Boeing’s vice president for Air Force systems, John Sams, talked up the prospects of the 767 tanker Monday in an interview with Reuters. http://today.reuters.com/business/newsArticle.aspx?type=ousiv&storyID=2006-01-30T224610Z_01_N30308760_RTRIDST_0_BUSINESSPRO-ARMS-TANKER-DC.XML
Key Quote 1: “Sams said the 767 offered lower fuel burn costs than the its main competitor, the Airbus A330, which could spell $2 billion in savings over the 40-year life span of the aircraft, and its smaller wingspan gave it a smaller ‘footprint.’”
Key Quote 2: “The company had expected to make a decision last year about shutting its 767 production line in Everett, Washington, but was able to stave off a decision due to new commercial orders. … Sams said he was uncertain how long current orders would keep the production line running. He said the company had not set a date for making any decision on shutting it down.”
Boeing had a backlog of 30 767s as of the first of the year; it delivered 10 in 2005, so, Mr. Sams, it looks to me like the 767 line is solid through the end of 2008.
One of the big issues in the soon-to-be-renewed tanker debate will be whether the Pentagon needs to move quickly to replace an aging fleet of KC-135s or whether there’s still life in the 45-year-old birds.
According to Navy Times http://www.navytimes.com/story.php?f=1-292925-1500131.php , the Rand study says there’s no need to rush. They bounced that idea off Loren Thompson, a defense industry analyst with the conservative Lexington Foundation, who has been following the tanker issue inside the Beltway for … eons, it seems.
Key Quote: “The (Rand study) also rejects the earlier Air Force contention that the service needs its new tankers immediately. The current fleet’s ‘corrosion is manageable,’ the report says … Thompson … rejected the notion that the existing KC-135 fleet would last as long as RAND suggests. … ‘The absurdity of saying you don’t need new tankers until some date in the future lies in an inability to predict when the current fleet will begin incurring structural problems,’ Thompson said. ‘Nobody has ever operated jets for this long, so we can’t know when these will become dangerous.’
In the meantime, the EADS/Northrop Gruman team is gearing up to fight for a piece of the tanker contract.
On Monday, they broke ground on the new EADS engineering center in Mobile, Ala., where the contractors hope to someday convert Airbus A330s into Air Force KC-30 tankers, the Birmingham Business Journal http://birmingham.bizjournals.com/birmingham/stories/2006/01/30/daily2.html reported today.
Key Quote: “The engineering center is the first step in what economic development leaders in Mobile and statewide are hoping will be a much larger industrial complex. Additional development there hinges on whether Northrop Grumman, with EADS as principal subcontractor, receives an order to modernize the U.S. Air Force’s aerial refueling tanker fleet.”
And weekly DC newspaper The Hill reports that EADS may be forming its own political action committee http://www.thehill.com/thehill/export/TheHill/Business/013106_aircraft.htm to help it funnel cash to friendly Congressmen.
Key Quote 1: “EADS North America and Airbus executives have contributed close to $80,000 to politicians since 2001, according to data from the Center for Responsive Politics. Compared to that, Northrop Grumman contributed $599,500 for the 2006 election cycle alone.”
I found The Hill story interesting in that it looks at the morass ahead — the battle over Airbus or Boeing tankers also involves Boeing’s C-17 cargo jet. The Pentagon can’t afford to buy F-22 fighters, C-17s and tankers all at once (which is why tanker backers proposed that ill-fated tanker lease in the first place), so now there’s a looming political fight between power brokers in Congress.
Key Quote 2: “The Air Force’s decision could start a war of vested interests in Congress between those such as Sens. Kit Bond (R-Mo.), Jim Talent (R-Mo.) and Joe Lieberman (D-Conn.) who fought to keep the C-17 production lines open and (powerful GOP Sens. Richard Shelby and Jeff Sessions), who would see hundreds of jobs created in the Mobile area if the tanker procurement gets started.”
Last week, you may recall, Washington’s Congressional delegation vowed to back Boeing’s tanker bid. http://www.heraldnet.com/stories/06/01/24/100bus_e1boe001.cfm
Key Quote: “‘Boeing, go out there and compete and win it on the merits,’ urged U.S. Rep. Norm Dicks, D-Wash. ‘But if you don’t, we’ll fix it.’”
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