a bliss neh?

RE: Since...
By karielash on 5/26/2010 10:07:09 AM , Rating: 1

Boeing playing by the rules...

Simple fact is neither side are playing by the rules.

RE: Since...
By knutjb on 5/26/2010 3:59:02 PM , Rating: 2
The state tax exemptions listed would even apply to Airbus if they set up a plant over here.

The NASA and DOD are for products and services. The patent transfers and trade secrets are related to the projects Boeing helped develop. DOD and NASA throw money in the direction it wants tech to go and the private enterprise comes along and creates it. Sometimes the lines look blurry because of the sensitive nature of the project it cannot be divulged.

Yep providing SPARE PARTS is a subsidy? PDM is a subsidy? There have been a number of companies performing PDM work. I was in the military and there is competitive bidding on most parts, some parts no one wants to support because to hassle or profit margins don't make it worthwhile. These are weak arguments.

The tax breaks on sales to foreign companies, we shouldn't tax foreign sales, we tax to much already. Many of those products are partially produced overseas already.

The Dept of Labor, I don't get that one either and I think they should be dissolved they are pretty much a waste of tax dollars.

But from my prior comment:

If Airbus operated in the US they could access the same benefits as Boeing. The European Union countries HAVE to give massive subsidies to keep Airbus afloat purely for the jobs. Takeaway the tax breaks Boeing would still be in business. Take away the "loans" Airbus would disappear.

That document is a pretty big stretch in its attempt to equivocate Airbus's "loans" to work performed by Boeing.

RE: Since...
By karielash on 5/26/2010 6:16:43 PM , Rating: 2

go read, most of what was going on was agreed to by the USA in 1992. The US even acknowledge that the three programs that have received aid did not break the agreement.

The USA also acknowledged in the agreement that what they were providing amounted to subsidies and the agreement limited how much BOTH sides could give, and they were described as that in the agreement.

RE: Since...
By knutjb on 5/26/2010 7:21:21 PM , Rating: 3
From your link:
All European government loans for Airbus programs have been made entirely within the letter and the spirit of the 1992 US-EU Agreement on Trade in Large Civil Aircraft since its entry into force and this will continue to be the case for all future Airbus programs. The US have not disputed this fact.

WTO rules Airbus subsidies illegal, hurting Boeing * From: AFP * March 24, 2010 12:10PM *

Said example falls short on truth...

RE: Since...
By karielash on 5/26/2010 7:43:36 PM , Rating: 2
lol, you should learn to read.

RE: Since...
By knutjb on 5/27/2010 4:48:06 AM , Rating: 3
You should too
It added the WTO panel had determined that reimbursable EU loans made to Airbus amounted to a ``legal and compliant instrument of partnership between government and industry''.
Its not all Bad Boeing and your link is a Euro-centric product highly biased towards Airbus.

Perhaps you need to go back and read without the rosey Airbus filters on.

I am not thrilled Congress allowed Boeing to buy up much of its competition, namely McDonnell Douglas. The KC-10 is a far more capable jet than the Airbus that is similar in size.

I am tired of the US is always bad tripe. Boeing is flawed but I think less so than Airbus. Airbus's tanker offering is woefully inadequate for the mission it is meant for. I have many years of experience in tanker world and the KC-45 is a joke. It is less practical and far too big of replacement for the jet its meant to replace.

RE: Since...
By danobrega on 5/26/2010 10:15:32 AM , Rating: 2
now now, there's no need to insult people. That doesn't help you prove your point.

hugs & kisses.

RE: Since...
By Reclaimer77 on 5/26/2010 10:25:02 AM , Rating: 2
No, but it does make ME feel better :)

RE: Since...
By Anoxanmore on 5/26/2010 10:39:35 AM , Rating: 2
Mentality of a second grader... *kisses* ;)

RE: Since...
By mindless1 on 5/27/2010 11:41:37 AM , Rating: 2
You really don't see the bigger picture do you?

