Archive for the ‘Northrop Grumman’ Category

Boeing tries to hold onto tanker deal

February 23, 2008
By JOELLE TESSLER, AP Business Writer

WASHINGTON – The Air Force is likely days away from handing out one of the biggest Pentagon contracts in years — a deal valued at up to $40 billion to replace 179 planes in its fleet of aerial refueling tankers.

In this image provided by the Boeing Aircraft Company the second ...
In this image provided by the Boeing Aircraft Company the second KC-767 aerial refueling tanker slated for the Japan Air Self-Defense Force takes off on its first flight Nov. 18, 2007 from Wichita, Kansas. A $40 billion contract to replace the Air Force’s aging fleet of aerial refueling tankers will be awarded as early as next week to Boeing, or a team made up of Airbus’ parent and Northrop Grumman. A victory for Boeing — the near-exclusive provider of these aircraft for 50 years — is already factored into the company’s stock price. Tens of thousands of jobs are at stake.
(AP Photo/HO)

For the three companies bidding, there is more at stake than just the monetary award: jobs and reputation.

Boeing Co. has supplied the Air Force with refueling tankers for nearly 50 years and doesn’t want to let go of that. The incumbent is considered the favorite to win — an assumption already reflected in its stock price.

But European Aeronautic Defence and Space Co. and its U.S. partner, Northrop Grumman Corp., want to be in on the game. For France-based EADS, the parent of rival Airbus, the contract is an entree into the massive American military market just as overseas spending cools. And for Northrop Grumman, it would tap into a major new military revenue stream at a time when Pentagon spending may be leveling off.

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