Business

<< Previous   of   Next >>   ADVERTISEMENT   Related Stories • Northrop calls its tanker less risky than Boeing’s 1/15/08 • Boeing's final order tally for 2007 is 1,413 1/4/08   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Friday, January 4, 2008 Boeing Rival snares Saudi tanker deal Northrop-EADS wins an order for three tankers, but analysts still see Boeing as the frontrunner for the U.S. Air Force contract. By Michelle Dunlop Herald Writer EVERETT -- Saudi Arabia picked Northrup-EADs Thursday over the Boeing Co. in the battle over who will supply world governments with a new military refueling tanker. Northrop-EADS will supply the Saudis with three tankers similar to those it's offering to build for the U.S. Air Force, the KC-30. The duo's tanker is based on Airbus' A-330 commercial jet. EADS is the parent company of Airbus. The Saudi order marks the fourth international contest win for the A-330-based tanker. Northrop-EADS received contracts from the governments of Australia, Great Britain and United Arab Emirates for its A-330 Multi-Role Tanker Transport. "Saudi Arabia's competitive choice is another validation of the A-330 MRTT's superior capabilities as a tanker and a true force multiplier," said John Young, chief executive of EADS North America Tankers, in a press statement. "It demonstrates the competitive strengths of this very capable tanker-transport platform, which is being offered as the KC-30 Tanker by our team leader, Northrop Grumman, for the U.S. Air Force's tanker fleet recapitalization." For its part, Boeing has received orders for the KC-767, a tanker based on its 767 commercial jet built in Everett, from Italy and Japan. However, the company ran into technical troubles as well as problems meeting customer specifications on the tankers and have fallen well behind schedule on first deliveries for either country. Boeing calls it a valuable experience it would use in making the KC-767 for the U.S. Air Force. Also on Thursday, the competitors submitted their final proposals to the Air Force in the competition for a $40 billion contract. After putting in initial bids in April, both companies developed all the details and handed off their last offers Thursday. The Air Force is looking to replace its decades-old KC-135 fleet of tankers, built by Boeing. The Chicago-based Boeing has put its Everett-built KC-767 against the KC-30 offered by Northrop and EADS. "We have completed this KC-X process the way we began it -- by listening to our Air Force customer," said Jim Albaugh, president and chief executive of Boeing Integrated Defense Systems. "We believe the KC-767 Advanced Tanker will be evaluated as the most capable, technologically advanced and affordable tanker for America." The Air Force has been working with Boeing and Northrop-EADS to ensure the competitors understand the agency's expectations. The agency held daylong meetings separately with the aerospace companies following the Thanksgiving holiday, giving the bidders a last chance to polish their proposals. Boeing won a similar contract from the Air Force several years ago. The agency was forced to rebid the contract when it learned that Boeing had promised jobs to a Pentagon weapons buyer and her family in exchange for steering the competition in its direction. Last year, Northrop-EADS suggested they would withdraw their bid if they believed the Air Force already had steered the competition toward Boeing. Most analysts project that Boeing ultimately will win the competition partly because of ongoing trade disputes between Boeing and Airbus at the World Trade Organization. They also believe it would be difficult for Congress to approve funding for a foreign-built tanker. Northrop-EADS will produce their KC-30 in Mobile, Ala., but the basic A-330 design came from European jetmaker Airbus. Northrop-EADS say their tanker is more versatile and offers greater capabilities than does Boeing's KC-767. Boeing says its smaller tanker uses less fuel than the KC-30, thus costing the American taxpayer less. The Air Force is expected to announce the winner on or about Jan. 31, says Northrop. Earlier, the military branch said it was expecting to decide toward the end of February. Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.

1. Obama's birth stirs legal action in Washington 2. Boeing, union call off talks, no further negotiations set 3. Boeing-Machinists talks – a SPEEA scare tactic? 4. Lynnwood man arrested in sailor's kidnap, robbery 5. Drug court left in limbo 6. Investigators now almost certain fatal fire wasn't arson 7. Marysville house fire called suspicious 8. Teen sentenced for Lynnwood break-in attacks 9. Aspiring young actress shows what she can do 10. Former hoops star enjoying a new game: sitting volleyball 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Keeping Wall Street's woes from Main Street • Teens read this week at Einstein Middle School • E-W parade winks at politics • Bus changes unsafe, some say • Team Peggy to host benefit • Music man • School room rental fees cause confusion • District changes policy for so ... • Mass transit, global warming divide 21st candidates • The symphony must go on • Paine Field airline service strongly supported by 71 percent of web surv ... • Verizon launches FiOS TV in Washington State