Congress Skeptical

EADS and Northrop Grumman are reported to be in negotiations to compete against Boeing for the next generation of refueling tankers. The two companies have reportedly been in negotiations for months, and a partnership announcement could come in the next few weeks.

EADS has been seeking a US site to build a plant to boost its chances in the tanker competition. Thirty two states have shown interest according to the St. Louis Post Dispatch.

"This is a major threat to Boeing's efforts to sell its jetliners to the U.S. military," said Richard Aboulafia, senior aerospace analyst at the Teal Group to the Post-Dispatch. "Boeing should be concerned. It would be painful to lose this market."

"We look forward to the competition," said Boeing spokesman, Doug Kennett. He said Boeing would not back down in the contest for the tanker contract or for other contracts.

Having a domestic US plant and an American partner is seen as critical by EADS for this competition. "We need the complementary industrial capacity to be successful in competing," said Guy Hicks, EAD spokesman. "And you need an American partner, because when you get beyond the airframe, you have all the potential classified or highly confidential components that are necessary in this kind of system."

The prospect of the two companies getting together has created a stir with members of Congress.

"They want us to think they're an American company, so they can get contracts for U.S. military planes," said Sen. Patty Murray, D-Wash to the Post Dispatch. "I'll tell you what - not on my watch."

Murray stated that Airbus would not deliver the jobs that are promised, but Hicks claimed, "If we're successful in the tanker competition, this will be an American plane, built by an American industrial team." Hicks said that 1,200 workers would build the tankers in a $600 million plant built in one of 32 states.

Sen. Jim Talent, R-Mo., said that among legislators, "there is a lot of distrust about whether this means a straightforward and substantial investment in jobs in the United States, or if this is a sham attempt to look like an American company while keeping everything in Europe."

FMI: www.northgrum.com, www.eads.com