Posted on 01/22/2011 7:21:07 AM PST by sukhoi-30mki
Can Boeing regain tanker bid balance from EADS?
New Mexico Business Weekly .
U.S. Sen. Maria Cantwell, D-WA, Thursday visited the Everett (WA) factory floor where The Boeing Co. hopes to build U.S. Air Force tankers, and announced a new initiative to give Boeing back an edge.
In the wake of numerous reports that EADS likely will win the Air Force competition to build new flying tankers, Cantwell said she’s asking the Senate Armed Services Committee to determine if the competition can still be fair after the accidental November release of bidding information to both Boeing and Airbus parent EADS.
EADS officials at first looked at Boeing’s information although Boeing people said they didn't look at the EADS material, and the Air Force later tried to rectify the accident by giving both full access.
“Even if this release was inadvertent, it can have far-reaching consequences if not addressed properly, if it ends up violating laws and fair-competion regulations, or if it directly impacts a bidder’s strategy for establishing its final price in a competition,” Cantwell wrote, in letter to U.S. Sen. Carl Levin, D-MI, chairman of the committee.
The Senate hearing is scheduled for the last week of January, and the Air Force is expected to make a decision in February or March.Meanwhile some locals are hoping for an EADS setback after this week’s loss of a refueling boom from an EADS tanker being prepared for delivery to the Australian air force. The incident involved an F-16 fighter in the air over Spain.
But Lexington Institute analyst Loren Thompson in a Thursday blog said he thinks Airbus has the advantage and will win the $35 billion contract in March.
Ironically, he said, this is about the same time that the World Trade Organization will make public two decisions that will indicate the advantage Airbus has. In response to an appeal, the first will indicate that Airbus received illegal subsidies worth about $20 billion over the last decade to support the development of aircraft including the A330, upon which the European tanker bid is based. The second will say that during that same period, Boeing also received subsidies, but only for about $3 billion.
“Airbus is going to win largely on the basis of aggressive pricing -- the same way it bests Boeing in commercial competitions. The WTO has found that the European company’s ability to under-price Boeing is directly traceable to a pattern of illegal trade subsidies from four European countries.” he said in his blog.
“The centerpiece of the European strategy in the tanker competition from day one has always been to offer a concessionary price that Boeing could not match. Now it has found an ally in the U.S. Air Force to help destroy more American jobs.”
Boeing employs about 450 people in New Mexico, with 80 percent of those jobs in laser-related work at Kirtland Air Force Base, such as the military's Airborne Laser Program. Boeing decided to center all of its directed energy work in Albuquerque last year.
Read more: Can Boeing regain tanker bid balance from EADS? | New Mexico Business Weekly
While most of us here on FR would definitely prefer a real US company get the contract... What purely US company is there? Even Boeing outsources components...
But the real picture here (beyond subsidies, which both received) is that Boeing has fallen into the same Union- inflated monstrosity as the US auto makers. A condition that makes being truly competitive very difficult.
Why do they never mention that EADS will build the tanker in Mobile Alabama (with Non-Union Labor).
Even competitive bidding is mis-managed by by our gov’t.
It is past time to clean house.
Something I posted on another article about Boeing.
“I come from a Boeing family. 50 years of Boeing talk since the 60’s when they actually paid attention.
Unions have ruined the once creative environment that now is a war between cheap college educated Russian engineers (20.00hr) in one room and American HS company trained people from the 70’s making 60 to 70 an hour with no real accountability for their time. And often unlimited overtime to do ???
Unions make it impossible to fire idiots so Boeing will soon be GM.”
Adding to that my Mom was an exec secretary. She would tell us she did all the jobs of her supervisors and her own in less then half a day.
I worked union for two weeks once. Got sick of hearing their favorite line.”Slow down your workin us out of a job”.
The reason Boeing is fighting tooth and nail for this contract is to keep Airbus from building an assembly facility in Alabama, which will also crank out civilian A330-200F freighters, and give Airbus a toehold in the US labor pool.
Airbus has always had a currency exchange problem. Aircraft are priced in US Dollars, but Airbus' costs are in Euros.
” fallen into the same Union- inflated monstrosity as the US auto makers.”
Boeing does have unions who have struck. However, the Boeing unions are much better than the UAW in Detroit. The overall compensation levels and work rules are not comparable. I do not like the Boeing unions but they have not been able to place the same onerous demands on Boeing as the UAW in Detroit.
An inconvenient truth. ;o)
Numbers matter, and I’m a numbers guy. Fewer but larger isn’t necessarily better. Buying foreign isn’t either. Outsize aircraft that don’t fit “normal” airfields isn’t as well. OTOH if the delay is long enough, maybe engine and aerodynamic developments will make tankers obsolete /sarc.
RE: “Slow down your workin us out of a job”
Suggested answers:
1. Not us, just you.
2. If we all work like you we’ll all be out of jobs
Feel free to add more. That line has always been an irritant, and the more answers there are, the better.
As arrogant and bone headed as Boeing may be this procurement has been a disaster from day one.
Boeing was never going to win the selection - period.
(disclosure - former McDonnell Douglas employee)
Problem was it was just me. It was the Alaska Pipeline and even if someone agreed with me it was only whispered later.
What I learned is that the only way to make real money is to take my own ideas and work for myself.
I want to thank all the lazy people I worked with as they drove me to become a self made businessman.
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