Friday, February 29, 2008

And the Winner Is....

The Northrop-Grumman/EADS has been selected as winner of the Air Force KC-X contract, supplying the next generation of refueling tankers for the service. Based on an Airbus jetliner, the KC-45 will be the first tanker built on a foreign design. The new aircraft will be assembled at a plant in Alabama.

Huge blow to Boeing, whose entry was based on its 767 airliner.

Protests over today's decision are almost inevitable.

19 comments:

Ken Prescott said...

The protests will most likely fail, because the Air Force acquisition people remembered what happened the last time around, and they probably did everything letter-perfect.

halojones-fan said...

I'm working on TSAT, and the customer barely even talks to us. They say "hello" when they enter the building and "goodbye" when the presentation is over, and the lower ranks don't even talk at all.

Wanderlust said...

Why Boeing chose to run with the antiquated 767 instead of the newer, much larger 777 for this project is completely beyond me.

Spook, any thoughts regarding that choice?

jbarr69044 said...

Very surprising. The Boeing cost less and appeared to meet the saleint characteristics the AF had defined. So much for thoses of us who thought we would never buy a French tanker.

Marty said...

Dear George: Have added your blog to my blogroll. Love former spook! Thanks for linking my blog in that piece on Shuster/Olbermann.
Best,
Marty Davis

Geekster said...

I believe McCain threatened to end the career of anyone who approved Boeing getting that contract.

Besides, it's a bone to Sarkozy when when we need to give him one.

sammy small said...

While the Boeing plane may have been a lower "per unit" acquisition price, I would guess that "life-cycle" costs probably favored the NG/EADS entry. In the end, that's a huge factor that often wins large scale competitions

mannaka said...

I think the Geekster might be half right. There probably is a strong connection between Boeing losing the contract and McCain. However, my guess is that the AF acquisition folks are actually sticking their middle fingers up at McCain and the rest of Congress. They’ve lost some pretty high profile protests with the GAO recently and their relationship with Congress can best be described as strained. Also, I’m sure they were paying close attention when everyone got all bent out of shape over that port management deal a while back. With the general mood of the nation leaning towards not sending what are perceived as “our” jobs overseas, the AQ types have probably decided to throw this tanker deal right in Congress’ face. They’re betting (probably correctly) that Congress won’t be able to stand by and let America’s global image be tarnished by the outsourcing of one of its most critical weapons systems. As for Boeing, they’ll probably just sit back and take the high road, telling the American public that they won’t protest the decision because they don’t want to jeopardize our national security. Public pressure will then force Congress to step in and somehow reverse the decision. In the end, the AF will get the Boeing tankers it wanted all along, Boeing will get a $40+ billion contract (vs EADS’ $35 billion), Congress will have to eat some yummy crow pie, and the GAO will be told to just shut up. Unfortunately, McCain’s close ties to this issue will probably cause him to catch a fair amount of collateral damage (much as Gen “Speedy” Martin did with the previous tanker fiasco a few years ago) and we might end up with a Democrat in the White House. Kind of poetic justice, wouldn’t you say? Especially since Obama represents the state in which Boeing is HQ’d.

section9 said...

I'm a betting man. I say Obama is craven enough to pick up on this in the next news cycle. Boeing will effing insist on it. He can slam McCain for handing a tanker to the French. It would be a smart move. Then JMC would have to give a hugely complex response about Boeing's corruption.

The only problem is that Boeing really, really wore out its welcome trying to peddle recycled 767's as new tankers. McCain doesn't get hurt looking out for the "little guy".

mannaka said...

I hope your right, Section9!

I'd feel a hell of a lot safer with McCain as Commander In Chief than Obama or Clinton, even if he is an old sea dog. At least he has wings. As for the recycled 767 part, let's just hope Boeing gets sent back to the drawing board and comes up with a better proposal. If we're going to replace the whole fleet of KC-10s and KC-135s eventually anyway, we might as well start the process off with modern technology. Maybe that's what Boeing and the AF want anyway. Drag things out long enough to get the Dreamliner developed, and then build a tanker around its airframe.

JJ Joseph said...

How big a deal is EADS parental role in the KC-30 deal? How much of the KC-30 will be made in the USA when all is said and done? Most likely, most of it will be US-made: engines, electronics, seats, wheels, tires, doors, hydraulics, glass, composite structures, refuelling gear, fasteners, sheet metal. Remember the Dutch Fokker F27 and its US-made Fairchild twin, the F-27 (and the FH-227). From 10 paces, they look identical, but not a single part is interchangeable between the two even though they're "identical". The KC-30 will likewise be totally US-made when all is said and done.

mannaka said...

According to the head of EADS, Louis Gallois, more than half the "workshare" would go to Europe, with the parts being built mainly in France, Germany, Britain, and Spain. GE would provide the engines and final assembly would be accomplished in Mobile, Alabama. The biggest concern I would have isn't necessarily who gets what piece of the pie, however, it's who’s going to provide all the technical support for our maintainers and what's the supply chain going to look like for our spares. If EADS ends up owning the tech data and the parts have to be shipped in from Europe, we're gonna be connected to the EU at the hip on this thing. Maybe that'd turn out to be a good thing politically, but it’s a dice roll at best. It is, however, very ironic that the Dems are the ones always screaming for better relations with Europe, but it’s the Bush administration that’s receiving all the praise from the EU right now. I’m anxious to see how this drama plays out.

Geekster said...

The "problem" I have with it is having French made refueling tankers. What if some day we become involved in a conflict and the French refused to give us some needed support because the tankers were being used in that conflict?

Ken Prescott said...

The "problem" I have with it is having French made refueling tankers. What if some day we become involved in a conflict and the French refused to give us some needed support because the tankers were being used in that conflict?

1. All US assets owned by French nationals or French corporations are nationalized immediately.

2. Won't be an issue, because we buy so many spares we could probably assemble build three times as many aircraft as we officially buy. How the heck do you think we've kept KC-135s in the air almost 20 years after the last 707 airframe was delivered, anyway?

Ken Prescott said...

Why Boeing chose to run with the antiquated 767 instead of the newer, much larger 777 for this project is completely beyond me.

The 767 airframe is approaching the end of its commercial service life. The replacement airframe (787) is not ready for prime-time, and it's probably going to be delayed further.

Some operators are already retiring 767s. That increases the cost of supporting the remaining 767s in the worldwide fleet. And with Boeing's 787 delayed, some customers may decide to buy A330s from Airbus.

How can Boeing convince these 767 operators to stay the course until the 787 is ready?

Simple: reduce the cost of supporting the 767 airframe by picking up a new customer . . . the US Air Force.

So, this is ultimately about getting the US taxpayer to subsidize airlines that operate the 767 airframe, including the Chinese government.

Only in America.

JJ Joseph said...

EADS isn't French. It's a Dutch company with US, German, French, and Spanish subsidiaries. US services are already operating many EADS types of planes & helicopters.

halojones-fan said...

"The 767 airframe is approaching the end of its commercial service life. The replacement airframe (787) is not ready for prime-time, and it's probably going to be delayed further."

Indeed, maybe that was part of Boeing's plan; get a USAF deal and use the money to finance the development of 787.

It worked before! (720 was basically a government-funded development with the 707 as a civilian spinoff...)

davod said...

How long is the delay with the 787?

Ken Prescott said...

How long is the delay with the 787?

It was supposed to enter service in about two months (May 2008). Now they're saying "early 2009."

And the FAA is now worried that the 787's flight and engine controls may be vulnerable to computer attack from the passenger compartment computer network.