EADS to Seek Tanker Partner
Europe’s largest defense contractor said Monday that it would seek a U.S. partner to build aerial refueling tankers if the U.S. reopened the competition for the multibillion-dollar Air Force program.
Escalating a transatlantic rivalry, European Aeronautic Defense and Space Co. also said it would open a plant in the U.S. to work on the aircraft if it won the contract.
The latest overture came a week after Congress derailed a $23.5-billion Air Force contract for 100 tanker aircraft from Chicago-based Boeing Co.
The deal came to an abrupt end after Darleen Druyun, a former top Air Force acquisition official, made a surprise admission that she agreed to a higher price for the aircraft because Boeing gave her family jobs. Her admission came during the sentencing for a conflict-of-interest violation. Druyun also said she favored Boeing on three other contracts that she negotiated while she was at the Air Force.
The revelation prompted the Pentagon to review a host of major defense contracts dating to the late 1990s. Competitors that lost the contracts to Boeing have filed protests asking the Pentagon to overturn them.
One of the biggest contracts that Druyun handled was the tanker deal. In 2003, the Air Force selected Boeing over EADS, which owns 80% of Airbus, to supply 100 aerial refueling tankers.
With the Boeing deal scuttled, the Pentagon is considering the possibility of reopening the competition and letting EADS make another bid.
“Obviously we will partner on this competition with a U.S. company to win the competition for this tanker program,” EADS co-Chief Executive Philippe Camus told Reuters. He declined to identify companies EADS was talking to, but said the partner would need to be a prime contractor to satisfy the Pentagon.
EADS already has partnered with two of the largest U.S. defense contractors, Century City-based Northrop Grumman Corp. and Bethesda, Md.-based Lockheed Martin Corp. on several Pentagon contract bids, including supplying search-and-rescue helicopters.
But spokesmen for both American companies said they weren’t interested in pursuing a tanker partnership with EADS.
“Lockheed Martin has no plans or intentions to enter the current tanker opportunity,” said Lockheed’s Tom Jurkowsky.
Northrop spokesman Frank Moore said the company was not involved in any negotiations and had no plans to do so.
Richard Aboulafia, an aerospace analyst with research firm Teal Group Inc., said Northrop and Lockheed had been moving away from making airplanes to focus more on developing and making sophisticated military electronics.
“I don’t think it’s going to happen anytime soon,” Aboulafia said.
Having a U.S. partner could help EADS overcome a long-held Pentagon belief that sensitive military work should be handled by U.S. contractors. As a result, for decades the Pentagon has been reluctant to give foreign companies much more than token contracts for parts and supplies.
EADS is a Dutch-based consortium of French, German and Spanish companies. EADS’ U.S. operation is headed by Ralph Crosby, a former Northrop executive who previously ran Northrop’s sprawling military aircraft division in El Segundo.
