Posted on 03/09/2010 11:58:52 PM PST by bruinbirdman
European countries have accused Washington of foul play after the continent’s largest aerospace and defence company pulled out of a multibillion-dollar race to supply the US military, alleging unfair competition.
Ministers in the UK, France and Germany, as well as the European Commission, hinted at possible repercussions from the collapse of the $50bn (£33bn) tender to supply the US Air Force with 179 air refuelling tankers.
EADS and its US partner Northrop Grumman decided late on Monday night to pull out of the tender after concluding that, under current rules, their larger A330 tanker could not win.
The decision is likely to raise transatlantic trade tensions further. Relations between America and Europe on trade are already stretched by the ongoing row between Boeing and Airbus over government subsidies for aircraft programmes.
The French foreign ministry said it would, with the European Commission, “examine the new development and its possible implications”. Christine Lagarde, French finance minister, openly suggested the competition had been rigged to favour EADS’s US rival Boeing, now the sole bidder.
“The best situation is one of fair competition and I think it’s a shame that the company wasn’t in the best competitive situation” for the bid, she said.
Rainer Bruederle, German economy minister, also said the US government had given a clear advantage to Boeing.
In Britain, one of the countries that would have benefited from an Airbus win, Lord Mandelson, business secretary, said he was “disappointed”. “Given the open market to US producers we have in Europe, it is very disappointing that a US-led European consortium feels that the revised tanker procurement process is now so biased against them that it is not even worth making a bid,” he said.
People close to the UK government warned there could be repercussions for US trade. “The ramifications of this are potentially very serious. It sends a protectionist signal,” said one.
Some US politicians were dismayed. Richard Shelby, Republican senator of Alabama, where EADS would have created jobs, said: “This so–called competition was not structured to produce the best outcome for our men and women in uniform; it was structured to produce the best outcome for Boeing.”
The Pentagon said last night: “The Northrop decision does not change our commitment to transatlantic defence ties . . . We do not set the rules to favour one party or another, European or American companies. We set the requirements that the war fighter needs and hope that a range of companies find it lucrative enough to bid.”
Concerns have been growing over the fairness of the bid process. In 2004, Boeing was awarded a contract, which was rescinded after an ethics scandal. The competition was re-tendered and won by Northrop-EADS in 2008, only for Boeing to protest successfully.
Wow who would have thought that the US government prefers to spends its tax money in the US instead of Europe /s
Hardly a suprise. The EU definitely would do the same.
So please politicians stop crying.
I would have thought that.
I lived under the expression that the US would buy the best plane and force whoever built it to do that in the US.
But that whould have worked in a republican world only.
Obama needed more votes for for Obamacare.
I lived under the expression that the US would buy the best plane and force whoever built it to do that in the US.
Why do we do this?
Why do we even fool with thinking about buying anything for our defense/military from other countries?
Can somebody explain to me why? I’ve scratched my head over this a while.
And that’s how they came to be called and known as Euro-trash and Euro-bitches.
I understand that eads is not happy with this.
But the US has also lost a good opportunity to escape a single source situation.
Boeing will now sell an inferior product for a very good price and invest the residual money where ever they think future growth will be. The size of this deal will manfest a monopoly and this will certainly lead to a weakening of the forces since they will have to take whatever boeing offers.
So the result will be:
EADS and Grumman: Loose and will not establish an american branch and become more american -
Boeing: Big Winner - will increase monopolistic position.
Barack Obama: Wins.
His government toppled the plans of the GOP and will sell this as an all american and patriotic victory.
Air Force: Looses.
The US as a super power: Loose.
Because in the future there will be less opportunities for sourcing of large military projects - things will get later, more expensive and less functionable. Also the Air Force capabilities will be weakened in comparison to the alterntive.
The US economy - wins then looses.
Profits will appear in boeings books and even influence the trade gap positively (in my opinion the later is the driving component in this decission) - but profits will largely not be reinvested in the US - capital drains to china more quickly and the trade gap widenes.
It’s socialism at work - and it doesn’t work.
I wouldn’t expect fair play. But I expected cleverness and long term thinking.
As I posted in another thread . . .
This withdrawal benefits EADS in two ways. First, they don’t spend more money on, at best, a 50/50 bet. Second, there may be a fix in to throw them a 20+ Billion bone.
EADS is in deep financial trouble over the A-380 and the A400M. Both are bleeding the balance sheet. Also the recession is beginning to be reflected in the order book going forward and it is not a pretty picture.
Now, how about, if you can imagine it, that EADS clears the way for Boeing (an red blooded American company) to have the tanker contract. An then a bit later this year we hear that the USAF is beginning to take a hard look at the A400M as it “now” fits their needs.
Say the USAF places an offer for 125 to 150 of these planes all of a sudden EADS has the A400M going from “rags to riches”. The added benefit is that if the US is buying it then it automatically becomes the plane for all the other countries AF’s.
Consider me cynical, but, watch the papers for coming events!
Oh now, let’s not sell Boeing short...they did produce the B52’s that have lasted some near 55 years or so, the KC135 tankers 500 of which are still operating since the early 60’s. Boeing has a lot of experience in making these types of craft.
European counties, who shirk their defense responsibilities, want to force the American tanker tender requirements to favor their subsidized aircraft builder. lol
of course the bid is rigged in favor of Boeing. Patty Murray is up for relection.
Wow who would have thought that the US government prefers to spends its tax money in the US instead of Europe /s
Hardly a suprise. The EU definitely would do the same.
So please politicians stop crying.
Good points. The Euros would have done everything to protect their interests if it was a tanker fueling their fighter planes
The Liberal Free Trade Globalists and the Economic Anti-Americans will side with the EU, but, it is stupid to ship a vital part of the American military infrastructure to a foreign country....even if it has a US subsidiary.
Foreign outsourcing of US military is a major threat to National Security
Why do we do this?
Why do we even fool with thinking about buying anything for our defense/military from other countries?
Can somebody explain to me why? I’ve scratched my head over this a while.
Free Traders have zero patriotism or love for their country......you wonder why people like George Soros, Jimmy Carter, Bill and Hillary Clinton, and AL GORE all are big supporters of Free Trade.
Not only Free Trade does not work economically.....it is a big threat to national security. The thought of so many Communist Chinese parts in our transport and military should scare the hell out of every American (but, of course, this is cheered by the Liberal Free Trade Globalists)
I absolutly don’t consider you cynical.
You are right - there must have been negotiations on that. Otherwise we were on trade war - that is what noone can afford at the moment.
and that’s another pair of shoes. They are now allowed to sell second best products for the best price. That’s not how a market works.
Well it’s either importing foreign parts and ideas or not be a super power.
Since WW2 the US military bought and licensed every single technology that could contribute to the military ability of the US.
There’s no alternative if you want to be the Nr.one.
I admit to having problems with the whole procurement process right now, and this deal does give Boeing some incentive to be sloppy...but I’m no fan of EADS and those crappy airbus variants they can’t seem to get working!
Boeing will not necessarily be sloppy - they just won’t have to develop much and be payed for it nevertheless.
Therefore there’s a good chance for them to be on time - actually this is even the highest asset of that concept. It’s nearly all there from the 80ies.
Caos projects btw, like the A380 and A400M and to be fair the F-35 and the 7-late-7 don’t yield crappy planes - just more expensive and later available planes.
These planes are supposed to be something new - concepts that never have been before - and I don’t think we can call Boeing or Airbus incompetent or sloppy on these deals, just because they get delayed by a year or two. I am much more fascinated by stuff like that then by this warmed up tanker planes of either party.
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