These are MILITARY aircraft. Murder is illegal too, but in times of war the *rules* get bent and so it goes for war machines... the military must NECESSARILY play by a different set of rules in order to preserve the peace that allows the rules the rest of society adheres to.

It would be extremely short-sighted for the US to not be able to 100% manufacture their own military vehicles, particularly those in service for long periods of time.

RE: Since...
By Wulf145 on 6/4/2010 2:08:17 PM , Rating: 2
Then why does Boeing get most of the parts from other coutries and not manufacture them in the US?
EADS would do the same, but since Boeing is goning to win the bid anyway I am just wondering wether you consider it short sighted as well if Boeing does it?

RE: Since...
By gamerk2 on 5/26/2010 10:40:27 AM , Rating: 2
Not really. EADS already has the plane built and in testing [heck, they've already done a mid-air refueling], while Boeings plane...exists on a sheet of paper somewhere...

Seriously, Boeing is going to win the contract, then have 100% cost overruns, just like their "other" planes. But, they'll have the contract...

RE: Since...
By knutjb on 5/27/2010 8:26:24 PM , Rating: 2
The Italians have 3 of the said "paper" Boeing tankers, though not to the exact same spec.

RE: Since...
By MrFord on 5/27/2010 12:51:43 PM , Rating: 2
I'm sure they held the same speech when Iran was buying 747's and 727's from them in the 60's and 70's, encouraging them to buy local and not from a foreign country, where availability of parts could be jeopardized if said ties between both countries were to be severed

So I guess....
By monkeyman1140 on 5/27/2010 3:16:58 AM , Rating: 2
All those Rolls Royce engines we use are a national security risk too. The British may decide to take back the colonies and embargo us.

RE: So I guess....
By knutjb on 5/27/2010 4:55:29 AM , Rating: 2
The original Boeing bid from the late 90s used European sourced components that are used in the civilian airline market. They were a politically derived choices from that period. It would have been just as easy to use only US sourced components.

EADS, the real deal
By CubicleDilbert on 5/28/2010 1:38:56 PM , Rating: 2
I don't get it.
Americans are worried that their Boeing tankers might be less performing than the EADS Airbus tanker.
Just to put it in context:
When long time ago Wilhelm Böing left Germany and emigrated to the US to build great planes, you Americans were more than happy to welcome great technology.
Now, after WWII you declared it illegal for Germany to build any planes (because they were the best and thus dangerous), for 40 years. Meanwhile you happily sold thousands of (mediocre) planes to Germany and Europe.
Now, as European plane makers reemerge, the former top German firms (Messerschmidt, Focke-Wulf, Bölkow, Daimler) joint forces and founded EADS (Headquarters in Munich, and Toulouse) under a European umbrella.
All of sudden, EADS again makes the best planes in the world, just because Americans became lazy and sluggish.
Now you complain again that Germans build the best planes.
Maybe the fault definitely is not on EADS's side, but on Boeing's.

RE: EADS, the real deal
By FPP on 5/31/2010 1:59:16 PM , Rating: 2
Boeing's point is well considered: What if a European government has an objection to US foreign policy and can, or will, withhold critical support for the use of this plane? Don't try and tell us it cannot happen, becuase there is nothing stopping them.

Foreign parts...?
By tafinho on 5/26/2010 8:17:20 AM , Rating: 2
Obviously Boeing does not uses foreign contractors...

By Search on 5/28/2010 8:52:47 AM , Rating: 2
What it comes down to who has a superior air - refueling boom ? Europeans went on to develop a new boom, redesigned and hard tested while BOEING went for the old boom with some better vision system.
In my opinion BOEING is no longer the original company that it was. It is arrogant and do not listen to customer. They think they can outsource for Integrated Defense Systems as they do in commercial aircraft division. It does not work this way for the military divsion.
The exec have not figured this out.

By MrBlastman on 5/26/10, Rating: 0
"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive

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