Northrop Grumman/EADS were awarded a $35B contract for 179 aircraft  (Source: Northrop Grumman)

  (Source: Northrop Grumman)
Boeing loses out to Airbus in next generation Air Force tanker contract

DailyTech reported last year that EADS' Airbus division was seen as a candidate to supply airframes to replace the existing C5 Galaxy cargo planes and the Boeing 747-200B (VC-25A) used as Air Force One. Many discounted the possibility of foreign interests supplying airframes to the Air Force given the overwhelming lobbying presence to keep jobs and production on American soil.

While we still don't know the outcome for the C5 Galaxy/VC25A replacements, the U.S. Air Force shocked many on Friday when it announced that Northrop Grumman and EADS were awarded a $35B contract to produce 179 tanker aircraft.

Northrop Grumman/EADS long battled with Boeing in the KC-X tanker program, with many analysts and industry insiders reporting that the former had little chance in winning out to the hometown favorite. In the end, Air Force Gen. Arthur Lichte simply said that the larger, modified A330 provided by Airbus offered "more passengers, more cargo, more fuel to offload, more patients that we can carry, more availability, more flexibility and more dependability."

According to defense analyst Loren Thompson, Boeing will have little chance in reversing the decision as the Airbus plane "seemed markedly superior" to the Air Force.

The Airbus A330-based aircraft will be called the KC-45 and will replace 531 KC-135 aircraft which date back to the 1950s. The main structures for the aircraft including the body and wings will be manufactured in Europe by Airbus. Final assembly and militarization of the aircraft will be undertaken by Northrop Grumman in Mobile, Alabama.

Not surprisingly, reaction from many in Congress came swiftly and fiercely. "It's stunning to me that we would outsource the production of these airplanes to Europe instead of building them in America," said Kansas senator Sam Brownback. "We should have an American tanker built by an American company with American workers. I can't believe we would create French [and British] jobs in place of Kansas jobs," added Todd Tiahrt, a congressman from Kansas.

Patty Murray, a senior senator from Washington, also expressed her displeasure with the Northrop Grumman/EADA decision. "We are outraged that this decision taps European Airbus and its foreign workers to provide a tanker to our American military. At a time when our economy is hurting, this decision to outsource our tankers is a blow to the American aerospace industry, American workers and America's military."

Northrop Grumman/EADS won the first of three stages for the $100B Air Force tanker program which calls for 500 aircraft. With Northrop Grumman/EADS having won the first stage, it has the inside track in securing the final two stages of the program.

Boeing has 100 days to appeal the decision. "Once we have reviewed the details behind the award, we will make a decision concerning our possible options," said Boeing in a statement.

"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs
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