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Textron Is First U.S. Firm to Land Airbus Job

From Reuters

A subsidiary of Textron Inc. on Thursday became the first U.S. firm to win a major airframe contract for the European Airbus, the civil airliner project that the U.S. government says is unfairly subsidized.

The $700-million subcontract to build components for a new broadspan Airbus wing went to Textron Aerostructures of Nashville, Tenn.

The subcontract from British Aerospace PLC is the biggest it has ever awarded for the Airbus. British Aerospace, known as BAE, produces the wings for the civil airliners made by Airbus Industrie, a consortium of aerospace firms in Britain, France, Spain and West Germany.

Airbus has won a series of hefty orders from world airlines, including one from Northwest Airlines that could be worth up to $3 billion, and has posed a growing threat to the long dominance of Seattle-based Boeing Co. in civil aircraft manufacture. Airbus holds between 15% and 20% of the world airliner market.

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Thursday’s announcement came amid a long-running dispute between the United States and European governments over subsidies to Airbus. The United States has charged that billions of dollars in government funds have enabled the European group to sell planes at cut-rate prices in competition with Boeing and McDonnell Douglas Corp.

Won in Competition

However, G. L. Long, vice president of marketing and communications for Textron Aerostructures, told Reuters that the contract was not awarded to soothe U.S. feelings.

“It was strictly a competition between 60 companies and we won it,” Long said in a telephone interview from Nashville. “It has nothing to do with anything but good business.”

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John Kleban, Textron Aerostructures president, said in a statement: “Winning this new commercial work is a major achievement in light of the competitive pressures in the aerospace industry worldwide.”

Textron shares closed down 12.5 cents at $24.50 on the New York Stock Exchange.

BAE sources said the total value of subcontracts that the company plans to award for work on the new Airbus A330 and A340 airliners could be worth $1 billion.

Industry sources said the award of the bulk of the work to Textron would disappoint Burbank-based Lockheed Corp., which had said it planned to bid for the entire $1-billion package.

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The award of the contract for major work on a new 90-foot wing also seemed likely to cause political controversy in Britain at a time when BAE plans 5,000 layoffs throughout its various divisions.

But a BAE spokesman said: “We must place our orders on a commercial basis. If a British company can take payment in dollars as we demand, and can do the job best, a British company gets the order.”

British Union Complains

Britain’s white-collar Manufacturing, Science & Finance trade union accused BAE of exporting jobs and endangering Britain’s future strength in the aerospace industry, the Press Assn. news agency reported.

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“Thousands of jobs are being destroyed in the UK and transferred to Tennessee and other U.S locations,” union official Chris Darke said.

The Textron unit began competing for the Airbus package last October. Textron Inc. of Providence, R.I., has two other divisions, financial services and commercial products.

Textron Aerostructures’ product mix has included complete wing structures for several commercial aircraft, the first of which was the wide-body L1011 TriStar jetliner. In 1978, Aerostructures was the first U.S. contractor to manufacture major bonded wing assemblies for the BAE-146 civil airliner.

The 17-year-old Airbus consortium, based in Toulouse, France, makes a range of short- and medium-haul airliners--the A300, A310 and A320. The new range of Airbus airliners now being launched consists of the A330 medium-to-long haul jet and the long-haul A340.

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