Yesterday, Boeing dropped a minor bombshell in the ongoing tanker saga: the company is OK to split the $35 billion deal with Northrop-EADS if that’s what the Pentagon wants.
EADS and Northrop have been open to the prospect for a while.
Obviously, it doesn’t hurt Boeing to say it, given Defense Secretary Robert Gates’ opposition to a dual-award. Today, Gates is meeting with Alabama Sen. Richard Shelby, reports Reuters.Shelby and fellow Alabama Sen. Jeff Sessions placed a hold on President Obama’s nomination of Ashton Carter for defense secretary of acquisitions.
Analyst Richard Aboulafia, with the Teal Group, offered his solution to the much prolonged tanker debate in his latest monthly update. Read Aboulafia’s post for the full explanation.
The crux of it: Northrop’s partner, EADS, should kill its badly struggling A400 program. A400 customers buy Boeing’s C-17s and C-130Js. In exchange, the U.S. Air Force buys the EADS and Northrop KC-30 tankers rather than Boeing’s KC-767s.
As Aboulafia points out, Boeing workers here in the Puget Sound region and those in Kansas (along with EADS employees in Spain) would lose out … but, he says, “France, the UK, Germany, California, Georgia, Connecticut, Indiana, and all countries involved would come out way ahead.”
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