Business

<< Previous   of   Next >>   ADVERTISEMENT   Related Stories • Boeing edges Airbus on orders in 2007 1/16/08 • Northrop calls its tanker less risky than Boeing’s 1/15/08 • Will Boeing walk away from the tanker bid? 8/12/08 • Tanker bid: Fast reply a good sign for Boeing? 7/9/08 • Boeing gets major boost in Air Force tanker battle 6/19/08 • Everett 767 workers hopeful after GAO weighs in on tanker 6/19/08 • GAO ruling unlikely to resolve tanker debate 6/9/08 • Lawmakers, Boeing unions protest tanker deal in D.C. 4/17/08 • Alabama's top Democrat breaks ranks to defend tanker contract 4/4/08 • Northrop says GAO dismissed its challenge to Boeing's tanker protest 4/2/08 • Northrop files motion to dismiss Boeing's tanker protest 3/26/08 • Air Force skewed tanker deal, Boeing claims 3/19/08 • Congressional allies have a tough task blocking the Air Force tanker deal 3/19/08 • Boeing says Air Force changed tanker rules to favor Northrop, EADS 3/18/08 • Legislature adjourns without Senate vote on Air Force tanker 3/14/08 • Boeing rival says Congress shouldn't interfere in Air Force tanker award 3/13/08 • Boeing formally protests Air Force tanker award 3/11/08   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Tuesday, January 15, 2008 Boeing rival EADS tries to sweeten tanker deal By Michelle Dunlop Herald Writer EVERETT -- EADS, the Boeing Co.'s chief rival for a lucrative deal supplying aerial tankers to the U.S. Air Force, upped the ante Monday offering to send more work to Alabama if it wins the tanker contract. EADS, the parent company of Airbus, would assemble its A-330 freighter in Mobile, Ala., in combination with KC-30 tanker assembly if it and partner Northrop Grumman are awarded the $40 billion Air Force bid. The duo say their tanker will create 1,000 direct jobs in Mobile and that the freighter would create 300. Also on Monday, Boeing made an appeal of its own, releasing a study that suggests Boeing's 767 uses significantly less fuel than does Airbus' A-330, the commercial versions of the rivals' tankers. The Air Force intends to replace 179 of its Boeing-built KC-135 tankers. With the contract award date of March drawing nearer, the tanker competitors continue to argue their cases both to members of Congress and to the American public. "This investment decision ... reflects EADS' firm commitment to the future of the American aerospace industry, the security of the United States, and our long-standing intention to create jobs and in-source industrial capability, advanced products and critical technologies into the United States," said Ralph Crosby Jr., EADS' North America chairman and chief executive. The European company long has been considered the underdog in the tanker contract. Many industry observers doubt that Congress will approve awarding a defense-based contract to a non-U.S. company, much less one embroiled in a trade dispute with Chicago-based Boeing. With the rise of the euro and decline of the dollar, EADS publicly has expressed interest in opening assembly sites in the U.S. Airbus prices its jets in dollars but pays its work force in euros, making it increasingly difficult for the company to turn a profit. EADS noted it would need to expand the KC-30 tanker production factory by 20 percent to 2 million square feet to accommodate A-330 Freighter final assembly. The company could begin construction of the freighter line late this year. Last January, Airbus launched its commercial A-330 freighter, which has won 66 orders in 12 months. "Selection of the KC-30 by the U.S. Air Force will not only provide the world's most capable military tanker, it also will result in the establishment of the first large commercial aircraft assembly facility in the U.S. in over 40 years -- and the first such Airbus assembly facility in the U.S.," said Thomas Enders, president and chief executive of Airbus. In Everett, Boeing operates its widebody commercial jet factory, built just over 40 years ago. The facility houses assembly lines for the 747, 767, 777 and 787 airplanes. Boeing considered Alabama as an assembly site for its fuel-efficient 787 Dreamliner before selecting Everett. If it wins, Boeing would build its KC-767 in Everett and send the tanker to Wichita, Kan., where many of the military components would be installed. Boeing officials have said the KC-767 would "support" as many as 9,000 jobs in Washington state between assembly jobs at its factory and positions with 767 suppliers. Boeing initially won a tanker contract with the Air Force a few years ago. The agency put an end to the deal when it learned Boeing had promised jobs to a defense weapons buyer and her family in exchange for steering the bid Boeing's way. The aerospace company has managed to keep its 767 line alive in Everett, partially by building 767-based tankers for Japan and Italy. Boeing has fallen behind in delivering those tankers and has lost other tanker contracts, most recently the Saudi Arabia contract, to EADS and its A-330-based tanker. Boeing says its backlog of roughly 52 unfilled orders for 767s would keep the line going in Everett for several years. In a separate announcement, Boeing said its 767 commercial jet is "substantially more fuel efficient" than Airbus' A-330 jet, based on a study prepared by Conklin & de Decker Aviation Information. The study conducted by the independent aviation research company, and funded by Boeing, used published data to calculate the fuel consumption of flying a fleet of 179 767-200ER and Airbus A-330-200 airplanes over a 40-year service life. The study showed that the 767 fleet burned 24 percent less fuel than the A-330s and would save approximately $14.6 billion in fuel costs, according to Boeing's press release. "It is critical, especially with rising fuel prices, that the Air Force's next refueling tanker meet or exceed their requirements and be as efficient as possible," said Mark McGraw, vice president of Boeing Tanker programs. "That aircraft is the right-sized KC-767 Advanced Tanker." Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.

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